In accordance to the IMF’s 2019 World Economic Outlook report, six of the world’s fastest-growing economies are in Africa.
Over the subsequent three many years, Africa’s inhabitants is predicted to double to 2.four billion. By 2050, about one in four individuals in the world might be African and the continent’s financial system might be value $29 trillion, greater than four occasions its current GDP (in PPP terms).
Africa’s giant market and financial potential underlie the rising efforts by China, India, Europe, North America and the Center East to deepen trade, investment and economic ties with the continent.
At present, China – the world’s second-largest financial system – leads the pack when it comes to trade and investment, and does plenty of enterprise with Africa.
Chinese entrepreneurs now throng the streets of most African cities and personal outlets and factories on the continent, simply as a rising variety of African importers scour main markets in China and make offers with manufacturers and wholesalers.
But where is the USA, the world’s largest financial system, in all this?
Regardless of having the largest inhabitants of Africans in the diaspora, and robust historical, language and political ties to the continent, how come America’s trade and investment activities in Africa do not run as deep as China’s?
In 2018 alone, the US spent over $2.6 trillion on imports from 200 nations. Of this, just one.four% ($24.9 billion) got here from African nations. In distinction, Africa’s exports to China stood at roughly $100 billion. And while US exports to Africa have been just about $14 billion, China bought up to $105 billion in items and providers to Africa.
The details and figures are clear: the USA and Africa are lacking out on vital trade and investment alternatives with each other.
To know why this hole exists and how to handle it, this text options an unique interview with Titus Olowokere, the organizer of the maiden version of the US-Africa Trade & Investment International Summit (USATIGS) happening this September in Atlanta, Georgia.
On this interview, he explores some of the huge explanation why the US and Africa aren’t doing as much business as they need to and how entrepreneurs and buyers on each side can change the recreation and reap huge benefits.
- 1 In your opinion, what are the most fascinating business alternatives that can come from stronger trade and investment ties between Africa and the USA?
- 2 Despite these alternatives, why are African entrepreneurs and companies not benefiting as they should?
- 3 The US is a large potential market for unique and value-added African products, however why does it appear unreachable for many African entrepreneurs and companies?
- 4 Africa is a promising rising market. How can we get more US entrepreneurs and corporations to enter the African market, and what are the largest challenges they face?
- 5 In your opinion, does Africa have any distinctive or special benefits to play in the US market that other areas of the world don’t have?
- 6 What exactly is the US-Africa Trade Summit, and why ought to entrepreneurs and businesses be focused on it?
- 7 Up to now, what are the most notable achievements of the summit, and what are the largest points it faces?
- 8 The place and when is the 2019 summit holding, and how can anyone register to attend?
In your opinion, what are the most fascinating business alternatives that can come from stronger trade and investment ties between Africa and the USA?
Let me first say that there are huge opportunities for enterprise and investment in Africa in every sector. But when I have been to decide the prime four, I might say agriculture, entertainment, tourism, and info know-how.
In fact, two of the more outstanding assets Africa has are manpower and arable land, so you will understand why I discussed agriculture first.
Africa’s dense youth-centric population also means that there is an abundance of performance and consumptive entertainment expertise.
As for tourism, the landscape is a joy to behold. The truth is, I dare say that the potentials in these areas have barely been tapped, let alone absolutely explored.
Additionally, the widespread denominator to real financial progress throughout all sectors is strong ICT infrastructure, together with enterprise and shopper purposes.
The continent is on the verge of explosive financial improvement. Since the USA has reached several milestones in these areas, we don’t want to re-invent the wheel.
America needs Africa as a strategic trade companion, therefore stronger ties between the two continents can be of serious mutual benefit.
Despite these alternatives, why are African entrepreneurs and companies not benefiting as they should?
You understand in enterprise we are saying ‘it takes money to make money.’
You could have great concepts but you want the finances to execute them. Africa’s potentials might stay “potentials” till they are explored by means of focused investments.
