Africa ‘can use the world’s challenges to its benefit’

If the businessmen and the politicians attending the World Economic Forum (WEF) on Africa can be believed, Africa is well on the road to prosperity and it could use global challenges successfully for its own benefit.

President Jacob Zuma kick-started a debate about Africa’s role “in the new reality”, as the WEF programme dubbed it. It said developing countries now represented half of the global growth and six of the 10 most rapidly expanding economies were located in sub-Saharan Africa.

It asked participants how the continent would define its role in a shifting global economy and guard against emerging risks.

Zuma pointed out that at the previous forum in Cape Town a year ago, the discussion had focused on the world economic crisis. Now it was clear that the developing economies “were in fact the ones that stopped the deepening of the crisis”, one that was created in the Old World.

That was a change from the past when the Old World resolved its own problems. Now with China knocking at the continent’s door it was important that trade benefited both economic blocs and that African goods were beneficiated before being sold to China.

Nestlé chairman Peter Brabeck-Letmathe from Switzerland noted that the political and economic debates of the future would revolve around the matter of the growing demand for food.

This reality would be driven by the increase in the global population and the shrinking available agricultural land. After 30 years of food price stability, “food security is going to be at the forefront of strategic and political thinking”.

Jubril Adewale Tinubu, the group chief executive of Nigerian oil and gas company Oando, said this provided all sorts of opportunities. He believed the First World would be looking to Africa to provide food supplies as well as the natural resources it would require.

Mpho Makwana, Eskom’s chairman, said that subject to the appropriate leadership, Africa needed to leverage opportunities – including raising electricity provision from about 30 percent access in Africa – by investment in infrastructure.

The local power parastatal’s market could increase from an estimated $1 trillion (R6.7 trillion) to $2.4 trillion by 2025, Makwana said.

That leaves a lot of business to be done in 15 years.

1Time

In view of the fact that low-cost airline 1Time fought hard for the right to fly to Lanseria Airport in Johannesburg’s northern suburbs, where its low-cost rival kulula.com has built a successful operation, it was surprising to learn this week that SAA’s low-cost carrier, Mango, will move in ahead of it.

Mango plans to fly there from Cape Town three times a day from June 1 and is already taking bookings, introducing tough competition on the busiest domestic airline route.

But although kulula has benefited from lower costs at Lanseria and its easier accessibility before the Gautrain was launched, some of this advantage has been lost by the availability of the high-speed rail link to OR Tambo International Airport. Several business travellers who fly frequently from Johannesburg to Cape Town have told Business Report in recent months that they found it easier to catch the train to Sandton and not bother about parking.

And many passengers from Cape Town have to go to OR Tambo to catch connecting overseas flights, particularly as some international airlines fly only to Johannesburg in the winter months, or reduce their Cape Town services.

Rodney James, the managing director of 1Time, explained yesterday that he had decided it would be better to wait a few months before moving into Lanseria, until more lounges and more parking had been provided, as well as another runway.

He said that when 1Time did start operations there its first route would be to Cape Town, but far from reducing the number of flights to OR Tambo it would increase them.

Edited by Peter DeIonno. With contributions by Donwald Pressly and Audrey D’Angelo.