Download Strategies for Export Development: California Experience

International Trade Opportunities in
Africa
Myths & Realities of Doing Business in Africa
Monterrey, CA
Feb. 27th, 2009
Presentation by:
Richard A. F. Soyombo, Exec. Director
Center for International Trade Development,
(CITD) San Francisco, CA USA
(Hosted by Skyline College)
Objectives:
The Ctr. For Intl Trade Development (CITD)
The opportunities and challenges of doing
business in Africa
Future
Strategic Relationships
US Govt: EXIM Bank, OPIC, USAID,
US DOC, SBA
CA Government, SBDC
Why International Trade?
Increase sales volume
Access new markets and clientele
Source for new resources (raw materials,
mfg.)
Learn advanced/optional technical methods
Find new markets for declining or seasonal
products
Africa
AFRICA: The Facts
Continent not country
Complex
Abundant Opportunities
Why Africa
Virgin Market
After Latin America, where else?
Everything is needed!
Quick Primer on Africa!
Population:
GDP:
Inflation:
USA Assist:
Imports:
Exports:
25 – 26 million
$26b
6.5%
$50m - $55m p/yr.
$1.3b
$748.5m
Africa 101: Country Facts
Pop.
Exports
Imports
Infl. Rate
Ghana 19.7m 82m
210m
23.6%
Nigeria 133m
1.16b
14%
104b
S. Africa
42.7m 4.7b
2.9b
5.9%
Kenya
32m
3.7b
9.6%
Tanzania
36.6m 978m
1.7b
4.6%
1.2b
0.1%
Uganda 26.4m
2.5b
495m
Trade Overview:
Annual 10% increase in US exports
Enforcement of various international
laws
Used to be 100% aligned with UK
Asia (particularly, China) strong in
Africa
Gradual shift to US products for quality,
finance opportunities, etc.
Areas of Opportunities:
Privatization Projects
Mining/Drilling industry
machinery
technical know-how
Agriculture industry
wheat (including seeds)
fertilizer
food processing equip.
Areas of Opportunities
Oil industry
equipment
technical know-how
Construction industry
equipment
expertise
Computers
Areas Of Opportunities
Telecom equipment/service
Beauty products
Health industry
Tourism industry
Africa: trade influences
Small but stable economies
Favorable considerations abroad
Ready for USA prods/services.
AGOA
Principal market in each region
Trade Influences:
Increased Transparency
Growth in education/training
Fav. IMF/World Bank policies
Improved workforce
Reduction of poverty, etc.
Challenges:
Limited Purchasing power
Sub-standard credit facilities
Poor banking system
Challenges:
High cost of doing business
Protectionist laws
“Hot, sizzling weather”
Challenges:
Cultural differences
Different languages
Shifting market requirements
Export Challenges in Africa
Low level of industrialization
Lack of technical know-how
Limited finance capabilities
Low level of expertise in trade
High Inflation
Government intervention
Too many middle men
Unlimited risk exposure, etc.
Challenges to the US Executive
Goals and Objectives
Required Tools
Connecting the dots
Goals & Objectives
Identify all the reasons:
Management, Finance, etc.
Sell, Build, FDI, BOT, NGO?
What comes first?
Time Frame
Evaluation
Tools
Identify all available resources
Identify potential partners
Develop strategy for region/market
Identify key internal people with each
strategy or with each level of action
Old School of Thought
Nigeria
Ghana
USA
EU
ASIA
S. Africa
Uganda
New School of Thought
USA, EU
Nigeria
West/East
Africa
HUB
(Uganda?)
S. Africa
Uganda
Risk Management
Research for resources:
CITD
US DOC
Millennium Corporation
Training
Risk Management
Letters of Credit
Trade Insurance
Connecting the Dots………
Stability (Government, Political)
Vibrant Economy (stable, transparent)
Accessibility (systems of transportation, location)
Communication (lang. system of communications)
Infrastructure (finance, telecom, energy, govt.)
Business Culture
Cost
HIV?AIDS
Reduction of poverty, etc.
To be Successful:
Identify your area/industry
Match with 2-3 countries
Limited Govt. involvement
To be Successful:
Work with pre-qualified partners (CITD)
Recognize local land mines (CITD)
Due diligence (CITD, DOC)
To be Successful:
Solid business plan
Communication is KEY
Trust (bi-lateral)
Support
business support
technical/service support
Constant presence
To be Successful:
Familiarity with “what separates us”
Respect for local nuances of
business/trade
Patience
Applicable Strategies
Government Guarantees
Very capable finance institutions
Creative alternative financing (home
grown)
Strategic Relationships (internal &
external)
Applicable Strategies:
Education in the area of exporting/trade
Inter-agency linkages
Strategic Partnerships abroad
Private/Public Sectors’ Alliance
Modernized factors of production
Thank You!
Richard A.F. Soyombo
Tel: 650 553 9071
[email protected]