The heat is on

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Greg2011_full_opt2.0South Africa has shared in the catastrophic weather ravaging large areas of the globe at this moment in time (bridges washed away in KZN; bull sharks swimming in the shopping precinct of Ipswich, near Brisbane) but the private sector is being subjected to a different type of climate change: unprecedented competition.

On the one hand, the influx of foreign business interests in Africa is enough to raise a sweat. Not only China but also India and Brazil are muscling their way onto the map, buying up swathes of territory and building infrastructure in ways that frequently show scant concern for the well-being of local people, but are creating networks of patronage and influence that will profoundly affect African economic relations in years to come.

The sweaty part is the question: how to compete against these giants? How to get in on that action?

South African businesses are acutely aware that complacency kills (one can be complacent even in the teeth of a recession), but relatively few are breaking new ground on the continent.

While the pioneering likes of Checkers and Gibb are going ahead with a pan-African supply chain and infrastructure megaprojects such as Port Harcourt respectively, many others are still at the soul-searching, head-scratching phase.

Yet, Africa is opening up as never before. The sheer energy and attitude of the Walvis Bay Corridor Group, for example, is transforming Namibia into a logistics hub that threatens to eclipse the likes of Durban in terms of time- and cost-efficiency.

Meanwhile, Kenya, according to the World Bank, is close to reaching a ‘tipping point’ that will transform it into the economic hub of East Africa.

And – stop press! – news of the operational revival of the Angolan railways has arrived in my inbox as I type. Angola, soon to be integrated with Namibia and the Democratic Republic of Congo by rail – can you get your head around that?

South Africa has been the biggest economy of Africa for so long that established market players may operate under the assumption that it will remain so forever. The first step to shaking this dangerous mindset is to accept market integration as a reality; the second is finding better ways to get the goods to market.

Greg Penfold

 


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