A summary of the key information.
Africa is one of the most profitable continents in the world for businesses. Its economic growth prospects are amongst the highest. Africa has a youthful population, vast deposits of natural resources and numerous fast-growing economies amongst its 54 nations.
Please refer to statistics below.
Our early projects are in Zambia, because of its strategic location in the heart of Africa. The country has eight international borders – DR Congo, Malawi, Tanzania, Zimbabwe, Angola, Namibia and Botswana. Its location makes it set to become a logistics hub – rather like Atlanta or Chicago.
Zambia allows investors to benefit from the DRC market without exposure to the risks of being present in this country.
Historically Africa has been a difficult investment market and institutional investors have chosen to look at what they perceive to be more stable and predictable markets. Whilst it is widely appreciated that there is great potential the risks presented by political uncertainly, secession, civil unrest, continue to be cited as the main barriers to investment. At Meritus we are very aware of the risks that exist through our network of partners on the ground and our experience in many parts of the continent, we can isolate and control elements of risk in investing in Africa.
The project focus?
Our focus is on logistics. Whether digging for copper, importing refrigerators, or exporting avocados, all industries depend upon logistics to bring their goods and materials in and out of the continent.
The distances are vast. The landmass of Africa could fit within it the United States, India and Europe, with plenty to spare. Most freight moves by road yet many roads are in appalling condition and highly congested. Many borders cause delays measured in days and every day spent waiting costs a customer about $500.
Our projects are ESG compliant. They will improve the local environment by reducing carbon emissions and pollution, through reducing road miles and moving freight to water and rail wherever possible. They will create more and safer jobs. Our companies will act according to modernise standards of governance.
Why Lake Tanganyika?
We aim to help turn a natural barrier to road traffic into a logistics superhighway, revolutionising transportation between the mines and cities of Eastern Congo, and the sea. We believe local businesses will benefit by making it easier to trade between the countries. Indeed, we expect the biggest users to include regional sugar and cement producers selling their products within the region.
Why a Dry Port?
The area will be used to build a dry port to enable freight to be dropped at the border and picked up by wholesalers in DR Congo, catering for everything from mining supplies through to consumer goods. In short, we will create a wholesale trading area at the border. At the existing post, businesses currently sell everything from sugar and cement to clothing and food from the back of trucks.
We intend to work with the Zambian and Congolese governments to create an express border post, charging a premium to trucks and reducing congestion for cross-border traffic.
A planned rail link to the Copperbelt means that multimodal transport from Dar Es Salaam should also become possible.
‘Containerisation… has done more for trade than every international trade agreement in the past 50 years put together.’ – The Economist.
We believe the solution would be to containerise freight, allowing it to be carried by rail from Dar Es Salaam to either Kigoma (the main Tanzanian port on the lake) or Mpulungu via Kasama, the nearest stop on the Tazara railway. From there it would be transferred to a vessel developed by Meritus, for shipping to its destination. The use of containers in world trade was associated with a 790% increase in global trade in 20 years.
Why the need for trucks?
A strategic partner, being supportive of multimodal transport solutions on both the shipping and dry port projects, working to create efficient shuttle services to make multimodal transportation a reality.
One of the key goals of Meritus Development is to address the gaps in the logistics chain and ultimately contribute to the collective prosperity of the continent.
Each of the three projects is transformative – if they succeed, as Meritus believes, they will greatly reduce transport costs and thus increase economic opportunity. They will also present opportunities to expand both horizontally and vertically.
During a recent meeting with the President of a prominent African nation, he made this point very clear, “our crops rot in the fields because we can’t get them to market”. At the same time, high logistics costs increase the price of everything from food to consumables, putting goods people take for granted out of the reach of many consumers in certain parts of the world.
Reducing logistics costs will in turn reduce prices, opening major markets to suppliers and giving ordinary people the opportunity to buy more affordable food – and own the means of storing it safely.
Each of these three opportunities have been designed to make transporting goods cheaper, easier and faster, easing severe bottlenecks, which are an impediment to trade and thus economic growth. This will enable trade to increase, in turn increasing economic growth. In each case, there will be significant positive impacts – and Meritus expects to generate healthy profits for its investors at the same time.
Fast-growing Population & Urbanisation
Nigeria, Ethiopia, DR Congo, Egypt, Tanzania, Kenya and South Africa — will soon hold HALF of the continent’s population
43% of Africans across the continent will belong to the middle or upper classes
Increased Investment, Digital and Mobile Access & Industrialisation
Mobile data access is expected to increase sevenfold from 2017-2025
Industrialisation estimated to double production within a decade