For instance, in the agricultural sphere, farming in Africa continues to be principally at the subsistence degree. A whole group might be farming much less acreage than one smallholder in the United States for example, and they’ll produce much less yield per acre because they do not have the know-how in type of fortified or modified seeds and other inputs, mechanization, and entry to extension providers as their counterparts.
There’s also the concern of the sometimes-hostile business setting in some nations. Where government policy is counter-investment, this may be problematic.
Buyers want their investments protected. So, if there’s uncertainty in the political local weather as is usually the case in some nations, this might negatively have an effect on economic progress.
Additionally, African entrepreneurs discover it challenging to tell their stories. Venture feasibility studies and proposals value money to develop and are often unaffordable. And in some instances, the entrepreneur is sort of unaware of the alternatives that exist.
One other area of great concern is entry to info, networking, and leverage. It’s stated in widespread parlance that “information is power”. You can’t benefit from alternatives in the event you don’t even know they exist.
This is one purpose we encourage African entrepreneurs to make the most of international conferences, study new strategic business info, and connect with those that may help grow their business enterprises, even beyond their imagination.
The US is a large potential market for unique and value-added African products, however why does it appear unreachable for many African entrepreneurs and companies?
The USA market is like a labyrinth, an obdurate maze, for many African entrepreneurs. The policies and procedures that have to be resolved by companies are simply overwhelming and many typically surrender all through the journey.
There are logistical and regulatory points. Typically it is just a little troublesome to inform which ought to be placed on the greater rung of the deterrent spectrum.
Trade between Africa and the States isn’t like one African group trading with their neighbors. Yes, I do know it is tough enough to trade inside Africa, however this does not imply trading with North America is straightforward either.
Additionally, there are so many regulatory hurdles, standardization, documentation, sanitary and phytosanitary measures and agreements, in addition to different very strict compliance necessities in the mix.
There’s also the politics of enterprise: trade relations and treaties. These are potential roadblocks that want to be successfully navigated. A platform akin to the U.S.-Africa Trade & Investment International Summit (USATIGS) creates opportunities to determine and resolve these challenges.
General, there is a paucity of data of the market and how it works. There’s minimal government and diaspora help, labor and trade price elements, and typically a scarcity of capital and political will to access the market like their counterparts.
Africa is a promising rising market. How can we get more US entrepreneurs and corporations to enter the African market, and what are the largest challenges they face?
Communication and info; that’s the place all business begins. We’d like to speak.
In the most elementary sense, enterprise occurs once I know you have got one thing to supply that I want. Or you recognize one thing I would like, and you’ve got the potential of fulfilling it and so you come to me.
Africa and the USA want to talk more in targeted strategic forums. There ought to be more convocations devoted to these conversations. International gamers need to be put on the similar table and be given a chance to interact. There isn’t a other approach.
We’d like to create market locations the place these exchanges will take place. And that’s what USATIGS is all about.
Talking of challenges, one among the largest limitations to communication is language. On this instance, we are speaking mainly when it comes to business language. Africa and the US need to reach a language compromise.
Let me give an example. Say an American filmmaker needs to make a movie set in Africa and he decides to go to Kenya as an example. His first challenge can be learning how issues are finished on this a part of the world.
He can’t import his enterprise language and techniques wholesale; that can’t work. He wants to have his expectations align with local realities.
First, he would understand he doesn’t have the similar sort of construction he is used to having in his country, so he should adapt to the local setting. That may be a main problem.
The same obstacles would probably exist, and much more so, ought to an American select to spend money on another sector.
The US entrepreneur should even have a extra open mind and be keen to educate himself on the African culture.
Africa, like different investment locations, has its challenges, uncertainties, and risks. Nevertheless, with mandatory due diligence, analysis, and a well-developed strategic strategy, the upside is value the time, effort and money invested.
At trade enabling platforms, similar to USATIGS, members are inspired to construct relationships, discover engaging incentives to US entrepreneurs and corporations, and reconnoiter with business community infrastructure, the safety, legal and financial alternatives.
