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African Business Environment- the Success Stories.

African Business Environment- the Success Stories. UNIVERSITY OF FLORIDA, GAINESVILLE January 18 th 2008 PRESENTATION BY BEATRICE SELOTLEGENG. Presentation Topics. Introduction Ohio University: African Studies Program African Business Outreach (ABO) International Business Overview

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African Business Environment- the Success Stories.

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  1. African Business Environment- the Success Stories. UNIVERSITY OF FLORIDA, GAINESVILLE January 18th 2008 PRESENTATION BY BEATRICE SELOTLEGENG

  2. Presentation Topics • Introduction • Ohio University: African Studies Program • African Business Outreach (ABO) • International Business Overview • African Business Environment • Trade with United States • Challenges and Opportunities • Success Stories: Selected Countries

  3. Introduction • Center for international Studies • Focus for Ohio University’s international involvement • Coordinates teaching, research and publishing activities in international studies • Offers an interdisciplinary Master of Arts in International Affairs Degree in one of five programs

  4. Introduction Cont… • African Studies Program • National Resource Center • Focus on Social and Economic Development • Process of Social Change in the developing world • African Business Outreach • Mandate • Collaboration with Ohio Department of Development

  5. International Business Overview • Outlook for 2007-2008 • World trade growth is expected to remain strong at 7.7% • Emerging countries – vibrant economic growth • Potential effect of one or more of the political danger areas

  6. International Business Cont.. • International Business • Consists of transactions that are devised and carried out across national borders to satisfy the objectives of individuals and organizations. • International Business has become global • All 200 countries of the world now engage in international trade and investment to a significant degree • 2007: More balanced growth • Global economy – modest growth rate of 3.6% • Outsourcing Production to regions with low labor cost Source Country Risk & Economic Studies Department, Coface

  7. TRENDS AND SUB-SAHARAN AFRICA’S PRINCIPAL TRADING PARTNERS

  8. African Business Environment • Facts on Africa • Media projection of Africa • Second largest of the Earth's seven continents • 30,330,000 sq km (11,699,000 sq mi) • Population • 14% of the total world population • Number of countries • 53 independent countries • Languages • More than 2,000 different languages

  9. African Business Environment Africa could hold the land occupied by China, India, Europe, Argentina, New Zealand and the UnitedStates

  10. African Business Environment Cont… • Africa’s economic status • Average GNP growth = 5% • Strongest economies • South Africa, Botswana, Ghana, Senegal, Mauritius, Nigeria, Kenya, Uganda and Mali • Africa offers the highest return on direct foreign investment in the world (source Overseas private Investment Corporation) • Far exceeds all other regions • Africa as an emerging market • Commitment to improved corporate governance • Promoting a culture of government accountability • Building of market institutions • Entrenched values of transparency and accountability

  11. Africa’s economic groupings • Southern African Development Community (SADC) – 15 members • Common markets for Eastern and Southern Africa COMESA 20 members • East African Community (EAC) – 5 members • The Economic Community of West African States (ECOWAS) – 15 members • The Inter-Governmental Authority on Development ( IGAD) – 7 members • The African Union (AU) – 53 members

  12. GDPs OF STRONGEST ECONOMIES IN AFRICA ( all figures are 2005 est. except Mali, Senegal and Mauritius (2006 est.) Source: CIA WEBSITE

  13. Trade with the United States • African Growth and Opportunity Act(AGOA) • Enacted in 2000 by the US • Removed US import duties from about 7000 products • Non-oil imports such as autos, apparel and agricultural goods, jumped from US$1.4 billion in 2001 to US$2.9 billion in 2005 • Clothing exports from 37 African countries were given duty-free access to the US market • Ghanaian clothing maker – Berty Fong produces hunting clothing for Wal-Mart • Ethiopian textile and handicraft companies garnered $10m from US markets • Rwandan coffee yielded approximately $3 m of export to the US

  14. U.S. Exports to major Sub-Saharan African trading partners 2006(U.S Dept of Commerce, Bureau of Census)

  15. Chart showing US imports and Exports to Africa. (Source: U.S. Dept. of Commerce, Bureau of Census)

  16. Challenges and Opportunities • Political and Economic Landscape • Establish /Build Democracies that deliver • Social Services, justice, security etc. • Facilitate economic growth to improve standards of living • Promote a culture of Accountability • Regional integration • Development with Equity • Improve Corporate Governance • Private Sector as the engine of economic growth • Social Challenges • HIV/AIDS pandemic

  17. Association of African Business Schools (AABS) • Formed in October 2005 in Lagos (Nigeria) after earlier discussions in Accra (Ghana) and Dakar (Senegal) • Member countries • Kenya (4 ), South Africa (6), Ghana(1), Nigeria (2) Tanzania (1) and Senegal (2) Objective of the Association • To pursue activities that deliver results and build momentum.

  18. Opportunities • Trends/Opportunities • Reaffirmation of good governance • Good governance = Transparency = Accountability = Economic growth • Rule of law and respect for human rights • Zero tolerance for corruption • Significant commitments to transparency and accountability • Creation of African Union (AU) • Adoption of the New Partnership for Africa’s Development (NEPAD)

  19. Opportunities cont.. • Africa represents the last emerging market • A consumer base of more than 900 million people • Continent registered its highest Foreign Direct Investment inflows in over a decade • $28 billion in new capital in 2005 • Sovereign Credit Ratings • Botswana has a level “A” credit rating • Country Profiles • South Africa • Botswana • Ghana

  20. Republic of South Africa • Strengths according to Coface Analysis 2007 • Population – 48.8 million • GDP (US$ billion) 187.3 • 40% of African GDP • 5% economic growth projected for 2007 • Extensive mineral resources • 60% of world gold reserves • Quality infrastructure and efficient service sector • Political stability, tight economic management and good business environment have been assets • Good business environment has underpinned the macroeconomic framework • South Africa is the 34th largest export market for all US products • total value of $3.2 billion in 2006 (90% increase over 2005)

  21. Republic of South AfricaCont…. • Trade Mission to South Africa Feb, 2007 • The Council of Great Lakes Governors (8 states) • Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania and Wisconsin • Twenty companies from the Great Lakes (OH, PA, NY, WI) participated • In 2006, Great Lakes states exported $1.7 billion into SA Customs Union (1/3 of US exports) • Trade between Ohio and South Africa alone has grown steadily and was US$ 481 million in 2005

  22. Republic of South Africa Cont…

  23. The Republic of Botswana • Population 1.7 million • GDP (US$ billion) 17.24 • Strengths - Cofaceanalysis 2007 • Highest credit rating of A2 by Standards and Poor • Continued political stability since independence in 1966 • Positive business environment • Substantial foreign exchange reserves • 22 months of import coverage – US$5.6 billion • Substantial mineral resources • No. 1 producer of diamonds in the world

  24. Ghana • Population 20.7 million • GDP (US$ billion) 54.45 • Strengths (Coface Analysis 2007) • The Ghana Stock Exchange is one of the world’s highest performing stock markets • Raked in nearly 154% gains in the last two years • Political stability and democratic maturity • Improved business environment • Economic growth has remained high • Good performance of the gold and cocoa sectors • Enjoys positive image • Its mediator role in regional conflicts • Cancellation of a large proportion of foreign debt • Speedup economic growth • Poverty reduction

  25. Ghana cont…

  26. Summary • International Business environment • Focus on African • Political Stability • Economic Diversification • Governance and Accountability • Capitalizing on its competitive advantages

  27. THANK YOU FOR YOUR ATTENTION

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