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International Trade Opportunities in Africa

International Trade Opportunities in Africa . Myths & Realities of Doing Business in Africa Monterrey, CA Feb. 27 th , 2009. Presentation by:. Richard A. F. Soyombo, Exec. Director Center for International Trade Development, (CITD) San Francisco, CA USA (Hosted by Skyline College).

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International Trade Opportunities in Africa

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  1. International Trade Opportunities in Africa Myths & Realities of Doing Business in Africa Monterrey, CA Feb. 27th, 2009

  2. Presentation by: Richard A. F. Soyombo, Exec. Director Center for International Trade Development, (CITD) San Francisco, CA USA (Hosted by Skyline College)

  3. Objectives: • The Ctr. For Intl Trade Development (CITD) • The opportunities and challenges of doing business in Africa • Future

  4. Strategic Relationships • US Govt: EXIM Bank, OPIC, USAID, US DOC, SBA • CA Government, SBDC

  5. Why International Trade? • Increase sales volume • Access new markets and clientele • Source for new resources (raw materials, mfg.) • Learn advanced/optional technical methods • Find new markets for declining or seasonal products

  6. Africa

  7. AFRICA: The Facts • Continent not country • Complex • Abundant Opportunities

  8. Why Africa • Virgin Market • After Latin America, where else? • Everything is needed!

  9. Quick Primer on Africa! • Population: 25 – 26 million • GDP: $26b • Inflation: 6.5% • USA Assist: $50m - $55m p/yr. • Imports: $1.3b • Exports: $748.5m

  10. Africa 101: Country FactsPop. Exports Imports Infl. Rate

  11. Trade Overview: • Annual 10% increase in US exports • Enforcement of various international laws • Used to be 100% aligned with UK • Asia (particularly, China) strong in Africa • Gradual shift to US products for quality, finance opportunities, etc.

  12. Areas of Opportunities: • Privatization Projects • Mining/Drilling industry machinery technical know-how • Agriculture industry wheat (including seeds) fertilizer food processing equip.

  13. Areas of Opportunities • Oil industry equipment technical know-how Construction industry equipment expertise • Computers

  14. Areas Of Opportunities • Telecom equipment/service • Beauty products • Health industry • Tourism industry

  15. Africa: trade influences • Small but stable economies • Favorable considerations abroad • Ready for USA prods/services. • AGOA • Principal market in each region

  16. Trade Influences: • Increased Transparency • Growth in education/training • Fav. IMF/World Bank policies • Improved workforce • Reduction of poverty, etc.

  17. Challenges: • Limited Purchasing power • Sub-standard credit facilities • Poor banking system

  18. Challenges: • High cost of doing business • Protectionist laws • “Hot, sizzling weather”

  19. Challenges: • Cultural differences • Different languages • Shifting market requirements

  20. Export Challenges in Africa • Low level of industrialization • Lack of technical know-how • Limited finance capabilities • Low level of expertise in trade • High Inflation • Government intervention • Too many middle men • Unlimited risk exposure, etc.

  21. Challenges to the US Executive • Goals and Objectives • Required Tools • Connecting the dots

  22. Goals & Objectives • Identify all the reasons: Management, Finance, etc. • Sell, Build, FDI, BOT, NGO? • What comes first? • Time Frame • Evaluation

  23. Tools • Identify all available resources • Identify potential partners • Develop strategy for region/market • Identify key internal people with each strategy or with each level of action

  24. Old School of Thought Nigeria Ghana USA EU ASIA S. Africa Uganda

  25. New School of Thought USA, EU Nigeria West/East Africa HUB (Uganda?) S. Africa Uganda

  26. Risk Management • Research for resources: CITD US DOC Millennium Corporation • Training

  27. Risk Management • Letters of Credit • Trade Insurance

  28. Connecting the Dots……… • Stability (Government, Political) • Vibrant Economy (stable, transparent) • Accessibility (systems of transportation, location) • Communication (lang. system of communications) • Infrastructure (finance, telecom, energy, govt.) • Business Culture • Cost • HIV?AIDS • Reduction of poverty, etc.

  29. To be Successful: • Identify your area/industry • Match with 2-3 countries • Limited Govt. involvement

  30. To be Successful: • Work with pre-qualified partners (CITD) • Recognize local land mines (CITD) • Due diligence (CITD, DOC)

  31. To be Successful: • Solid business plan • Communication is KEY • Trust (bi-lateral) • Support business support technical/service support • Constant presence

  32. To be Successful: • Familiarity with “what separates us” • Respect for local nuances of business/trade • Patience

  33. Applicable Strategies • Government Guarantees • Very capable finance institutions • Creative alternative financing (home grown) • Strategic Relationships (internal & external)

  34. Applicable Strategies: • Education in the area of exporting/trade • Inter-agency linkages • Strategic Partnerships abroad • Private/Public Sectors’ Alliance • Modernized factors of production

  35. Thank You! Richard A.F. Soyombo Tel: 650 553 9071 Soyombo@bayareacitd.com

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