Thursday, June 11, 2009
Why Has Africa Not Attracted More Interest From the U.S. Business Community?
American investment in Africa has the potential to provide much-need jobs, access to healthcare, and generally improve standards of living. In fact, American corporations are becoming increasingly interested in investing in Africa, with some regarding it as the last big growth market, but they are often deterred by Africa’s negative image, a new study shows.
US companies in some sectors, particularly technology companies, now regard Africa as “the last frontier for growth”. It has a market of one billion people, mobile telephone networks have been successful, and other countries, particularly China, are increasing their African investment thrust. Accessing that huge market will benefit investors, but also has the potential to improve life for Africans as workers and consumers.
The study was conducted by the Africa Business Initiative of the US Chamber of Commerce in Washington DC, and Baird’s CMC, an international communication management consultancy which conducted all of the interviews.
The conclusions and recommendations are based on in-depth interviews with top executives from some 30 US multi-national corporations, of which half are Fortune 100 Companies. The objective was to identify the factors affecting US corporations’ investment decisions in Africa and what US executives believe would make Africa more attractive to them. A second part will study the response of African leaders to these American attitudes.
“We want to tap in to the ‘conversation behind closed doors’, both in US boardrooms and in African cabinet discussions. We hope that these frank viewpoints by US business leaders and African policy-makers will help increase American investment into Africa,” said François Baird, Baird’s CMC co-chairman.
Commenting that attracting US investment is “a long haul”, the study recommended that African countries and regions sell themselves aggressively to corporate America which needs “a strong and specific pull from Africa”. This can be the pull of a big market or a big source of critical raw materials or a belief that there is a competitive advantage to early entry into African markets.
Ultimately, the goal is for improved communication and understanding between American investors and African leaders, contributing to mutually-beneficial economic growth.
For more information about Baird's CMC and the study: usafricainvestment.com.