U.S.-Africa Trade Poised for Tremendous Growth
(Commerce Department Africa director reviews trends, calls growth phenomenal)
Washington FILE   09/22/2009

By Charles W. Corey
Staff Writer

Washington — There is “great potential for tremendous growth” in trade between the United States and sub-Saharan Africa and both parties can benefit significantly from an enhanced and even closer trade and business partnership, says Kevin R. Boyd of the U.S. Department of Commerce. Boyd is director of the Commerce Department’s Office of Africa, which works to advance U.S. commercial interests in Africa.

In a September 16 interview, Boyd told America.gov, “U.S. total trade with sub-Saharan Africa is less than 3 percent of U.S. total trade with the world, so from that standpoint it is relatively small. However,” he quickly added, “last year, total U.S. exports to the region grew by 29 percent, so although it is coming from a comparatively low base, you are talking about tremendous growth, plus you have the potential for quite significant growth further on.”

Calling the 29 percent increase “phenomenal,” Boyd identified key growth areas for greater U.S.-Africa trade and business involvement: infrastructure, power generation, road building, housing and telecommunications, where he said there is a “tremendous need.”

Boyd said that telecommunications in Africa is one of the fastest-growing areas for business investment in the world. “You have some involvement from U.S. firms, but you could have significantly more,” he said.

Asked what sub-Saharan Africa gets out of greater trade and closer business ties with the United States, Boyd said: “Through so many different industries, when you are looking at U.S. firms, you are looking at global leaders in terms of the technology that they can bring to the table. Even more importantly, though, in sub-Saharan Africa, U.S. firms are global leaders in training their local workers, providing the transfer of technical know-how and creating a group of local managers.”

Boyd said U.S. companies, in contrast to many other multinational companies, often just bring in a small team of Americans, preferring to make a “small footprint” in terms of a U.S. presence and hiring and training local workers and managers.

“When you look at the entrepreneurial class here in the United States, quite a lot of those entrepreneurs were either middle managers or senior managers inside another firm. So for sub-Saharan Africa, if you have U.S. firms training some middle and senior-level managers, you are also helping to create an entrepreneurial class” that can work as a future growth engine for African business.

“An expanding entrepreneurial class will also burnish existing U.S.-Africa trade and business ties that can spawn local firms, which in turn can then supply those larger U.S. businesses. So I think U.S. companies really bring quite a lot to the table,” he said.

Surveying the African continent, Boyd said he sees opportunity. “For the past year and a half we have seen a downturn throughout the world, yet when you look at the latest projections from 2009 from the International Monetary Fund, fully half of the African economies are forecast to grow at least by 3 percent. … If I am a U.S. business taking a look at opportunities throughout the world, I kind of want to do business where you have growth, and here is a region where you have still got significant economic growth.”

Asked if he is optimistic that there will be a greater awareness of sub-Saharan Africa on the part of U.S. business, Boyd said he is “cautiously optimistic.” While there is some interest from U.S. firms, “quite frankly, you ought to have significantly more,” he said. He cited a report released recently by the U.S. Chamber of Commerce, entitled A Conversation Behind Closed Doors — Inside the Boardroom: How Corporate America Really Views Africa ( http://www.uschamber.com/assets/international/ABI_CEO_Suvey.pdf ) (PDF, 16 pages, 2.43MB). (Also see “African Countries Must Compete for Investment Capital ( http://www.america.gov/st/business-english/2009/June/20090610154236WCyeroC0.4695551.html ).”)

“So many of the [chief executive officers] in that report,” Boyd said, “agreed that, ‘Yes, we could be in Africa, should be in Africa, but we see problems in corruption, lack of infrastructure, plus we just don’t see the market.’”

Taking those concerns in sequence, Boyd said: “Yes, you do have significant problems with corruption in quite a few places on the continent, you cannot deny that. But if you look at one of the most commonly used measures of corruption, Transparency International’s Corruption Perceptions Index, you see corruption is pervasive in sub-Saharan Africa, quite a lot in the former Soviet Union and spread throughout many places in the world. So, yes, you have problems in sub-Saharan Africa, but you also have it in a lot of other places where U.S. companies are doing business.”

Boyd said the lack of infrastructure in Africa should be viewed as an opportunity. As to the market, Boyd said many of the countries in sub-Saharan Africa have at least 3 percent economic growth forecast for this year and that cannot be discounted.

Boyd, who was a participant at the eighth annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum (AGOA Forum) in Nairobi, Kenya, said one of the key things that came out of that forum was a realization by many of the African governments that instead of just looking at trading with the United States or focusing on some of the markets in Europe, they should consider greater regional trade. Boyd said there is “a lot of potential throughout the region” that is still to be realized.

Kenya’s minister for trade, Amos Kimunya, made that same point in his closing remarks at the forum, Boyd recalled, reminding his audience that countries throughout sub-Saharan Africa need to focus on knocking down trade and customs barriers within Africa to encourage greater trade throughout the region and worldwide.

(This is a product of the Bureau of International Information Programs, U.S. Department of State.  Web site: http://www.america.gov)