GIBS PANEL EXPLORES ROLE OF INTERMEDIATE CITIES IN SA’S DEVELOPMENT PART 3

Caption: Francois Fouche, economist and researcher.

Written by Eamonn Ryan

Leading figures in economics and urban planning convened at the Gordon Institute of Business Science (GIBS) seminar titled ‘Second to None: Second Cities and Next Cities as Engines of Africa’s Prosperity’. This is Part 3 of a four-part series.

The pivotal role of intermediate cities in South Africa’s urban landscape as it affects contractors in the HVAC&R space took center stage at the seminar, where panelists discussed the challenges and opportunities inherent in these cities’ development trajectories.

The panel consisted of: Prof Adrian Seville, GIBS; Siphelele Ngobese, senior researcher: South African Cities Network; Hennie Heymans, CEO DHL Express Sub-Saharan Africa; and Francois Fouche, economist and researcher.

At the seminar, optimism and strategic foresight were palpable as DHL executive Heymans discussed the company’s steadfast commitment to operating in Africa, despite the continent’s operational challenges.

He highlighted the pivotal role logistics plays in driving economic activity and connectivity across Africa.

“Logistics is the backbone of economies. Without efficient logistics, economies cannot function. Despite only 12% of African cities being connected, we see this as a vast opportunity rather than a deterrent.”

The discussion underscored DHL’s long-term investment strategy in Africa, driven not only by business opportunity but also by a strategic imperative to connect people and businesses in diverse markets.

“We operate on a network model, and to truly be the logistics leader globally, we must have a robust presence in Africa. Our commitment isn’t driven solely by business interests but also by our belief in Africa’s potential.”

Echoing sentiments from earlier discussions, he highlights shifts in Africa’s economic landscape, particularly in sectors like energy and agriculture, which are gradually moving away from extractive practices towards sustainable development.

“Africa is changing, and so are its economic dynamics. We see immense potential, akin to the telecommunications revolution where access to mobile phones transformed economies. Logistics can play a similar transformative role.”

Emphasising the importance of patience and understanding local contexts, Fouche cautioned against hasty investment decisions driven solely by demographic numbers. “Understanding Africa’s diversity and cultural nuances is crucial for sustainable growth. Rather than seeking quick wins in populous cities, we prioritise sustainable, long-term partnerships that align with local needs and contexts.”

The seminar provided a platform for insightful discussions on the strategic importance of logistics in Africa’s development journey, reinforcing DHL Express’s commitment to navigating challenges and seizing opportunities across the continent.

Heymans highlighted Kenya as a prime example of breaking the extractive economic pattern through strategic government support in the agricultural sector.

“Kenya’s approach to developing its coffee industry is remarkable. By focusing on adding value locally—roasting and packaging—Kenya has significantly increased the returns from its coffee exports. This strategy has not only boosted local employment but also enhanced the economic benefits retained within the country.”

“There’s a critical need to rethink conventional pathways to development,” says Seville. “With the majority of the global workforce projected to be young Africans by mid-century, there’s a unique opportunity for Africa to leapfrog into the services industry.”

Drawing parallels with technological advancements that once seemed far-fetched, he posed the question of whether Africa could use its growing connectivity and digital infrastructure to facilitate remote service delivery.

“Think back to predictions made decades ago about global communication and telemedicine. Those ideas seemed improbable then, yet today they are a reality. Similarly, could Africa leapfrog by utilising its infrastructure to support a booming services sector?” an audience member asked.

The discussion underscored the importance of investing in digital infrastructure as a catalyst for economic transformation. It also emphasised the potential of remote work and digital services to capitalise on Africa’s youthful population without relying solely on traditional industrialisation paths.

Seville notes that remote robotics should not be underplayed for its potential for youthful Africans to find work without having to outright emigate to the developing world.

“We’re at a pivotal moment where infrastructure investment can shape Africa’s economic future,” Heymans concludes optimistically. “By harnessing our demographic dividend and investing wisely in digital connectivity, Africa has the potential to not just catch up but to lead in the global services economy.”