By Lauri Elliott
With the U.S. Federal Reserve and the International Monetary Fund (IMF) echoing the same news that the U.S. economy has weakened and that unemployment will remain high for a while, many are wondering where to turn.
Lauri Elliott, CEO of Conceptualee, Inc. based in Charlotte, North Carolina and author of Redefining Business in the New Africa: Shifting Strategies to be Successful says, “Americans continue to overlook Africa as an option to boost wealth and jobs in America because of the persisting mindsets formed about the continent over decades and centuries as a place of poverty, disease, and conflict. While these challenges still exist, they are on the decline and Africa has turned the page and has entered a new era.”
Regional growth in Sub-Saharan Africa has surpassed that in Asia in the last several years, according to The Economist. The emerging markets in which the West is pushing to enter – Brazil, India, and China – are knocking down the doors into Africa.
“The U.S. still sees Africa as a continent of poverty instead of prosperity for the most part – to its own detriment,” says Elliott. What she says is illustrated in a recent article in the Wall Street Journal, U.S. Companies Race to Catch Up in African Markets. The CEO of U.S.-based Cummins International, Tim Solso, admitted that he came to the realization that his Chinese counterparts were beating him.
“Large U.S. companies have been in Africa for a long time for its natural resources, particularly oil with major producers like Nigeria and Angola. Others like Coca-Cola have also fared well, but by and large U.S. companies are not keeping pace with those from other countries in taking advantage of opportunities on the continent,” adds Elliott. “However, a good sign is Walmart’s recent acquisition of consumer goods company, Massmart, in South Africa that has operations in over ten African countries. If Walmart, The Gap, and other major U.S. retailers continue to enter Africa markets, hopefully other American firms in diverse sectors will realize there is money to be made.”
While natural resources continue to be a major draw for foreign investment, the large, growing population of 1 billion is another natural asset which draws investment and business. In fact, this
population will surpass India and China by 2025 with current projections. And, non-oil revenues surpass those of oil revenues when you look at the continent as a whole.
“We are now seeing the start of Africa’s “Baby Boomer” generation – not only a large population, but a growing middle class. Remember the effect the Baby Boomer generation had on driving the U.S. economy. If Africa keeps its current trajectory, this new generation will do the same for it and maybe even more,” remarks Elliott. To tap the growing local consumer markets, China is developing five key special economic zones on
the continent. “Don’t think China’s only intention is to tap the local markets. The cost of labor and manufacturing in China is rising, so that it is no longer a low cost alternative. Expect China to export
products from Africa into China and other markets including the U.S.,” indicates Elliott.
While the opportunities in Africa, a continent with 54 countries, can be mind blowing, so can the process to get a business going on the continent. “There are actually many pathways that make it easier, more cost effective, and efficient to enter African markets. Some of these include locating operations in and looking at consumer markets around large urban centers and development corridors, as well as placing your operations in a special economic zone which offers solid infrastructure, strong business support, tax incentives, etc.,” suggests Elliott.
“We recommend focusing on creating a small, but significant footprint in one location that will give you the experience of business in Africa, develop your reputation, and give you access to a sufficient client base while at the same time placing you in a good position to scale nationally, regionally, and across the continent,” offers Elliott. Elliott, Hartmut Sieper, and Nissi Ekpott, themselves doing business in Africa, present more insights in their book, Redefining Business in the New Africa: Shifting Strategies to be Successful.
Elliott sums up the picture by saying, “The opportunities and business environment in Africa currently reflect China as it was 20 or 30 years ago. Now look at China. It is the second largest economy in the world, having recently passed Germany and Japan. It is expected to replace the U.S. as the number one economy by 2016. While Africa may or may not reach this pinnacle, those who enter now have a great opportunity to enter a market on the upside not on the downside.”
But Africa is not just an opportunity for businesses to make money overseas while eliminating jobs in the U.S. “As we are creating pathways for business and investment between the U.S. and Africa, we have found many opportunities that will create new business in Africa but also revitalize entrepreneurial, as well as small and medium, enterprises that have been hard hit with the global economic crisis. We don’t believe it has to be a win-lose for key stakeholders. Our approach is about creating opportunities so that both America and Africa benefit,” emphasizes Elliott.
For further information on Redefining Business in the New Africa, go to www.redefining-business-inthe-new-africa.com. For resources, nformation, and insights on doing business and investing in Africa, go to www.afribiz.info. Here you can also read featured articles by and listen to radio interviews with experts, offering both strategic and practical insights.
About Lauri Elliott
Lauri Elliott (www.lauri-elliott.com) is a strategist with over 25 years of business experience, specializing in global business, innovation, technology, and new ventures and start-ups. As a noted new media broadcaster, author, speaker, and consultant, she helps small and medium-sized enterprises (SMEs) and entrepreneurs bring life and profit to business ideas in tough, turbulent business environments around the globe, with a particular focus on emerging markets, including Africa.
Ms. Elliott is the founder of Conceptualee, Inc., under which she created the brands Afribiz™ (Afribiz.net ) and GlobalBizconcierge™ (Globalbizconcierge.com – launching 2012). As the Director of Afribiz™ Media, which includes Afribiz.info and Africathegoodnews.com, Lauri has developed a solid reputation as a journalist, broadcaster, and media personality. She is the primary host of Afribiz.fm™, a regular radio show about doing business and investing in Africa.
Lauri has authored several books