Opportunities in Emerging Africa
By Wiley A. Hall III
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| Robert Perry, Corporate Council on Africa |
David Seegobin, NSBE–AE Region I International Chair |
Roger R. Blunt, Essex Construction, LLC |
The barriers to doing business in sub-Saharan Africa are well-documented: the corruption, the lack of critical infrastructure, a seemingly endless cycle of regional conflicts and violence.
Ah, but the opportunities! The opportunities for successful business ventures lie hidden there just below the surface, like an undiscovered mother lode just waiting to be tapped, says Robert Perry, vice president for international programs at the Corporate Council on Africa. The council works to create and strengthen commercial ties between the United States and Africa.
“The risks are real, and they’re easy to see,” says Perry, speaking from CCA’s headquarters in Washington, D.C. “The rewards are a little more difficult. But those companies with the vision to see them are doing quite well.”
The perception of Africa is quite different from the reality, according to those who have done business there. Far from being a continent immersed in total chaos and poverty, some find it far more constructive to think of Africa as 53 economically and culturally diverse countries, with growing regions of stability and a burgeoning middle class.
Squaring the Deal
Africa’s emergence opens new opportunities for NSBE members, who may feel a special affinity for their ancestral homeland, says David Seegobin, an electrical engineer from New York who serves on NSBE’s Region I Alumni Executive Board.
“But I define ‘success’ a bit differently,” he says. “I’m not just talking about going over there to make a profit. U.S. companies may be doing a lot of business over there, but they aren’t necessarily helping to make the continent self-sufficient. That’s where we maybe can make a difference.”
“The education piece is huge,” Seegobin adds. “Our college and university system could be a tremendous resource for technical schools in places like Ghana and Nigeria. We could donate the latest textbooks and supplies, circuit boards and microchips for lab work. We could make use of Skype technology for face-to-face workshops.”
Chasing China
The opportunities in emerging Africa were highlighted this summer by The Wall Street Journal. In a June story, “U.S. Companies Race to Catch Up in Africa,” the paper described how a growing number of U.S. firms were looking to strengthen their foothold on the continent, only to find that in many cases, China — itself an emerging economy — had gotten there first. While U.S. companies have been focused on building relationships in Asia and Latin America, the Journal reported, Chinese have aggressively promoted trade and investment, building their brand throughout the African continent. Caterpillar Inc., IBM Corporation, General Electric Company, The Dow Chemical Company, Harley-Davidson, Inc. and Wal-Mart Stores, Inc. are some of the companies seeking to develop markets there.
Perry says the global economic downturn has encouraged companies to look for new markets. Now, those companies are seeing in Africa what the Chinese saw two decades ago: a mineral-rich continent with a rapidly growing middle class; a middle class with disposable income and a hunger for products to spend it on.
With this in mind, Walmart, the world’s largest retailer, moved last year to acquire a 51 percent stake in the South African discount retailer Massmart for more than $2.4 billion. With the deal, which finally gained approval in South African courts in May, Walmart assumed control of a well-known chain with nearly 300 stores in South Africa and a dozen other African countries.
Satish Jayaram is Power Generation leader for Africa at Cummins Incorporated, one of the companies described in the Journal report as making a major push onto the continent. He’s helping the company develop its Africa strategy. He says Cummins sees Africa as “the new China,” except he believes emerging Africa has the potential to grow even faster than China, thanks to countries such as South Africa and Egypt that have diversified economies and countries such as Ghana, Kenya and Senegal that are poised to make the transition to having strong, diversified economies.
Bring Your Own Business
Africa’s potential for growth may offer big opportunities for African-American professionals, but as entrepreneurs, rather than as employees.
Participants at a trade conference in Las Vegas early this year were told there were opportunities in key industries such as banking and finance, agriculture, telecommunications, travel and tourism, IT, construction and development, and health and education.
Roger R. Blunt, president and CEO of Essex Construction, LLC in Columbia, Md., sees a real opportunity for minority-owned engineering and architectural firms to form partnerships with local concerns in Africa, to assist in the building industry and the establishment of power and technology grids.
A West Point graduate with degrees in civil and nuclear engineering from the Massachusetts Institute of Technology, the retired Army major general is pursuing a number of collaborative projects in West Africa, particularly in Ghana. He says his overseas partners hold U.S. technology, skills and standards in high regard — a reputation that he says his Chinese competitors have yet to match.
“The Chinese have an extraction mentality in Africa,” says Blunt. “A U.S. company that cares about building capacity, value, can be quite successful. This is particularly true for black-owned companies with the skills. I have found that Africans would like to see members of the Diaspora come back.”
Wiley A. Hall III is a freelance journalist from Baltimore, Md.
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