Singapore‘s Growing Investment in Africa
On the coast of Nigeria, a few hours’ drive from the center of Lagos, a small corner of Africa resembles a mini-Singapore. The Lagos Free zone is operated by Tolaram, a Singapore-based conglomerate. The sprawling 850-hectare site, which sits adjacent to the Chinese-operated Lekki Port, offers various tax and customs incentives for companies that set-up manufacturing facilities within the zone.
Kellogg’s, Colgate-Palmolive and BASF are among those who have been attracted to the site, which has a distinctly Singaporean flavour thanks to the manicured lawns and rows of neatly planted palm trees that lie outside the factory buildings. Asian artwork even adorns the walls of the headquarters of the zone.
Tolaram is one of several Singaporean companies in the trade,logistics and manufacturing sectors to have planted deep roots in Africa. Othre well-known companies with activities in Africa include agribusiness giant olam International (which originated in Nigeria,before moving its headquarters to Singapore) and food processing group Wilmar International. And, as more Singapore-based companies look to diversify, the stage is set for greater investment in Africa.
Shipping success
An obvious starting point for Singapore’s engagement in Africa comes from its mighty shipping industry. singapore has been a major international shipping hub as the early nineteenth century and as its port expanded several Singapore-headquartered companies have grown into globally significant players in the shipping industry.
Pacific International Lines (PIL), one of Singapore’s largest shipping companies, has a longstanding presence in Africa. It first begun to offer services to ports in the red Sea and on the East African coast more than 50 years ago, before expanding to serve the southern and western shores of the continent.Some 30% of PIL’s Asian exports are now bound for Africa, with the company providing seven services a week that cover a network of more than 40 ports.
“Africa is not a future opportunity – it is indeed a region where tangible progress has already been made, and there is an interest to develop more business relationships between Singapore and Africa,” says Lionel Chatelet, chief commercial officer at PIL.
Chatelet points out that Singaporean companies are at a stage where they need to expand beyond their traditional markets in Asia. Africa, he notes, is an obvious place to turn. “It represents one of the world’s fastest-growing regions, with rapid urbanisation, a growing middle class, infrastructure developments, and significant natural resources.”
He emphasises that one of the keys to tapping into the “immense potential” of the continent is a commitment to a long-term approach and to building local partnerships.
Indeed, PIL’s decades-long experience in the continent has helped the company to harness opportunities to launch a range of auxiliary services beyond shipping. “We are actively developing our capabilities to develop intermodal corridors, using trucks and rail, to reach landlocked regions,” says Chatelet. “We intend to team up with regional partners to increase our reach and propose last mile delivery solutions to our customers in the near future.”
Digital dividend
Along with shipping and commodity trading, Singapore also has a global reputation as a leader in using technology to make goverment services more efficient. Singapore itself announced in 2014 that it aimed to become a ‘Smart Nation’.