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Increased FDI prompts DHL’s investment in Africa

DHL considers sub-Saharan Africa a prominent region for growth. (Image source: DHL)

DHL has planned investments to the tune of millions of dollars in various parts of Africa to tap the opportunities arising with increased FDI and macroeconomic growth in the continent

According to the recently released EY 2015 Africa Attractiveness Survey, capital investment into Africa in 2014 has increased by 136 per cent when compared to 2013. With a total investment of US$128bn for the year, the average investment per project was US$174.5mn.

Charles Brewer, managing director of DHL Express for sub-Saharan Africa, said that this is positive for the continent’s outlook, highlighting that FDI in the region is being stimulated by a number of megadeals instead of numerous smaller deals. Talking about the trend in 2014, he says that “traditional investors refocused their attention on the continent, attracted by its strong macroeconomic growth and outlook, improving business environment, a rising consumer class, abundant natural resources and infrastructure development”.

Brewer also pointed out that underdeveloped infrastructure in the continent drives up logistics costs, and according to DHL’s estimates, supply chain costs are up to nine times more expensive in Africa in comparison to other regions of the world. This is the reason he cited for the company’s planned investment in sub-Saharan Africa. He said that the company has continued “to expand our capabilities and cater for continued growth across all markets, with planned investment of millions of dollars across sub-Saharan Africa in 2015”. Major projects underway include upgrades to facilities and shipment handling systems in South Africa, Kenya, Uganda, DR Congo, Rwanda, Angola, Zimbabwe and Botswana. Later this year, DHL Express will begin planned upgrades in Ghana, Nigeria, Ethiopia, Benin, Cameroon, Guinea Republic, Gabon, Tanzania, Mauritius and Cote D’Ivoire.

Other than upgrading its facilities, DHL Express will also upgrade its vehicles and technology across markets, and continue its employee and SME development programmes.

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