HRG points to huge growth potential in booming Africa

Greater political stability and a well-established wealth of natural resources are fuelling an unprecedented rise in business travel across Africa according to Hogg Robinson Group (HRG), the award-winning international corporate services company.  South Africa’s status as the dominant business travel market in the region is also facing an increasing challenge from a number of rapidly emerging economies, in particular Nigeria, Ghana, and Kenya.

According to the most recent economic indicators, Africa accounts for seven of the world’s fastest growing economies.  Ghana’s economy alone grew by more than 14% in 2011 and is tipped for strong growth in 2012.  While Africa’s natural resources remain a significant draw for multinational organisations, a more general relaxation of government restrictions on foreign investment has led to greater development in a number of sectors including infrastructure, telecommunications and agriculture, to name but a few.

Growth in inward investment and an influx of foreign business have been catalysts for rapid infrastructural development taking place across the entire African region.  Nevertheless, HRG warns business travel to certain areas may remain expensive as demand outpaces the supply of suitable accommodation.  Large parts of West Africa still have some way to go to address infrastructure and security concerns which are a prime factor in keeping prices high.  HRG’s most recent Hotel Survey found hotel rates in the Nigerian capital Lagos are the second most expensive in the world for business travellers.

Airlines are responding to the growth in business travel to emerging economies across Africa by opening up new routes and increasing the frequency of flights serving high-growth areas.  South African Airways is placing renewed focus on the regional market and has just cancelled the Cape Town/London route to make more aircraft available on other Africa routings, specifically to Accra, Lagos, Abidjan and Brazzaville.  The number of low-cost carriers operating in the region is also increasing, albeit from a relatively low base.

Chris Schuitmaker, HRG’s  Manager for Regional Business & Partner Management, Africa, said: “After decades of sluggish progress, Africa is emerging as a focal point for international investment – growth in some countries is even outpacing the BRIC nations.  The rate of change across the region is phenomenal, and it’s incredible to think that Nigeria is predicted to overtake South Africa as the leading African economy within the next five to ten years.  

“As business travel to Africa increases, no-one would deny the region still has some issues to contend with, in particular the lack of infrastructure and concerns over security, which can make it difficult and expensive to do business in Africa.  These issues won’t be solved overnight, but things are definitely changing.  Roads are being built, airports upgraded, hotels are springing up everywhere and internet and telecommunication connectivity is improving everyday.  All the signs are that Africa is beginning to realise its huge and undoubted potential as a major business destination.”

Source = HRG
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