Lack of Information Halting Investment in Africa

by Developed Africa 9. July 2013 09:00

Developed Africa is designed to allow clear, concise information about commercial Opportunities in Africa. A new survey by FTI Consulting suggests that such a service is absolutely vital:

...on the eve of President Obama’s visit to Africa to bolster U.S. - African trade and political ties, eight of every ten, or 80 percent of institutional investors surveyed in the United States are largely unaware of investment opportunities on the continent."

As Obama's visit to Africa has now ended, some commentators have recognised the lack of attention paid to the continent by investors and may seek to heed Obama's call to "come on down" to Africa. As highlighted by FTI Consulting, their research suggests that communication might be the defining issue for investment in Africa,

Africa has the potential to be a destination of choice for U.S. institutional investors given its abundant natural resources, eco-tourism potential and favourable demographics. Many African countries already are capitalising on their various assets and have been identified as high-growth geographies by institutional investors. However, it is critical to sustained economic growth that key African messages are continually heard, expanded and understood so investors are aware of the investment opportunities in during a time of great global trade competition. Our research showed there still is work to be done in this regard.”

While there are some good examples of African business reporting in the mainstream press, services like Developed Africa are an exciting, interactive way of combating the issue of communicating business opportunities from African based commercial entities.

Categories: Communication | Information | Investment | Trade

Obama in Africa: An opportunity overlooked too long

by Developed Africa 26. June 2013 09:00

Obama's upcoming trip to Senegal, Tanzaia and South Africa has garnered a fair amount of criticim in the USA due to its projected costs of $60 to $100 million. But this high cost has masked the massive potential both in terms of international relations and, more importantly, in the vast potential commercial returns of the continent. Obama has received a fair amount of criticism for lack of engagement with Africa in the last 5 years - as highlighted by the video above - which has allowed China to make huge political and commercial gains in their absence.

Harvard Business Review published an article on the trip highlighting these benefits:

Africa ranks second—behind emerging Asia—as the fastest growing region of the world. The IMF forecasts thatSub-Saharan Africa will grow at a rate of 5.4% this year, about 50% faster than Latin America, and infinitely more than Europe, which is currently expected to grow not at all or even contract. Also, Africa's growth is not from a small base. Africa today is a $2 trillion economy, roughly the same as Brazil or India (where few would say a presidential visit is wasted)"

An article on Bloomberg Businessweek  further stressed the potential for growth in economic cooperation with fast growing African states:

U.S. foreign direct investment to the whole region in 2011 amounted to just $3.1 billion, less than 10 percent of total FDI to Africa that year. The latest U.S. Trade Representative statistics suggest the stock of U.S. FDI in Tanzania was a pathetic $21 million. U.S. trade with the region as a whole was worth $94 billion—compared with $127 billion in China-Africa trade. America’s comparatively low economic engagement means the U.S. is missing out on trade and investment opportunities in a small but dynamic part of the global economy."

Clearly there is pressure from inside the USA and from African states for new ventures that Obama has so far largely ignored - he has previously made just one 24 hour visit to Ghana in 2009. This trip was low on any real substance and saw his administration lose favour for refusing to engage properly. This trip is Obama's chance to remedy that.

For more on potential trade opportunities between the USA and Africa take a look at this brief by the Center for Global Development.

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Categories: Foreign Direct Investment