Africa's Road to Industry: An Interview with Geoffrey White
It has long been understood that if Africa is going to meet the United Nations' Sustainable Development Goals for 2030, there is no more efficient path to fulfilling this than industrialisation. The impact of industrialisation will, of course, vary by nation, but its potential for sustainable job creation, innovation in technology, and skills development means Africa's industrialisation process holds huge promise for the eradication of poverty. Given the millions of young people joining Africa's labour force each year, industry holds the key to the Continent's inclusive development.
Indeed, Africa is already showing signs that it may be the economic powerhouse of the future – if it manages to take these crucial steps toward sustainable industrialisation. Ground has already been made in the form of last month's African Continental Free Trade Agreement, an unprecedented move to improve intra-African trade and facilitate the relationships for structural transformation. UNECA's research has suggested that the success of the agreement could increase intra-Africa trade by 52%, fuelling the Continent's manufacturing exports and allowing the sector to develop.
Yet beyond these agreements, there is still much work to do on the ground. Business continues to struggle with poor infrastructure: unreliable power supply, transport links, water and sanitation. The effect of limited road connections is estimated to add 40% to transport costs in Africa's costal nations – and 60% to landlocked ones. With the rate of population growth and urbanisation outpacing other nations worldwide, the necessity for infrastructure to support African development is vital.
One such company working to meet this need is Agility Africa. Led by CEO Geoffrey White, Agility have brought international standard logistics to Africa's emerging markets, supporting business by providing the crucial infrastructure. With a focus on developing distribution parks across the Continent, Agility's parks are facilitating sustainable business, creating a reliable platform for others to operate on within the African market. In doing so, Agility are providing a springboard for the growth of African business, and a route to exporting Africa's goods internationally.
We spoke to Geoffrey White to find out more about the impact of Agility Africa's projects, his thoughts on the role of industrialisation on the Continent – and, of course, who he's most excited to hear from at The Annual Debate.
You're speaking on our panel, Driving Africa's Industrialisation: Now or Never. In your opinion, what role does industrialisation play in Africa's economic development?
Industrialisation is fundamental for economic growth, jobs and prosperity. Without the benefits of industrialisation Africa will continue to struggle to compete in global export markets. Goods and services in Africa remain amongst the most expensive in the world as the majority need to be imported. This supports manufacturing based economies outside of Africa, not those in Africa.
The African Continental Free Trade Area Agreement was established last month– do you believe this will have an effect on Africa's industrialisation?
Low inter-regional trade in Africa, which is only 12% currently compared to 50%+ in developed markets, is a major constraint to economic development on the Continent. The new free trade area agreement will create an single open market of 1.7 billion people with an estimated US$ 6.7 billion of consumer spending. The challenge is getting all countries aligned on the agreement and the implementation and ensuring the easy movement of goods cross border. Africa as a whole will benefit significantly as it will be more attractive for investment and the dependency on imports will be able to be reduced.
You spoke in 2015 on Agility's five-year plan to invest $4bn into African distribution parks – what impact has this project had?
International standard warehousing is one of the central foundations of economic development. Our funding and development of warehouse parks permit multinationals to enter Africa on a capital light model, making their investment decisions less risky, simpler and much faster. Our unique SME warehouse programme provides the essential warehousing that small businesses need to expand and grow without having to raise expensive funding for non core infrastructure. We now have warehouse park projects open or under construction in Ghana, Cote D’Ivoire, Mozambique, and Nigeria with additional locations to follow in 2019 in Kenya, Tanzania, Uganda and Angola. We also have built to suit sites available for customers in Djibouti, Senegal, Mauritius and Cameroon.
Are there any specific Sub-Saharan African markets you're particularly interested in developing?
The Agility Africa strategy is to fund and develop warehouse capacity to support the growth in all the major cities in Africa. The initial focus is on delivering our initial top ten locations : Cote d’Ivoire, Ghana, Nigeria, Angola, DRC, Mozambique, Tanzania, Kenya, Uganda, Ethiopia. Thereafter we see additional projects being developed across the Continent to establish a pan African warehouse network that delivers one part of the essential infrastructure that is instrumental to the development of regional trade.
What would be your key piece of advice for global investors looking to invest in African industry?
I think the macro economic opportunity is very attractive but it is important to understand your market and align your product offering with the real growth in demand. The main challenges are around project execution and hiring, developing and nurturing quality human resources. Africa is for those willing to make long term, sustainable investments and those that keep their business focused and simple, addressing the needs of the Continent, will see significant upside over time.
Which of our speakers at The Annual Debate 2018 are you looking forward to hearing from?
Arnold Ekpe. His practical experience across Africa always gives him a unique insight into African macro economics.
Hear more from Geoffrey White, join us at The Annual Debate 2018, where he will be speaking on our panel, Driving Africa's Industrialisation: Now or Never.