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US Investment in Africa
Emphasis on Sub-Saharan Africa
Anthonie Lombard PhD MBA
All of us share a common vision for the
future of Africa. We look to the day
when prosperity for Africa is built
through trade and markets.
— President George W. Bush to delegates at
the African Growth and Opportunity Forum in
Mauritius, January 15, 2003
The African Growth Opportunities ACT
(AGOA)
Advantages
•Manufacturing in Africa becomes
more attractive due to duty
benefits;
• Sourcing finished products also
attractive
• Selling to firms producing for the
US
• More U.S. government support
available for investment or
exports.
Product Category
Examples
•Footwear
•Machinery
• Apparel
• Vehicles
• Fruits and nuts
• Prepared vegetables
• Leather products
• Cut flowers
• Prepared seafood
• etc.
Economic Growth Forecasts for
Sub Saharan Africa: A Rising Tide?
• 4% average growth in GDP
between 2000 – 2005, 5.6%
by 2006
• 22/48 SSA Countries
achieved above 4% growth
in GDP 2000-2005
• Real GDP 2-3% above world
averages
Economic Growth Forecasts for Sub
Saharan Africa: A Base for Growth?
• Requires 25% of GDP in Investment vs actuals
of 19%
• Foreign Direct Investment at 25% in 1970 vs
5% in 2004
• Per capita GDP
– $575 2005
– $590 1980
US Trade with Sub Saharan Africa (SSA)
U.S. Investment in Sub-Saharan Africa
•At year-end 2006, the stock of U.S. direct investment in subSaharan Africa was $14 billion, or less than 1% of the $2,380
billion in total U.S. direct investment abroad.
• U.S. capital outflows to Africa (including North Africa)
doubled from 2005 to 2006, from about $1 billion to $2 billion,
though they are still below the 2003 peak of $2.7 billion.
• U.S. investment in Africa is heavily toward natural resources:
47% of total U.S. investment in Africa is in the mining sector
(including petroleum)
US Trade and Investment in Africa
A New Dawn?
• What should the focus areas be?
• What is the role of technology transfer?
• What should the role of South Africa be?
ENERGY FACTS
• World population
without electricity: 1.7
billion
• Africa's proportion:
one-third
• Per capita electricity
consumption Africa
(2004): 494.9 kWh
• Per capita Canada
(2004): 15,744 kWh
Rate of Change
Global Macro Trend Positioning
Energy $
Volatility
Energy
Supply /
Demand
China
Information
Technology
Food Safety
Sustainability
Water
Climate
Change
India
Impact Lifecycle
Water Shortage
Worldwide Water Stress Indicator

Already about one-third of the world's population lives in countries suffering from
moderate-to-high water stress
Source: WaterGap 2.0 – December 1999.
Delivering on the Value Promise Through Innovation – A
Generic Model
Business Units
Value Creation
Technology Requisition
Fuzzy Front End
15
Existing
Application
1
Existing
Application
2
New
Application 1
Value Delivery
The Role of South Africa
Thank you!
AGOA and Trade reference
http://fpc.state.gov/documents/organization/112461.pdf