HomeIndustry SectorsFinance and PolicyInfrastructure shortfalls must be tackled to continue Africa's energy sector growth

Infrastructure shortfalls must be tackled to continue Africa’s energy sector growth

Hennie Heymans,
Managing Director,
DHL Express
26 March 2013 – The growth of the energy and mining sectors in Africa provides much opportunity for growth and expansion on the continent. However, according to Hennie Heymans, managing director of DHL Express South Africa, the lack of infrastructure proves to be a challenge for these industries.

He explains that as a result of the limited infrastructure, all materials − from raw building materials to high-end engineering-type equipment − need to be imported in certain regions, which results in inflated prices.

He says that Africa’s contribution to the world’s energy needs, specifically oil and gas, will continue to increase given all the new energy finds on the continent. It is therefore an area of massive growth and opportunity. “The last 18 months has seen major energy finds in Mozambique, Liberia, Sierra Leone, Kenya, Tanzania, Uganda and Sudan, to name just a few. We are also seeing increased mining activity in Madagascar, Zambia and in Ghana in particular, where there has also been a recent flurry of activity.”

Heymans says that conventional forecasts see the African oil supply growth continuing over the next 25 years, with forecasted ranges of growth over the period of between 0.5 million and 2.0 million barrels per day. “Africa will need to adapt to keep up with the demand as well as the evolving trends, especially when it comes to logistics and transportation of goods on the continent.”

He explains that the closest airport or seaport are often days away in transit terms, which all adds to the cost of such investments. “Tete in Mozambique is a typical example of where a mining company had to invest heavily in getting a railway system in place to transport its coal to the closest harbour, all adding to the cost of the mineral delivered.”