Stephen Hayes is president and CEO of the Corporate Council on Africa.
A lot has been written about American business and American policy losing Africa. I, for one, have often said in my speeches that African countries will necessarily gravitate to those countries who are investing in their respective economies. I believe that to be largely true. Granted that there are other factors than only business investment in a country that determine relationships, including culture, language, religion, geopolitics, and even geography, but in developing countries especially, those countries who become the largest investors in developing economies will have a major advantage in future political alliances and the economic directions of the nations. Notice, for instance, how we often temper any criticism of China policy, which just also happens to be our largest creditor. Courage is being unafraid of your banker, or as Colin Powell was so fond of saying, "Money is a coward."
However, I don't really think that Africa is ours to win or lose. It is a continent of 54 nations for a starter, and each has its own way of being and seeing in the world. Africa tends to consume those who suffer under the illusion of winning and losing, but that is for another column. What is accurate to say is that U.S. investment and its market share in Africa have fallen behind other nations. If one takes oil out of the equation, we are far down the line in investment in Africa compared to other nations.
Nevertheless, despite having fallen behind China and other countries in investing and trading with Africa there are the intrepid among the U.S. corporate sector, including smaller and larger companies. There are also a few daring adventurers who are trying to find their fortune just as if they were potential miners in the gold rushes of old in America. Many are doing well and others are finding their ships dashed on the rocks of frustration. The race belongs to the dogged and not necessarily to the fleet.
The oil companies cannot really be classed as the intrepid. It is not bravery that determines where they go, but simply the supply of crude oil. They have little choice. Therefore, I will not include the oil companies, which do represent about 75 percent of all U.S. investment in Africa. The intrepid are those who have had limited experience in Africa and are not of the extractive industry, (not that you don't have to be brave to work in the extractive industry in the pits and on the rigs) but those businesses who are going where there are no apparent immediate riches to be had, except through hard work, and the development of their own product line. They create wealth, jobs, and opportunity.
The power sector is probably the one most open to U.S. business right now. There is no country in Africa that is meeting its current power needs, let along its future needs, including South Africa. Every country in Africa needs a far more developed power system if they are to develop more rapidly and effectively. Foremost among these companies would be General Electric. It is a company that is not only selling products to Africa but one that is investing its resources in the continent. Over the past two or so years they have established regional offices in East Africa, and continue to work West Africa with increasing fervor. The power sector is one that is open to large and small companies, so great the need.
As the power sector develops, IT will follow. Microsoft, Oracle, Cisco, and IBM are all beginning to explore Africa for opportunity and are increasing their stakes, and as large companies go, their suppliers, usually smaller companies will soon follow.
Infrastructure is also another area where American companies can do well, despite the contention that major infrastructure projects are being done primarily by the Chinese. A very good smaller company in New Jersey, called ACROW Bridges, a maker of prefab bridges, an ideal product for a developing nation, is doing very well in Africa and is expecting its share of the market to increase.
Doing business in Africa is still largely for the intrepid. It is full of challenges, but Africa does represent the world's largest untapped set of markets. American companies wishing to survive in the international arena need to include Africa in their portfolios.