In accordance to the IMF’s 2019 World Financial Outlook report, six of the world’s fastest-growing economies are in Africa.
Over the next three many years, Africa’s inhabitants is predicted to double to 2.four billion. By 2050, about one in 4 individuals in the world can be African and the continent’s financial system might be value $29 trillion, more than four occasions its present GDP (in PPP terms).
Africa’s giant market and economic potential underlie the rising efforts by China, India, Europe, North America and the Middle East to deepen trade, investment and financial 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 lots of enterprise with Africa.
Chinese language entrepreneurs now throng the streets of most African cities and personal outlets and factories on the continent, simply as a growing number of African importers scour major markets in China and make offers with producers 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 actions 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 contrast, Africa’s exports to China stood at roughly $100 billion. And whereas US exports to Africa have been nearly $14 billion, China bought up to $105 billion in items and providers to Africa.
The information and figures are clear: the USA and Africa are lacking out on vital trade and investment opportunities with each other.
To know why this gap exists and how to handle it, this article options an unique interview with Titus Olowokere, the organizer of the maiden edition of the US-Africa Trade & Investment International Summit (USATIGS) happening this September in Atlanta, Georgia.
On this interview, he explores some of the huge the reason 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 enterprise alternatives that may come from stronger trade and investment ties between Africa and the USA?
- 2 Despite these alternatives, why are African entrepreneurs and businesses not benefiting as they need to?
- 3 The US is a large potential marketplace for unique and value-added African products, however why does it appear unreachable for many African entrepreneurs and businesses?
- 4 Africa is a promising emerging market. How can we get extra 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 unique or particular advantages to play in the US market that different areas of the world don’t have?
- 6 What precisely is the US-Africa Trade Summit, and why ought to entrepreneurs and businesses be excited about it?
- 7 Thus far, what are the most notable achievements of the summit, and what are the largest issues it faces?
- 8 Where and when is the 2019 summit holding, and how can anyone register to attend?
In your opinion, what are the most fascinating enterprise alternatives that may come from stronger trade and investment ties between Africa and the USA?
Let me first say that there are massive alternatives for business and investment in Africa in every sector. But if I have been to decide the prime 4, I might say agriculture, entertainment, tourism, and info know-how.
In fact, two of the extra outstanding assets Africa has are manpower and arable land, so you will perceive why I mentioned agriculture first.
Africa’s dense youth-centric inhabitants additionally means that there’s an abundance of performance and consumptive entertainment talent.
As for tourism, the panorama is a pleasure to behold. The truth is, I dare say that the potentials in these areas have barely been tapped, not to mention absolutely explored.
Also, the widespread denominator to real financial progress across 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 do not need to re-invent the wheel.
The USA wants Africa as a strategic trade associate, hence stronger ties between the two continents can be of serious mutual profit.
Despite these alternatives, why are African entrepreneurs and businesses not benefiting as they need to?
You recognize in enterprise we are saying ‘it takes money to make money.’
You’ll have nice concepts but you need the funds to execute them. Africa’s potentials might stay “potentials” till they are explored by way of targeted investments.
For instance, in the agricultural sphere, farming in Africa continues to be principally at the subsistence degree. A whole group could possibly be farming much less acreage than one smallholder in the United States for example, and they’ll produce less yield per acre as a result of they don’t have the know-how in type of fortified or modified seeds and different inputs, mechanization, and access to extension providers as their counterparts.
There’s also the problem of the sometimes-hostile business surroundings in some nations. Where authorities policy is counter-investment, this may be problematic.
Buyers need their investments protected. So, if there’s uncertainty in the political local weather as is usually the case in some nations, this is able to negatively affect economic progress.
Also, African entrepreneurs find it challenging to tell their tales. Venture feasibility research and proposals value cash to develop and are often unaffordable. And in some instances, the entrepreneur is sort of unaware of the alternatives that exist.
Another 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.
That is one cause we encourage African entrepreneurs to make the most of international conferences, study new strategic enterprise info, and join with those that may help develop their business enterprises, even beyond their imagination.
The US is a large potential marketplace for unique and value-added African products, however why does it appear unreachable for many African entrepreneurs and businesses?
The USA market is like a labyrinth, an obdurate maze, for a lot of African entrepreneurs. The insurance policies and procedures that have to be resolved by businesses are merely overwhelming and many typically hand over all through the journey.
There are logistical and regulatory points. Typically it is just a little troublesome to inform which ought to be positioned on the greater rung of the deterrent spectrum.
Trade between Africa and the States is just not like one African group buying and selling with their neighbors. Yes, I do know it is tough sufficient to trade within Africa, but this doesn’t imply trading with North America is straightforward both.
Additionally, there are so many regulatory hurdles, standardization, documentation, sanitary and phytosanitary measures and agreements, as well as other very strict compliance necessities in the combine.
