Capital Equipment News May 2017

BUSINESS – USED EQUIPMENT

IronPlanet anticipates a very strong future for Africa, with phenomenal opportunities available in the used equipment marketplace.

HIGHLIGHTING AFRICAN USED EQUIPMENT OPPORTUNITIES

There are unique challenges in the African used equipment market. The continent is vast and it requires local knowledge to gauge the variable demand. The situation on the ground is economically fluid and politically uneven. The perceived imbalance between risk and reward inhibits buyers. However, there is a general consensus in the industry that Africa offers great opportunities for buyers and sellers alike. The key challenge is defining just where and when? Paul Williamson , sales director for Africa at IronPlanet, writes exclusively for Capital Equipment news.

L eading online auction company IronPlanet is currently replicating its highly-trusted and globally successful model for the African continent. As such, it offers hard-won insight on avoiding the pitfalls of dealing in used heavy construction machinery. No more so than in mitigating the problems perennially associated with doing business in Africa, such as corruption, fragile economies, varying levels of red tape and inadequate infrastructure.

Africa’s big questions There are big questions over doing business in Africa. Taking a broad view, the biggest hindrance confronting participants is the negative influence of despot governments; while the biggest hurdle remains corruption. However, corruption is not solely Africa's problem. The instability of the region reveals itself in “one-trick” economies – in particular, those countries in West Africa – almost totally dependent on single

commodities to fund large and ambitious construction projects. The global collapse in oil prices, and the current situation where oil commands prices of about $50 a barrel, is in stark contrast to government construction budgets based on receiving a price of $100 plus. Subsequently, many big infrastructure projects have ground to a halt. As a result, there is a huge amount of construction equipment currently available on the African market.

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