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Published On: Fri, Feb 21st, 2014

Africa offers great opportunities for SMEs growth – DHL boss

Charles-Brewer-DHLBy Etuka Sunday

The Managing Director of DHL Express SSA, Charles Brewer has said that small and medium enterprises (SMEs) are clearly the growth engine for Africa and the critical driver for sustainable economic growth.

Brewer said, “Africa’s middle class has tripled over the last 30 years, and the current trajectory suggests that the African middle class will grow to 1.1 billion in 2060. As African economies are some of the fastest growing in the world, the outlook for the continent is very positive going forward.”

“Manufacturing, on a large scale, is still somewhat embryonic in Africa and as such, there is a definite opportunity for SMEs to fill the gaps which are not being serviced by these large global companies. As important, a growing SME base will create hundreds and thousands of new jobs, which is an absolute must for this ever growing continent.”

He said other than the usual challenges which SMEs are likely to face in Africa, such as infrastructure challenges, customs regulations and controls, access to finance may be an obstacle going forward. “The Institute of International Finance reported that due to many countries in Sub-Saharan Africa struggling with controlling price pressures, central banks have tended to keep monetary policy fairly tight. Despite this challenge, we expect SMEs to create growth opportunities through increased consumer spending power and expansion into untapped markets.

“The growing internet user penetration in Africa also provides a sizeable opportunity for SMEs, and as Africa continues to adopt e-commerce as a way of life, businesses are able to leverage this online market, while reducing traditional customer acquisition costs. World Wide Worx’s 2012 Internet Matters report reveals that the local e-commerce market is growing at a rate of around 30% a year and shows no signs of slowing down.

According to the International Monetary Fund (IMF), economic growth in Sub-Saharan Africa in 2014 is expected to be slightly higher than of that in 2013, at around 6%.

This growth, coupled with the more than one billion consumers on the continent who spend $600 billion annually, as well as having the fastest growing middle class in the world, and the significant opportunity that connecting with the world represents, provides African small and medium enterprises (SMEs) with boundless opportunities in 2014.

 

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