Are investors missing out on sub-Sahara Africa?

Africa's improvements have created

thriving markets.

US firms should enter this

last great investment frontier.

Here's some good,

if counterintuitive, news for American investors.

Normally, by the time an investment tip

makes its way into a newspaper,

conventional wisdom says the money

is already off the table.

Not so in the case of sub-Saharan Africa.

American investors and companies are

overlooking an investment opportunity

in plain sight.

And the smart money will climb aboard

before the economic tide rises.

The rest will miss a fast-moving boat.

Market-friendly reforms in Africa are

happening at a faster pace in this decade

than at any time since most African nations

achieved independence in the

latter half of the 20th century.

They reflect a serious and sustained

commitment by African governments

to meet the needs of local entrepreneurs

as well as foreign investors – because

they recognize that the fastest path

to prosperity for their people is

through investment and

self-sustaining economic growth.

Western media typically cast

sub-Saharan Africa in terms of conflict,

corruption, AIDS, and poverty – and

the present food and energy picture

understandably dominates the news.

But read behind the headlines and

you can see some of the most attractive

investment environments in the world.

Foreign direct investment from all

countries into sub-Saharan Africa grew

by 60 percent in 2007, to nearly $27 billion.

Total private capital flows have grown

eightfold since 2002.

Investment-led growth in Africa will enable

that continent to contribute to the recovery

from the global recession affecting

individual Americans as well as

improving the lives of Africans.

The opportunity isn't going unnoticed

by investors in other parts of the world.

China is poised to overtake the US in

pace of investment in Africa.

Kuwaiti interests purchased Africa's Celtel

for $3.4 billion.

Moscow investment bank Renaissance Capital

announced plans to double its investments

in Africa to at least $1 billion.

French firm SoSuMar is building

a sugar-processing factory in Mali,

where they expect an internal rate

of return of nearly 58 percent.

The territory in most business sectors

is wide-open. Prime areas include

agriculture, healthcare, infrastructure,

information technology, tourism,

telecommunications, and textiles.

Are US investors aware of striking changes

in Africa?

Sweeping reforms have been launched

in 40 African nations since

the 1990s: pro-business policies,

strong judicial systems, better standards,

respect for intellectual property rights.

Debt relief has markedly improved

Africa's credit worthiness.

Monetary policies have pushed inflation

down from the 19 percent average of

the 1980s, to 7 to 8 percent today.

Fiscal policies have turned country budget

deficits into an average budget surplus

of 2 percent of Africa's gross domestic product.

Despite the headlines in Sudan, Zimbabwe,

and Congo, the great majority of

African countries enjoy thriving

democracies and stability,

with governments that have earned

public confidence through audited elections.

Last year more than 54 million Africans

voted in 19 peaceful presidential

and parliamentary contests.

The result?

Real economic growth in 2 out of

5 sub-Saharan countries was triple

that of the US economy last year,

on a pace that rivals that

of Southeast Asia in 1980.

African economies from Senegal to Benin

to the Democratic Republic of Congo

are more diversified.

Growth in the region is expected

to hit 6.5 percent this year.

To be sure, there are still serious risks,

challenges, and constraints

for smart money to navigate: shortages

of electricity and skilled talent; countries

where reforms are fragile

and postconflict governments less secure.

Successful investors and entrepreneurs

enter these markets aware that differences

in culture and shortages

of investor-ready information

and institutional capacity put

a premium on patience and collaboration.

There is no substitute for due diligence.

But help is available.

By working with USAID, American firms

can help shape programs that serve

both the aspirations of Africa's citizens

and the interests of investors.

Most African governments have

streamlined business registrations

and launched one-stop shops

to help potential investors.

The Overseas Private Investment

Corporation makes loans of

up to $250 million for projects

in emerging markets.

The Millennium Challenge Corporation

provides powerful incentives to countries

promoting good governance.

And for US exporters, the Trade

Information Center offers targeted

country and market research

as well as counseling

and export assistance centers.

This growth story is in its first chapter,

much as Asia's was three decades ago,

with all of the attendant risks

and potential rewards.

Investors worldwide are aggressively

entering and operating in sub-Saharan Africa

as the last great investment frontier.

American firms should take a much closer look.

Alonzo Fulgham is serving as

acting administrator for the US Agency

for International Development (USAID)

Link here

             J-L K.
Procurement Consultant
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