General Electric Co. (GE) is seeking to more than double revenue from Africa to as much as $10-billion over the next five years as it targets power, health and locomotive opportunities in countries including Nigeria and Ethiopia.
“We’re bullish on Nigeria,” Thomas Konditi, GE’s president for transportation for Africa and South Africa chief executive officer, said in an interview on Wednesday at the World Economic Forum in Cape Town. “We met with a couple of the incoming leadership and they’ve put rail right behind power. They don’t have mines as much, so you’re going to look for more general freight.”
Nigeria, Africa’s biggest economy, transports only 0.1% of its freight by rail and could boost the number of locomotives to as many as 500 engines from 25 now, Konditi said. The company, based in Fairfield, Connecticut, plans to resume talks with the new government in Nigeria on an agreement with the previous administration for 200 locomotives, he said. Nigerian President Muhammadu Buhari took office on May 29 after defeating Goodluck Jonathan in the March elections.
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While nine of the world’s 15 fastest-growing economies are in Africa, some countries are contending with a downturn in commodity prices, power cuts and political instability. Electricity shortages and a lack of infrastructure, including rail, are limiting growth and offer opportunities for investment.
Jeff Immelt, GE’s chief executive officer, has identified Africa as one of the company’s most important growth areas, with plans to invest $2-billion in the region by 2018 as well as doubling its workforce on the continent. The Africa spending by GE will go into developing facilities, improving supply chains and for training workers, he said last year.
GE’s African revenues will be more than $4-billion this year, led by Nigeria, Angola and South Africa, compared with about $1-billion in 2010, according to Konditi. The company could open a manufacturing facility in Nigeria if there is demand for more locomotives, he said.
“Five years from now, I don’t know why we shouldn’t be up to the 8-[billion] to 10-billion range,” Konditi said, referring to revenue from Africa in dollars.
GE’s sales from the Middle East and Africa of $15.6-billion last year were about 10.6% of the company’s total revenue.
Ethiopia, the continent’s second-most populous country after Nigeria, also offered investment opportunities, particularly in the health-care industry, he said.
“Ethiopia holds a lot of interest,” Konditi said. “We’re probably going to open a health-care assembly facility in Ethiopia,” as the government builds new hospitals, he said. – Bloomberg, with assistance from Rick Clough in New York.