On October 15, 2014 during Global Diaspora Week, Assistant Secretary Linda Thomas-Greenfield from the U.S. Department of State - Bureau of African Affairs and the District of Columbia’s Office on African Affairs hosted a panel discussion and open forum for the African and African-American Diaspora Working Group entitled Investing in Africa: Why and How? Published below are the notes from the Assistant Secretary, republished with permission from her office.
The Notes of the Assistant Secretary
Big Picture Business and Investment Opportunities
Ambassador Greenfield said that the US-Africa Leaders Summit offered a platform that fostered the formation of new partnerships for investment in Africa. President Obama announced $7 billion in new financing to promote U.S. exports to and investments in Africa under the Doing Business In Africa Campaign (DBIA). U.S. companies announced new deals in clean energy, aviation, banking, and construction worth more than $14 billion, in addition to $12 billion in new commitments under the President’s Power Africa initiative from private sector partners, the World Bank, and the government of Sweden.
Taken together, these new commitments amount to more than $33 billion, supporting economic growth across Africa and tens of thousands of U.S. jobs. The DBIA Campaign is a whole-of-government effort to encourage U.S. commercial engagement in Africa by harnessing the resources of the U.S. government to assist businesses in identifying and seizing opportunities and to engage with members of the African Diaspora in the United States. Doing Business in Africa is not limited to the GEs, ExxonMobils, or Boeings.
The U.S. Government (USG) also announced new two-year commitments to support the DBIA Campaign including: a 20×20 Initiative to support a total of 20 trade and reverse trade missions by 2020, to promote U.S. industry engagement in Africa; Ex-Im Bank committed to financing up to $3 billion to support U.S. exports; MCC committed up to $2 billion in funding for new compacts in Africa; and USAID will launch the Africa Private Capital Group – a platform in South Africa to mobilize U.S., South African, and international private sector investment in key sectors to development, including agriculture, energy, trade, infrastructure, and health. These are the kinds of initiatives that should be covered in the media. Unfortunately news coverage about the Ebola virus is the main story about Africa today.
A.S. Thomas-Greenfield noted that “Ebola will not define Africa;” rather its growth and opportunities should. She told the audience that they can help keep Africa on the road to growth and prosperity through their networks, and by investing their resources. She said that Africa will continue to grow as long as investment and trade continues and accelerates. She said representatives of the diaspora frequently ask what the USG will do for them. There are things the Diaspora can do to support U.S. Africa policy priorities like the renewal of AGOA. AGOA’s extension is the bureau’s top priority, and the diaspora can help support it through its advocacy.
How to invest? What are the challenges? What resources are available for investors in the Diaspora?
Ngozi Nmezi, Executive Director of the D.C. Office on African Affairs, moderated the panel discussion and Q&A. She commenced with stating that the diaspora sends over $4 billion in remittances to the continent, and despite different perspectives on risk, the diaspora is more willing to invest in Africa. She then kicked-off the panel discussion with questions focused on ways the diaspora could seek investment opportunities on the continent.
Panelist Kelley Page Jibrell, a global consultant with expertise in Strategy & Collaboration Management, stated that potential investors need to visit African countries, speak with the locals, and search for the needs; then meld them with their own particular skill sets. Investors should also establish partnerships with local businesses and vendors that are seeking contractual deals. Overall, an effective investment strategy is to search for synergies.
Panelist Darren Moore, the executive director at Smith-Charles Associates, Inc. agreed, noting that an effective strategy is to transfer best practices and U.S. business models to the continent after identifying the gaps. Overall, he said, investors must try to avoid re-inventing the wheel and have an open mind. Investing on the continent is the wave of the future, and there’s currently a blank slate of opportunities in terms of what’s needed.
Panelists encouraged potential investors to use economic/commercial counselors located in the African missions in Washington, D.C. African commercial counselors will share their knowledge of cultural sensitivities that could affect marketing strategies and sales. However, panelist Jeffrey Jackson, Senior Private Sector Advisor in the Africa Bureau of the U.S. Agency for International Development, said that current congressional legislation prohibits a lot of what USAID and other government agencies such as OPIC, EXIM could fund.
Panelist Shelvin Longmire, US executive director of Afrique Expansion, Inc., highlighted that when applying for federally funded financing, investors must ensure that their business models emphasize mutual investment benefits to the U.S. (i.e. exports) and to the continent (i.e. job creation). There are a range of USG and other resources for investors within the Department of Commerce, USTR, the DC African Affairs office, the Corporate Council, the World Bank, the African Development Bank, and the Minority Business Development Agency (MBDA). Investors should also contact their local municipal governments as well such as the Prince George’s County African Trade Office for advice. There are also grants available such as the DSLBD STEP grant.
The session concluded with panelists discussing that the ease of doing business in Africa is relative to each investor’s experience and to the host country environment. Professor Jibrell noted that educating yourself on the local language, and norms/customs is key. She encouraged attendees to contact the U.S. Embassies’ economic/commercial officers for market information. In terms of U.S. media coverage of the Ebola outbreak, Shelvin Longmire encouraged the diaspora to support their local African owned media outlets, which will help counter the negative perceptions centered on the outbreak. Professor Jibrell also encouraged people to look at the Ebola outbreak as an investment opportunity for the science, technology, medicine, etc.