12 Aug Africa Offers U.S. Firms Compelling Trade, Investment OpportunityEmail This Post
According to Standard Bank Africa’s rapid economic growth, fast growing population and increasing urbanization present compelling trade and investment opportunities for US multinationals. Economic growth in sub-Saharan Africa has exceeded 5% a year for more than a decade, giving the continent a 4.1 % share of global gross domestic product (GDP) up from 3.4 % in 2000.
It is projected that by 2050 one quarter of the world’s population will reside in Africa with at least 60 per cent of them living in urban centers. 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 US plan to revitalize its commercial and trade links with Africa couldn’t come at a more opportune time.
In 2013, Foreign Direct Investment (FDI) to Africa increased by 9.6 per cent to an estimated $56.6 billion, representing 5.7 per cent of global FDI. Experts have forecasted FDI to exceed $60 billion in 2014. Total foreign inflows to the continent reached $186 billion in 2013, and are expected to top $200 billion in 2014. Emerging economies are seizing the African opportunity. In 1992 China, India and Brazil accounted for just three per cent of Africa’s global trade compared to 25 per cent today. A wide range of firms from India, Brazil and South Africa are also expanding quickly in Africa, often with strong support from their governments. Current statistics shows that US firms are also increasingly interested in the commercial opportunities in Africa. Major Private Equity firms have launched Africa-focused funds valued in the hundreds of millions. Leading US technology companies are investing in new ventures and start-ups across the continent.