Five African boom towns offering untapped opportunities
Across sub-Saharan Africa there are towns and cities experiencing fast growth on the back of new mining and oil projects or other business activities. Because of their swelling economies and an influx of people, these so-called boom towns often present untapped opportunities – from hotels to private hospitals – that savvy businesspeople can exploit. How we made it in Africa asked a number of logistics company DHL’s sub-Saharan Africa managers to identify a fast growing urban area in their respective countries, and to highlight the opportunities available.
1. Nacala, Mozambique
Mozambique’s western Tete Province is said to have some of the world’s richest coal deposits, and in recent years the area has lured mining companies such as Rio Tinto and Brazil’s Vale. There is one problem, though: getting the coal out of the country. Export capability is currently being strangled by poor infrastructure linking the mine pits to ports. However, the public and private sectors are working together to improve Mozambique’s rail and port infrastructure.
One of the beneficiaries of these infrastructure developments is the town of Nacala, one of the deepest natural sea ports in Africa. Mining company Vale is part of a project to develop a 912km rail line leading from its Tete mine, through a part of Malawi, to Nacala. The project includes the expansion of Nacala’s port facilities. In addition to coal, the railway is expected to carry other goods destined for Zambia and Malawi. Nacala’s new international airport is also set to open by the middle of this year.
According to Dominique Lalous, DHL country manager in Mozambique, Nacala holds potential for shopping malls, hotels, housing, business support services, and warehousing for logistics purposes.
2. Mbarara, Uganda
In western Uganda, in the middle of the country’s cattle corridor, lies the town of Mbarara. According to Asteway Desta, DHL country manager for Uganda, this agricultural centre is one of the country’s fastest growing towns.
“All milk and dairy products are collected in Mbarara before being transported to the main market in the capital Kampala,” says Desta. The town is also on the main route to other agricultural towns such as Kabale and Ibanda.
Desta says there are untapped opportunities in Mbarara for healthcare facilities, food processing, hotels and air transport.
3. Ouagadougou, Burkina Faso
The landlocked West African country of Burkina Faso has seen robust economic expansion in recent years, driven by sectors such as agriculture, mining and telecommunications. According Nawa Yeo, who looks after DHL’s business in the country, the capital Ouagadougou is by far the fastest growing urban area. “Over the past years the capital has certainly changed in terms of the quantity and diversity of economic activities,” says Yeo.
Ouagadougou does not have enough top-end hotels and restaurants to meet the demand from foreign businesspeople. “If you want a hotel room in Ouagadougou you need to book well in advance. We need many more facilities catering for businesspeople,” says Yeo.
“As a booming city, Ouagadougou is facing a huge demand for energy. The public power company is unable to cater for demand. The same goes for clean water and low cost, affordable houses,” notes Yeo.
4. Pointe-Noire, Republic of Congo
Although it is already the commercial hub of the Republic of Congo, the port city of Pointe-Noire is set for additional growth due to new oil and mining projects. According to local DHL manager Paul Moudiki, the Congo is in for an economic boom in about two years’ time when new mining and oil projects come on stream.
The Moho Nord offshore crude oil project, situated approximately 75km off the Congo coast, is expected to begin commercial production in 2015 and has the potential to produce 140,000 barrels of oil per day. It is the first deepwater project in Congo and majority-owned by Total.
The Central African country is rich in base metal, gold, iron and phosphate deposits. Moudiki says it is especially Chinese mining companies that are active in the Congo. Other mining firms interested in the Congo’s iron ore deposits include Glencore Xstrata and Exxaro Resources. According to Moudiki, exploration works on a number of mining projects have been completed, and companies are now preparing for production.
Pointe-Noire has potential for additional hotels, housing and business support services.
5. Solwezi, Zambia
The town of Solwezi is situated in Zambia’s Northwestern Province, close to the Democratic Republic of Congo border. Much of the growth in Solwezi is fuelled by mining. First Quantum Minerals owns the largest copper mine in Africa, situated just 10km north of Solwezi, and the company is also developing additional copper and nickel projects about 150km west of the town.
“Solwezi has seen increased economic activity in recent times,” says Nomsa Mumba, country manager for DHL in Zambia. “There has been a phenomenal growth in the population and ultimately huge growth in the various economic activities. The population is growing every day. You can see from the fact that you can barely get accommodation for the numerous companies setting up in Solwezi.”