While the U.S. economy continues to slump and company stocks plunge, trade and development experts are advising U.S. businesses of all sizes to start investing in Africa, a continent with many opportunities and growth potential.
A promotion for an upcoming October Washington U.S.-Africa business meeting organized by the Corporate Council on Africa makes a convincing sales pitch.
"Thousands of untapped markets, a vibrant and diverse continent with one of the most promising business environments in the world today, the continent of Africa is a place where smart companies invest."
Far away from Africa, in the central U.S. state of Indiana, in the city of Columbus, a representative for the Cummins engine-making company gives a tour of headquarters.
"We are inside the Cummins corporate office," said the representative. "Look at the wonderful sculpture that they have here, made of, what else would one except, engine parts for diesel engines."
The company recently decided to put more focus on Africa, especially in Nigeria where it is trying to become a leader in selling generators.
Another company looking more and more at Nigeria is the family-owned Louisiana-based dredging equipment company DSC Dredge. The company used to deal with Africa only through unsolicited emails but is now considering opening an office in Lagos.
The Africa expert at the Washington-based Atlantic Council J. Peter Pham says these companies know what they are doing.
"Certainly Africa is open for business and especially if companies are willing to invest for the long term I think there is a very healthy rate of return to be had in Africa," said Pham.
African economies are expected to grow on average by 6 to 7 percent in the coming years. Among countries with the most growth potential, there is new oil producer Ghana, with a national economy expected to grow over 14 percent this year.
Chinese companies, many with state backing or their government's help, have been very aggressive in Africa in recent years.
The International Monetary Fund says China's exports to Africa last year totaled $54 billion, while U.S. exports were at a much lower $21 billion.
Many major U.S. companies have had a foothold in Africa for years, led by soft drink maker Coca-Cola, and more recently other major U.S. companies are following, like Microsoft, IBM, Google, Procter and Gamble, General Electric, Boeing, Harley-Davidson, Wal-Mart and Caterpillar, to name a few. Companies with oil and mining interests have had a steady presence as well.
Development experts say smaller companies which have something to offer for Africa's growing middle class and infrastructure needs should also take a close look. A former U.S. ambassador in Africa, David Shinn, says the U.S. government should do more to help nervous companies take their first steps.
"Part of it is cajoling the American private sector, having perhaps a major conference led by the Secretary of State or the Secretary of Commerce or the president even to bring in potential investors and encouraging them to go to Africa," said Shinn.
J. Peter Pham from the Atlantic Council says U.S. entrepreneurs unfamiliar with the continent have mostly negative perceptions.
"Often the news coverage out of Africa is all about disasters, natural or human and other calamities, and not about the opportunities for economic growth for actually for profit in a win-win situation," he said.
Increasing tax incentives, as well as the number of commercial staff members at U.S. embassies which has dropped in recent years, are some of the ideas being proposed by trade experts to help smaller U.S. companies better tackle Africa as a business opportunity.
More US Businesses Encouraged to Look At Africa's Potential
