OBG talks to Amadou Diallo, CEO of DHL Freight, Deutsche Post DHL

Interview: Amadou Diallo

What are the challenges faced by local logistics players like postal services?

AMADOU DIALLO: Many countries like Germany and Singapore have privatised their postal organisations. Governments are not businesses, and therefore services to customers – like postal services – need to be privatised. Only then can rapid capital growth be expected.

In Africa many postal services work on a non-profit basis, resulting in poor investments in their infrastructure, but that can only change if we start to partially privatise those entities. Private postal services would bring concrete solutions to the table and would help overcome issues like delivery times. External knowledge injected into local systems would help increase the level of services provided to customers, and today it is crucial to bring innovation to the current postal services. Frankly, many local postal services in Africa are not up to international standards yet.

How significant are intra-African trade flows, compared to trades in the EU and Asia?

DIALLO: The level of intra-European trades is above 50%, while the level of intra-Asian trades is almost at 60%, but still there are limited intra-African trades. However, both West and East African countries are relatively active in trading among their respective region. There is an intensive circulation of goods between Burkina Faso, Ghana, Côte d’Ivoire and Nigeria. At the continent level, intra-trades can only increase if each country opens its market. Discussions are under way to have free trade agreements between East Africa and Central Africa, yet it remains difficult to move and transport goods across those countries.

Ultimately, empowering intra-African trades would also help generate jobs, and as a result, increase consumption of African products by Africans. Concretely, investors are interested in large markets rather than limited ones, and in that sense, some parts of Africa need to work on widening their scope for trades. However, the statistics for measuring those trades are poor. Africa needs to establish strong statistics bureaus so that trades can be more effectively measured. Managing performances is fundamental for triggering and promoting long-term growth, and this can be done through the measurement of trade within market economies using key performance indicators.

What can be done to further ease soft infrastructure in Africa?

DIALLO: Regulations in Africa have never really been complicated, but the interpretation of the legal framework can be complex. Many countries, such as Ethiopia, are currently working towards more ethical governance, easing processes and fighting corruption. There is more and more alignment towards the establishment of sustainable legal frameworks that would facilitate doing business in those markets, and eventually, contribute to the stimulation of growth.

However, Central African countries like Gabon are facing challenges at the Customs level.

De Minimis rules have not yet been implemented – unlike in Nigeria – thus procedures have been affected, involving unnecessary costs. The private sector can help governments by showing them how effective Customs systems work, like in Hong Kong and Dubai.

How would you evaluate private participation in transport infrastructure development?

DIALLO: Nowadays, many African governments are inviting private investors in order to secure the development of transport infrastructure. However, they need to organise themselves accordingly and make terms easier for prospective investors. Governments need to have a strategy that is specific to the sectors they want to focus on. If they look to disperse rather than focus, investors will be afraid. At the moment, there is a lack of local sub-contractors that possess transportation tools. The private sector can train those sub-contractors, but ultimately, they should be empowered and given the opportunity to buy transportation materials.