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New trade routes key to African growth

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Africa continues to remain vastly unexplored, and making Africa’s most remote regions accessible for trade will not only promote prosperity in those regions, but also elevate the continent’s continued growth path.

This is according to Charles Brewer, MD of DHL Express sub-Saharan Africa, commenting on The Role of Trade in Ending Poverty report recently released by the World Bank Group and World Trade Organisation.

Explaining the role that international trade plays in development and poverty reduction in Africa, the report states that the value of trade is measured by the extent to which it delivers better livelihoods, measured through higher incomes, greater variety of choice and a more sustainable future, among others.

“While countries need to continue to establish better trade relations with international partners, enabling trade routes within the continent can yield numerous benefits for the region and its people,” adds Brewer.

Having entered the African market in 1978, when the continent was still relatively ‘unknown’, Brewer says that DHL has explored the remotest of regions in Africa and witnessed these areas transform; both economically and socially, simply due to access to new services. He points to Cape Verde, situated off the northwest coast of Africa, as a good example of this. “Cape Verde is a small country consisting of 10 islands, and as a result, the quickest and most reliable way of transporting goods to and from the country is by air.

“Currently, there are three commercial airlines operating in the area and given that commercial airlines offer priority to passenger baggage, offloading of cargo from these planes was a regular occurrence. In order to better service the area, we introduced a DHL flight which operates between Senegal and Cape Verde weekly. This dedicated flight route provides various trade opportunities and greatly improves connectivity in the region.”

To effectively reduce poverty, growth needs to be inclusive, and poor people aren’t often located where growth takes place. The World Bank and The World Trade Organisation estimate that one billion (15%) of the world’s population remain in extreme poverty, and that of this number, 415-million are concentrated in sub-Saharan Africa. The report states that extreme poverty in many countries is predominately a rural phenomenon, and that an estimated 75% of the extreme poor in Africa live in rural areas.

Dr Jim Yong Kim, World Bank group president, says that beyond expanding trade, more must be done, such as building roads that connect farmers to markets: “We must always connect the poorest to trade opportunities.”

Brewer says that connecting rural areas to trade opportunities is a key focus for DHL Express in sub-Saharan Africa. “We have made great progress in making the global market and the world at large more accessible and connected by increasing the number of points where customers can access DHL and our global network. We now have over 4 500 retail outlets across Sub-Saharan Africa offering DHL services. This allows anyone – from a student to a small business –access over 220 countries and destinations that we serve.”

The report paints trade as a key enabler of facilitating growth in developing countries and highlights that lower trade costs and fewer barriers between countries is vital to eliminating extreme poverty.

“There needs to be a collaborative effort between the public and private sector to work together to ease doing business across borders,” says Brewer. “We work very closely with the government and custom authorities in each country on solutions to make doing business easier. There is ongoing progress with a number of successful trade blocs in place focusing on better connecting the region, and we look forward to seeing Africa continue on its growth path in years to come.”