There’s additionally 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’s a paucity of data of the market and how it works. There’s minimal authorities and diaspora help, labor and change price elements, and typically a scarcity of capital and political will to access the market like their counterparts.
Africa is a promising emerging market. How can we get extra 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, business happens once I know you have got one thing to supply that I want. Or you already know one thing I would like, and you’ve gotten the potential of fulfilling it and so that you come to me.
Africa and the USA need to communicate more in focused strategic forums. There ought to be extra convocations devoted to these conversations. International players need to be put on the similar table and be given a chance to interact. There isn’t any other approach.
We’d like to create market places the place these exchanges will happen. And that’s what USATIGS is all about.
Talking of challenges, certainly one of the largest limitations to communication is language. On this instance, we are speaking primarily when it comes to enterprise language. Africa and the US want to reach a language compromise.
Let me give an instance. Say an American filmmaker needs to make a film set in Africa and he decides to go to Kenya as an example. His first challenge can be learning how issues are accomplished on this a part of the world.
He can’t import his enterprise language and techniques wholesale; that can’t work. He needs to have his expectations align with native realities.
First, he would understand he does not have the similar sort of structure he is used to having in his country, so he should adapt to the native setting. That may be a major problem.
The identical obstacles would probably exist, and much more so, ought to an American choose to spend money on another sector.
The US entrepreneur should even have a more open thoughts and be eager to educate himself on the African culture.
Africa, like different investment locations, has its challenges, uncertainties, and dangers. Nevertheless, with essential due diligence, analysis, and a well-developed strategic strategy, the upside is value the time, effort and cash invested.
At trade enabling platforms, comparable to USATIGS, members are encouraged to construct relationships, discover engaging incentives to US entrepreneurs and corporations, and reconnoiter with enterprise community infrastructure, the security, authorized and financial opportunities.
In your opinion, does Africa have any unique or particular advantages to play in the US market that different areas of the world don’t have?
Yes, we do.
You will recall that in the yr 2000, the African Progress and Opportunity 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 entry to the US market – to approximately 6,500 tariff strains.
This consists of ‘AGOA products’ as well as these textile and clothing 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 need to tap into these potentials much more.
AGOA, while an awesome alternative, isn’t properly understood or appreciated by African entrepreneurs. There’s a lot potential to be gained by both 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 relaxation if Africa? There are definite alternatives for enlargement.
What precisely is the US-Africa Trade Summit, and why ought to entrepreneurs and businesses be excited about it?
As I discussed earlier, the U.S.-Africa Trade & Investment International Summit, alias USATIGS 2019, is a trade Summit and multi-sector expo that gives African businesses a robust platform and wonderful alternative to exhibit and promote their products 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 possible and engaging investment alternatives across the large U.S.-African Trade axis.
The Summit will present a strong stage to interact and showcase applicable technologies, inventions and monumental trade potentials in Africa masking a number of sectors, together with agribusiness, water and irrigation, aviation, power, leisure and tourism, infrastructure and real estate, maritime and delivery, healthcare, hospitality, ICT, waste management and environmental remediation and transportation as well as mining and strong minerals.
Many senior authorities officers, thought leaders, captains of business and material specialists shall be attending this yr’s summit.
So, why should entrepreneurs and enterprise be all in favour of it? The reply may be summarized in two phrases; ‘access to the US market’ and ‘business networking.’
We know Africa has an unlimited investment potential and we know that US buyers are in search of promising alternatives to make investments their money. We know that both parties and their economies will profit immensely from this partnership, and the goal of the summit is to make this essential handshake occur.
So, from the 26-28 September 2019, we shall be internet hosting the US Africa Trade and Investment International Summit with the theme “Expanding the frontiers of U.S – Africa Trade and Investment”.
Members at this yr’s summit could have unparalleled entry to community with enterprise professionals in the trade and investment area, and achieve high-level access to representatives of African governments.
Entrepreneurs and businesses could have the alternative to expose their products and providers, amplify their model, participate in dynamic periods on enterprise in Africa, and have info to entry loans, fairness buyers and technical partners for their respective businesses.
Thus far, what are the most notable achievements of the summit, and what are the largest issues it faces?
This is the first version of the pan-African-American Trade and Investment Summit. The first two editions have been in the U.S.-Nigeria trade hall.
The success of the first two editions led to the scaling up of the summit to a continental degree.
The knowledge on funding alternatives in prior editions has helped many members to navigate the maze and apply for Farmers-to-Farmers funding opportunities with USAID.
Many African entrepreneurs have additionally 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 wants.
Where and when is the 2019 summit holding, and how can anyone register to attend?
As I discussed earlier, the summit will maintain between September 26-29 in Atlanta, Georgia, and we have now the lovely and prestigious Kennesaw State University (KSU) Middle as the Conference location.
Registration is now open and interested individuals and organizations can register for both the regular or all-access ticket at this hyperlink: Register for the 2019 US-Africa Trade & Investment International Summit