“Aggressive growth pattern” – Interview with Samad Osman on Africa

In this Interview, Managing Director Area Africa Samad Osman talks about Hapag-Lloyd’s strategy in Africa, potentials and challenges of the African market and the significance of the newly created African Continental Free Trade Area for the continent and our business

Last week, 44 out of 55 African countries signed a free trade pact to establish one of the largest free trade zones in the world, the African Continental Free Trade Area (CFTA). What are your hopes from this free trade pact? And where do you see challenges?

I think the agreement under the auspices of the Africa Union, signed symbolically in a land-locked country like Rwanda, is a great achievement in itself. This is potentially very important for Africa after the Southern African Development Community (SADC) agreement from 2001, which only has 15 participating countries so far. Globalization and free trade will be the future, and it is good that most of the African leadership has now signed up concretely for this. The main concern is that the two largest economies in Africa – South Africa and Nigeria – have not signed the full agreement asking for more time for internal country consultation, which is a bit of the flip side of the coin. Furthermore, the actual implementation of agreements does tend to take time on this continent. Let’s just hope it is different with this important agreement.

What growth potential do you see in connection with this free trade pact?

First of all, this should stimulate industrialization and regional blocks coming together to make it happen. This is an issue today, as the projects for massive transformation are still very country-based. Intra-African business and volumes (which are already growing faster as trade lanes) would grow immensely once this is implemented.

As per EI, Africa houses nine out of the 20 fastest-growing GDP countries worldwide, and volume throughput for sub-Saharan Africa is expected to grow.

Samad Osman

How is the African market doing for Hapag-Lloyd? What are our key opportunities and tasks? And what might change thanks to the free trade pact?

We have opened new offices in Ghana now, and are starting new services in East Africa. We have the ambition of maintaining this aggressive growth pattern, while we are now recognized as a force to be reckoned within certain markets (mainly in West Africa), we are underrepresented in others. We are working hard to change all of this.

We just launched the East Africa Service, which connects East Africa to our global network for the first time. How is the service doing so far? Do you see any new services on the horizon or anything else that might come as a reaction to the free trade pact?

Well, the first vessel should leave Jeddah on April 2. The welcome in these markets has just been great, and the booking development – which, as you can guess, we are monitoring daily – has just been very promising so far.

What is interesting from a customer perspective is that, on top of opening two port countries, for the first time, we are also opening around 11 inland corridors to serve core customers who need the door to door transport services. Our service offering from Day 1 will not be inferior to that of our competitors, who have been plying this market for ages. As such, customers do see us as a alternative value proposal And then there is the Jeddah hub, which is another first for this market, as well.