Ahmed Heikal made a case for investing in African infrastructure in a one-on-one session at COMESA’s Africa 2017 Conference Business for Africa and the World” held under the patronage of Egyptian President Abdelfatttah El Sisi; highlights Egypt’s success in implementing bold economic reforms
“Closing the infrastructure gap on the African continent is key to harnessing the potential of factors such as rapid population growth and urbanization to fuel sustainable economic development. I believe investors are beginning to realize not only the necessity of infrastructure investments but also the potential for their high returns,” said Qalaa Holdings Chairman and Founder, Ahmed Heikal in his one-on-one session at COMESA’s Africa 2017 Conference in Sharm El-Sheikh. With over a decade of experience building businesses in Egypt and other markets in Africa, including investments in strategic sectors such as energy, cement, transporation and logistics, mining and agrifoods, Heikal highlighted opportunities for growth on the continent while also providing insights on how to overcome challenges to harness this growth.
“Egypt is already reaping the rewards of its bold economic reform program and African nations need to follow suit and push forward with supportive policymaking that will unlock the continent’s significant growth potential. Africa’s underlying growth drivers are strong, with some of the world’s largest consumer markets as well as an increasingly large working-age population. The continent is at an inflection point particularly as shifting dynamics in China, the US and Europe see them favoring investment in, and cooperation with, Africa countries,” Heikal added.
“China is currently grappling with slower growth and a widening deficit, and it’s expected that more than 83 million jobs will leave China in the next few years in search of cheaper labor costs – Africa has the potential to benefit enormously from this shift. Meanwhile, Europe is aiming to stem the flow of economic migrants, with investments and job creation in Africa as its primarly line of defence,” he further explained.
Heikal further emphasized that investments in infrastructure – from power and water supply, to transportation and information and communication technologies – are crucial to increasing Africa’s share of global trade, which is currently only 3%, and to tapping into the full value of these growth drivers. “Right now the African continent is experiencing a push to develop a lasting world-class infrastructure while at the same time suffering from a shortage in finance and high borrowing rates; private investors should jump at the opportunity to be a part of this,” he said.
Forging connections within and between African markets will maximize efficiency, reduce waste, and foster prosperity across all sectors. Heikal also highlighted the importance of closing the technology gap and bringing African markets into the digital age to facilitate the intergration into the global economy.
“At Qalaa Holdings we have successfully built 27 businesses from scratch over the past decade by identifying trends in our markets and riding them in a way that translates into growth for our companies.”
As an example of the potential impact of private-sector infrastructure projects, Heikal highlighted Qalaa Holding’s investment in the Egyptian Refining Company, a USD 3.7 billion petroleum refinery located on the outskirts of Cairo that will help to meet domestic demand for middle and light distillates and jet fuel when it is fully operation in 1Q2018. “With ERC, we partnered with development finance institutions and export credit agencies, and sovereign wealth funds to invest in a highly profitable project that will be crucial to bolstering Egypt’s energy security and independence while also fueling growth.”
Additionally, Heikal focused on transportation and logistics, saying “sub-Saharan Africa currently suffers from a dearth of transportation infrastructure, including limited road networks, dilapidated railroads, and unreliable river transport. In large part, this is why the region faces the highest transportation costs in the world. For intracontinental trade to truly take off in the region, building an interconnected transportation network on the continent is crucial.”
He went on to explain that “Qalaa subsidiary Nile Logistics is currently working to develop a network of ports and logistics hubs connecting Alexandria to Aswan. In recent years, this has increased efficiency and produced higher returns on our operations within Egypt. I would like to see a similar network developed on a larger scale across the continent.”
Nubareya is Nile Logistics’ fully-owned 70,000m2 river port located south of Alexandria Port. It is connected to the berthing areas of the port via Nubareya Canal and a lock between the canal and Port. The location is strategic because it is directly located on Mehwar Eltameer – a key highway that goes from the Libyan border all the way to the Suez Canal. As part of a diversification strategy, the company acquired a license to operate Nubareya as a bonded area dedicated to containers and grains. The next step as part of this diversification strategy is to build a 1000,000-ton grain storage facility. Currently however, Nubareya is used mainly for logistics services such as stevedoring storing cargo for clients.
2017 marks Qalaa Holdings second year as a prominent participant in COMESA’s annual Africa Conference. This year, the three-day conference brought together heads of state as well as cabinet members and top business leaders from Egypt and the continent. Participants discussed the abundant opportunities for investing in African countries and the increasing need for public-private partnerships to overcome challenges in closing the continent’s infrastructure gap and achieving sustainable economic growth.
Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in energy and infrastructure. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Agrifoods, Transportation & Logistics, and Mining. To learn more, please visit qalaaholdings.com.
For more information, please contact:
Ms. Ghada Hammouda
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Citadel Capital (S.A.E.)
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