The African Trade Evolution -- How Will the Development of Corridors Impact Your Business?

CAPE TOWN, South Africa, Sept. 23, 2013 /PRNewswire/ -- Infrastructure development has been widely recognised as a catalyst for driving economic growth in Africa. After several decades of subdued investment, infrastructure development is becoming a national priority for African governments. Aside from a major drive to improve energy and power infrastructure, the development of transportation infrastructure (roads, rail, ports and airports) remains the key focus area for infrastructure investment. Improving Africa's transportation infrastructure is a fundamental requirement for improving market accessibility and driving increases in both regional and intra-regional trade levels.

Understanding transport and logistics has been highlighted as a key challenge to efficient business operations in Africa. A critical analysis of the current status and projected evolution of Africa's major trade corridors over the next three decades was presented at Frost & Sullivan's annual GIL 2013: Africa – The Growth, Innovation and Leadership Congress.

"Trade volume projections conducted in Sub-Saharan Africa reveal the significant impact that trade corridor completion can have on regional trade," observes Infrastructure Programme Manager Kudzanayi Bangure. "Total trade volumes in Sub-Saharan Africa are expected to rise three-fold to more than 1,200 million tons by 2030; trade volumes in East and West Africa are projected to grow at an annual compound growth rate of approximately 7% over the next two decades."

Having a clear understanding of transport corridor development in Sub-Saharan Africa will be important for businesses attempting to access new high-growth markets. Frost & Sullivan projections indicate that, by 2025, Africa will have more than 350 million middle-class consumers, a significant proportion of which will be urban dwellers. For companies attempting to expand into growing urban markets, it is critical to understand potential distribution challenges in order to assess the accessibility of such markets.

"East and West Africa are continental growth drivers and the targets for geographic expansion for large South African and international companies seeking new markets. Both regions present a range of attractive prospects, which include: large, growing populations and significant established resources in West Africa, as well as newly discovered resource reserves in East Africa," says Frost & Sullivan infrastructure industry analyst, James Milne. "The presence of resources has historically been observed as a key functional driver for transport infrastructure development. Therefore, understanding the factors influencing such infrastructure development both on a regional basis and at a country level is crucial to determining which regional market will be most suitable to target for geographic expansion."

Frost & Sullivan believes that having a strong understanding of infrastructure development at a country and regional level is crucial when developing geographic expansion strategies in order to minimise future risks and inefficiencies.

For more information on joining GIL 2014: Africa, or to enquire about speaker, sponsorship and media partnership opportunities, please e-mail Samantha James at [email protected].

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Corporate Communications Africa
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SOURCE Frost & Sullivan