Africa offers US firms a compelling trade and investment opportunity

[Standard Bank Team]

Africa offers multinationals in the United States a compelling trade and investment opportunity thanks to the rapid economic growth rates being experienced across the continent along with burgeoning population growth and increasing urbanization.

Economic growth in sub-Saharan Africa has exceeded 5% a year for more than a decade now giving the continent a 4.1% share of global gross domestic product (GDP), up from 3.4% in 2000. By 2050 one in four of the world’s population will reside in Africa with at least 60% of the continent’s people living in urban centres.

Trade with African economies and investment in Africa offer big rewards but it requires sound local knowledge, strong local partnerships, and a long-term view.

In that sense the USA’s plan to revitalise its commercial and trade links with Africa couldn’t come at a more opportune time.”

The renewed US interest in Africa is embodied by President Barack Obama’s Power Africa Initiative which was launched last year and aims to double access to power in six partner countries in sub-Saharan Africa: Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania. The US government has committed more than US$7-billion in financial support and loan guarantees to the project over the next five years. That commitment has been doubled by the almost 30 private sector partners who have pledged US$14.7 billion in project finance through direct loans, guarantee facilities, and equity investments for Power Africa.

Nevertheless, the USA still has some catching up to do. While the USA is a major investor in Africa - particularly in information technology, manufacturing, resources, power, and financial services - trade flows have advanced on a much gentler trajectory.

While the USA may be arriving late to this party, the world’s biggest economy still offers unrivalled commercial and industrial excellence in many key fields. The vibrancy of US multinationals, with their proven track records, industrial processes, established retail networks and brands, are of immense attraction to the ongoing consumer revolution taking place across Africa.

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