US Investment in Africa Emphasis on Sub-Saharan Africa

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US Investment in AfricaEmphasis on Sub-Saharan
Africa

• Anthonie Lombard PhD MBA

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All of us share a common vision for the future of
Africa. We look to the day when prosperity for
Africa is built through trade and markets.
President George W. Bush to delegates at the
African Growth and Opportunity Forum in
Mauritius, January 15, 2003
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The African Growth Opportunities ACT (AGOA)

• Advantages
• Manufacturing in Africa becomes more attractive
  due to duty benefits
• Sourcing finished products also attractive
• Selling to firms producing for the US
• More U.S. government support available for
  investment or exports.

• Product Category Examples
• Footwear
• Machinery
• Apparel
• Vehicles
• Fruits and nuts
• Prepared vegetables
• Leather products
• Cut flowers
• Prepared seafood
• etc.

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Economic Growth Forecasts for Sub Saharan Africa
A Rising Tide?

• 4 average growth in GDP between 2000 2005,
  5.6 by 2006
• 22/48 SSA Countries achieved above 4 growth in
  GDP 2000-2005
• Real GDP 2-3 above world averages

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Economic Growth Forecasts for Sub Saharan Africa
A Base for Growth?

• Requires 25 of GDP in Investment vs actuals of
  19
• Foreign Direct Investment at 25 in 1970 vs 5 in
  2004
• Per capita GDP
• 575 2005
• 590 1980

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US Trade with Sub Saharan Africa (SSA)
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U.S. Investment in Sub-Saharan Africa

• At year-end 2006, the stock of U.S. direct
  investment in sub-Saharan Africa was 14 billion,
  or less than 1 of the 2,380 billion in total
  U.S. direct investment abroad.
• U.S. capital outflows to Africa (including North
  Africa) doubled from 2005 to 2006, from about 1
  billion to 2 billion, though they are still
  below the 2003 peak of 2.7 billion.
• U.S. investment in Africa is heavily toward
  natural resources 47 of total U.S. investment
  in Africa is in the mining sector (including
  petroleum)

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US Trade and Investment in AfricaA New Dawn?

• What should the focus areas be?
• What is the role of technology transfer?
• What should the role of South Africa be?

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• ENERGY FACTS
• World population without electricity 1.7
  billion
• Africa's proportion one-third
• Per capita electricity consumption Africa
  (2004) 494.9 kWh
• Per capita Canada (2004) 15,744 kWh

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Global Macro Trend Positioning
Energy Supply / Demand
Rate of Change
Information Technology
Energy Volatility
China
Food Safety
Sustainability
Water
Climate Change
India
Impact Lifecycle
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Water Shortage Worldwide Water Stress Indicator

• Already about one-third of the world's population
  lives in countries suffering from
  moderate-to-high water stress

Source WaterGap 2.0 December 1999.
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Delivering on the Value Promise Through
Innovation A Generic Model
Business Units
Fuzzy Front End
Technology Requisition
Value Creation
Existing Application 1
Existing Application 2
New Application 1
Value Delivery
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The Role of South Africa
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Thank you!

• AGOA and Trade referencehttp//fpc.state.gov/do
  cuments/organization/112461.pdf