26 Aug 20

Differences make Africa Middle East interesting for Fleet & Mobility

Despite huge differences, Africa and the Middle East often get lumped together in corporate geography. Yet those differences are what makes AME such an interesting region – especially in terms of Fleet and Mobility.

Why? In short, because the Middle East has the budget for high-tech innovation, and Africa has the potential for huge growth. And both are close enough to influence the other – as is already happening.

Let’s start with Africa, home to 1.2 billion people today (17% of the global total), set to rise to 2.5 billion (25%) in 2050 and 4.5 billion (40%) by the end of the century. Africa is not just getting numerically more important: it’s also shaking off its reputation for conflict and misery. Governance is improving and economies are booming – in certain countries at least.

Read more in the 2020 edition of the Global Fleet Survey, which can be purchased by clicking on this link.

Diverse continent

Inevitably, Africa will occupy more space on the corporate maps of the future, including those of fleet professionals. In that respect, it’s important to keep in mind that Africa is a continent, and at least as diverse as Europe or Asia. Nigeria, Egypt and South Africa have substantial, modern economies; while on the other end of the scale, countries like Mali and DR Congo remain extremely underdeveloped.

However, it is true that Africa as a whole is beset by infrastructural challenges that no other continent faces. For example, there is no transcontinental transport infrastructure – no single road that cuts conveniently from east to west. Moving goods from Kenya to Nigeria means taking the long road: south to South Africa, then north again on the Atlantic coast, a trip that can take up to six weeks.

Harsh climate and limited infrastructure dictate the prime concern for fleets operating in Africa is not sophistication and innovation, but sturdiness and simplicity. In many places, ownership is the only option. Leasing is available only in the more advanced markets.

Regional differences

Regional differences are also apparent in OEM preferences: North Africa is under strong European (mainly French) influence, East Africa is influenced by the Middle East, West Africa by its relative proximity to North America and South Africa has a definite European feel, thanks to the significant manufacturing presence of several European OEMs.  Toyota, on the other hand, is everywhere.

Don’t expect Africa to ‘mature’ into a fleet and mobility model comparable to Europe or North America. In some respects, Africa will remain significantly behind for the foreseeable future. In others, Africa is out-innovating these much more mature markets. That’s because of the burgeoning middle classes in the large cities of East Africa and West Africa provide both the motive and the opportunity to try out new models of mobility. One example: the ubiquitous smartphones providing hailing platforms for homegrown transport options such as the boda bodas (motorcycle taxis) of Uganda, in one case even specifically for electric boda bodas.

Talking about innovation brings us to the Middle East. Again, a catch-all term for a very diverse region, covering both countries suffering from war (like Syria and Yemen) and some of the world’s most advanced economies (notably Gulf States like the United Arab Emirates, Kuwait, and Saudi Arabia).

Global hub

Especially the UAE has emerged as a regional and global hub – not just for its two major airlines, Emirates and Etihad – but also for various innovative and prestigious mobility projects. Dubai, for instance, plans to become the world’s first ‘smart city’: by 2030, it wants 25% of its journeys managed by driverless vehicles. The city is also experimenting with so-called ‘sky pods’, capsules suspended and transported by steel cables. Fuelled by internal competition, various emirates are trying out their own version of future mobility, driven by Artificial Intelligence and/or the Internet of Things. The most impressive mobility innovation is without a doubt the Hyperloop, which would reduce the commute between Abu Dhabi and Dubai from one hour (by car) to 12 minutes.

With the UAE functioning as the broader region’s mobility innovator, it doesn’t take a giant leap of the imagination to see its more workable examples being deployed in the mass markets of Africa, which are in increasing need of creative mobility solutions.

When the supply of mobility innovation meets its demand, the two major components of the AME region will finally have more in common with each other than mere geographic proximity.

Authored by: Frank Jacobs