In your opinion, does Africa have any distinctive or special benefits to play in the US market that other areas of the world don’t have?
Sure, we do.
You will recall that in the yr 2000, the African Progress and Alternative Act (AGOA), a trade choice program, was enacted as the middle of U.S.-African engagement on trade and investment.
AGOA offers trade preferences for African exporters – duty-free and principally quota-free access to the US market – to approximately 6,500 tariff strains.
This consists of ‘AGOA products’ in addition to these textile and clothes tariff strains that qualify for duty-free entry beneath AGOA’s sporting apparel provisions.
This strategic placement makes Africa distinctive.
So, the US sees the potentials of Africa and the majority of the 28 million small- and medium-sized enterprises (SMEs) in the United States want to tap into these potentials even more.
AGOA, whereas a fantastic opportunity, is just not properly understood or appreciated by African entrepreneurs. There’s much potential to be gained by each events for a greater understanding of the AGOA pact.
Presently, U.S. exports to sub-Saharan Africa stands at over $14 billion principally between the US, South Africa, and Nigeria. What about the rest if Africa? There are particular alternatives for enlargement.
What exactly is the US-Africa Trade Summit, and why ought to entrepreneurs and businesses be focused on it?
As I mentioned earlier, the U.S.-Africa Trade & Investment International Summit, alias USATIGS 2019, is a trade Summit and multi-sector expo that provides African companies a robust platform and wonderful alternative to exhibit and promote their merchandise and providers in the United States.
This is the third in the collection of trade summits, scaling out from the erstwhile profitable U.S.-Nigeria Agribusiness investment Summit (USNAGRIS).
The objective of the summit is to harness and showcase feasible and engaging investment opportunities throughout the big U.S.-African Trade axis.
The Summit will present a strong stage to interact and showcase applicable applied sciences, innovations and monumental trade potentials in Africa overlaying a number of sectors, together with agribusiness, water and irrigation, aviation, power, leisure and tourism, infrastructure and real property, maritime and delivery, healthcare, hospitality, ICT, waste administration and environmental remediation and transportation in addition to mining and strong minerals.
Many senior government officials, thought leaders, captains of business and material specialists shall be attending this yr’s summit.
So, why should entrepreneurs and business be considering it? The answer could be summarized in two phrases; ‘access to the US market’ and ‘business networking.’
We know Africa has an unlimited investment potential and we all know that US buyers are in search of promising alternatives to make investments their money. We know that each events and their economies will profit immensely from this partnership, and the goal of the summit is to make this essential handshake happen.
So, from the 26-28 September 2019, we shall be hosting the US Africa Trade and Investment International Summit with the theme “Expanding the frontiers of U.S – Africa Trade and Investment”.
Individuals at this yr’s summit could have unparalleled entry to community with business professionals in the trade and investment area, and achieve high-level access to representatives of African governments.
Entrepreneurs and businesses could have the opportunity to expose their products and providers, amplify their brand, take part in dynamic periods on business in Africa, and have info to entry loans, equity buyers and technical companions for his or her respective companies.
Up to now, what are the most notable achievements of the summit, and what are the largest points it faces?
This is the first edition of the pan-African-American Trade and Investment Summit. The primary two editions have been in the U.S.-Nigeria trade corridor.
The success of the first two editions led to the scaling up of the summit to a continental degree.
The knowledge on funding opportunities in prior editions has helped many individuals to navigate the maze and apply for Farmers-to-Farmers funding opportunities with USAID.
Many African entrepreneurs have also been in a position to make market connections with uptakers and consumers of their agro-commodities in the USA and have improved on their packaging strategies to meet US compliance and market needs.
The place and when is the 2019 summit holding, and how can anyone register to attend?
As I mentioned earlier, the summit will maintain between September 26-29 in Atlanta, Georgia, and we’ve got the lovely and prestigious Kennesaw State College (KSU) Middle as the Conference location.
Registration is now open and people and organizations can register for both the common or all-access ticket at this link: Register for the 2019 US-Africa Trade & Investment International Summit