The transporter’s guide to Africa

JACO DE KLERK brings you a slap in the European emission standards’ face and some disturbing news for South Africa and the southern African region… But don’t panic! Welcome to Africa.

Environmental issues have been climbing the ranks of hot topics in the last few years, with Europe’s emission standards promising to be the transport industry’s saving grace … But according to Mark Beukes, general manager of sales and aftermarket at Powerstar, people are overplaying the need for the higher Euro standards in Africa.

“To progress from Euro 4 to Euro 5 will add an average of R100 000 per vehicle onto the capital cost; for all the bolt-on electronics to manage the drive technology,” explains Beukes. He adds that these components put a massive stress on the engines, which equates to reduced longevity. “So your capital costs and your running costs are going to increase substantially in order to get very limited savings on fuel.”

Beukes points out that there was a 34 percent saving of sulphur content in the jump from Euro 1 to Euro 3. “From Euro 3 to Euro 4 there was a 17 percent saving, and from Euro 4 to Euro 5 a mere five percent saving,” he adds. ”But you are looking at a R100 000 more just in the capital cost per vehicle.”

So there is a 22 percent saving in sulphur emissions from Euro 3 to Euro 5, but at a huge jump in both capital and maintenance costs. “This will kill the transport industry in the country,” states Beukes. “And if South Africa goes to the higher Euro ratings when the rest of Africa doesn’t, those trucks won’t be able to run cross border as they won’t be able to handle the dirty diesel in the rest of Africa. This will damage the African economy.”

However, he isn’t denying the environmental issues. “We are not marketing Euro-0 vehicles, we are marketing Euro 3. We need to create a realistic balance between economic viability and sustaining the environment – and if the need arises that we have to change, we will as we have the knowhow. Besides, vehicle emissions aren’t the environmental issue in Africa – it has more to do with the way in which we produce electricity. For example, the coal and furnaces we use in South Africa,” he points out.

To get his point across, Beukes provides some interesting facts. “If you look at the vehicle populations per km2, South Africa has nine, the BRIC countries have four and Europe has 90.” He adds that the amount of people per km2 also tells an interesting story. “South Africa has 36, the BRIC countries have 73 and Europe has 228,” he notes.

But the most enlightening numbers arise when you look at the kilograms of sulphur emissions per km2; with South Africa producing 5 491 kg, the BRIC countries 3 968 kg and Europe 82 279 kg.

“Europe, therefore, has to move to the higher Euro levels due to its population and overall emissions,” explains Beukes. “But in Africa, we don’t have the same number of people and – particularly as you go further north – we don’t have the knowhow to look after the more sophisticated vehicles. “So, we’re not comparing apples with apples,” Beukes points out.

But, according to Russell Lamberti, chief strategist at ETM Analytics – an independent consulting firm in Johannesburg – South Africa’s role as the gateway to the continent is being challenged at the moment. “There is this perception that South Africa is the gateway to Africa for investors, but I don’t think that is true at all – in the modern world you can fly to Lagos or Nairobi, get all the information you need on the ground there, and do business.”

He adds that there are exciting developments taking place in East and West Africa with South Africa and the southern African region being at risk of being left behind. “As it stands, South Africa is the most well-capitalised and sophisticated economy on the continent – with great institutions, a great banking sector and some great interest-rates. We don’t need to be told that South Africa is a more developed place than the Democratic Republic of Congo (DRC) or Ghana, but the rest of the continent is changing more rapidly in terms of dynamism,” Lamberti points out.

He adds that we need to change our perception of Africa and move away from the political or national borders of the individual countries. “It is better to think of the continent, particularly when talking about logistics, from a regional perspective.”

And here is where East and West Africa take the lead. “Kenya, Tanzania, Uganda, Ethiopia and Rwanda have all signed trade agreements – so those borders are starting to open up,” Lamberti emphasises. “So the connectivity in the eastern area is unfolding in a very interesting way.”

As for West Africa, there is some strong interregional trade taking place. “This is clustered around that indent in Africa, with a lot of ocean-going trade happening,” says Lamberti. And with ocean freight ultimately having to be moved from the ports across land to get to its final destination, this region looks promising for transport operators in general.

“It also has scale,” Lamberti points out. “There are 250 million people clustered over several different countries, but logistics across the region might be made very challenging by border control problems.” Hopefully the west will follow the east, with its 200 million people, and sign trade agreements as well.

“Southern Africa, by and large is a less exciting place,” says Lamberti. “Many of the developments in this region happened 100 years ago, however, there is still a lot more that needs to be done.” He adds that it is a pretty over regulated and mature region. “Specifically South Africa – it achieved a lot of dynamism in the past, but is now stagnating a bit.”

The region is also relatively sparsely populated with its 100 million people, which it is nowhere near the 200 million plus people that are found in the other regions.

“Africa is the most dynamic place in the world right now, as it is the fastest changing place in terms of positive growth,” Lamberti points out. “And South Africa could actually end up missing much of what’s going on in Africa by taking the arrogant stance that we’re the gateway to Africa … We’re only the gateway in so far as we are prepared to actually make the effort to get into the rest of Africa.”

He adds that from a logistics perspective there are a lot of opportunities that aren’t that close to our borders. “Southern African countries are going to have to learn to get right into the mix, right into the hearts of West and East Africa,” Lamberti reiterates.

So Beukes’s warnings are ringing true, with southern African countries being in no position to afford to be disconnected from the rest of Africa … But with the ongoing growth on the continent, Euro-5 (and even Euro-6) vehicles might be a reality in the not too distant future.

Welcome to Africa, we hope that you will all enjoy your journey.