Despite the optimism and prospects, companies wanting to do business in East Africa would do well to “wake up and smell the coffee”.
The idiom according to Farlex Partner Idioms Dictionary means “become aware of the realities of a situation, however unpleasant”.
Challenges in the “birthplace of coffee” identified by respondents to an FTW survey range from insufficient connectivity between South African and East African ports and infrastructural constraints to bureaucracy and corruption.
More than half of the respondents believe that South African companies are being outmanoeuvred in the region. This leads to a chicken-and-egg situation where there is insufficient demand for South African exports to support the establishment of more efficient logistics networks serving two-way trade with the region, and as a result South African exports are less competitive – and vice-versa for East African exporters.
The window of opportunity for South African companies may be narrowing. Captain Faisal Sultan of Transnet National Ports Authority in Port Elizabeth warns that the deepening of seaports along the East African coastline will open up the countries to direct shipments, with a decrease in transhipments from South Africa to the region.
To read the full article from our special East Africa feature, and other stories from FTW, click here.
