The US Chamber of Commerce mission of the Africa Business Initiative is to engage the U.S. business community on policies that foster foreign direct investment in Africa, to facilitate trade between the United States and African countries, and to expose the U.S. business community to the continent’s vast economic opportunities.
In partnership with Baird’s CMC, an inside-the-boardroom survey of attitudes toward corporate investment in Africa among leading U.S. corporations was conducted. An excerpt of the executive summary has been presented here for your information, while you may access www.uschamber.com/international/mideast for details.
• U.S. executives point out that Africa is only one of many possible destinations that American corporations consider for investment. Investment is highly competitive, and many countries are vying to become the destination of choice for capital. That said, U.S. companies in some sectors, particularly technology, now regard Africa as the last frontier for growth.
• These companies believe that Africa, with its market of about 1 billion people, can no longer be ignored. Even with this interest, Africa faces tough competition and huge hurdles to attract U.S. investment.
• Globally, competition for American FDI is high. Countries from all regions showcase their advantages, align their offers to U.S. needs, clamor for attention, and invest in their own countries to attract additional investment. Consequently, U.S. corporations do not lack investment choices, and they rarely consider African nations. Further, news about Africa is largely about chaos and unrest.
• Africa is not active or aggressive enough about attracting investment; the voices of the few countries that are making an effort get lost in the surrounding negative noise. Some African countries are making special efforts to assist foreign companies that invest. For example, Nigeria’s president regularly engages with the local leaders of foreign companies to help cut through bureaucratic tape.
• U.S. corporations need a strong and specific draw from Africa to make investment worthwhile. This can be the lure of a robust market, a big source of critical raw materials, or a belief that there is a competitive advantage to early entry into African markets.
• Overall, U.S. businesses do not view Africa as an attractive place to invest. The image of lawlessness, corruption, unstable governments, an inadequate infrastructure, uneducated or untrained people, and an unwelcoming government attitude toward business serve as major deterrents.
Footnote: Africa is made up of many nations and each has its own character.
According to Professor Charles Soludo, the immediate past Governor of the Nigerian Central Bank at the 2006 World Economic Forum, Johannesburg, South Africa ‘we must begin to differentiate Africa as a mere geographical expression…it happens to be that all these countries are banded by geography, but in terms of the economics, the potentials and prospects, they are as different as they are similar.
While I agree that Africa has much to do in setting growth and development targets, the international media is not helping matters.
Again, in the words of Professor Charles Soludo, ‘whenever images of Africa appeared on TV, they were almost related to one calamity or another; in sharp contrast to images of Asia, traditionally depicted by the media as an economic success’. According to Mr. Jim Goodnight, Chief Executive Officer, SAS, an America software company, foreign direct investment do not flow into an area that is perceived to be on a low growth plateau. A strong call for rebranding of the continent has become necessary more than ever before. Time has come to see a different Africa on TV.
With reference to Nigeria, more than ever before, Nigeria is inundated by skilled and experienced home grown and Diaspora human capital needed to jump start the economy. Corporate America should exploit this opportunity!
On inadequate infrastructure, the poor transportation network, erratic power supply, insufficient housing, inadequate ICT penetration are good reasons to invest in Nigeria. Returns on investment are well over thirty percent and repatriation of funds is guaranteed. Good reasons to gloss over the risks and take the plunge.
It worked for the Chinese people. At a time no decent country would touch Nigeria with a long pole, much less taking interest in its economy, no thanks to a debt overhang of $35 billion (since forgiven), a rating as one of the most corrupt nations in the World (recently improved rating); China waved off the risks and took the plunge.
While Nigeria’s known traditional trading allies, Britain and the United States of America keep moaning about the hostile business environment and pervasive insecurity of lives and properties in the country, the Chinese befriend the local people, play football with them, take commuter buses and learn the local languages.
For more information on how we can assist you with entry into the Nigerian and West African market, contact Ndudi Osakwe on firstname.lastname@example.org