Doing Business in Africa

At no time in history has the climate in Africa been more favorable for U.S. companies to do business. Africa is the second largest continent in the world and offers the combined potential of 750 million people, vast natural resources, and untapped markets. The continent’s invigorated commitment to democracy and economic modernization makes it even more appealing.

Two-way trade between the US and Africa totaled $20 billion in 1999. This is larger than trade with the former Soviet Union and the Eastern European countries combined. An estimated 100,000 US jobs are tied to Africa and with the passage of the Africa Growth and Opportunity Act (AGOA), this number is likely to increase considerably.

African governments are also restructuring and privatizing state-run industries, and looking for partnerships with US firms on infrastructure projects. African agribusiness is being revitalized. African airlines are buying new airplanes. Telecommunications systems are being revamped. New ports, railways, airports, and roads are being constructed. African central banks are overhauling their financial institutions.

Seeing these opportunities and others, the US Export-Import Bank is set to finance $1 billion in US trade with African countries in 2000 after supporting only $50 million in 1998. In June 2000, the US Overseas Private Investment Corporation (OPIC) made its largest loan ever to a project in sub-Saharan Africa, a $173 million guaranty for the construction of a methanol plant in Equatorial Guinea. The Small Business Administration has taken an active role in promoting American small business ventures with Africa.

About the Corporate Council on Africa.