Africa Review Project

U.S. executives point out that Africa is only one of many possible destinations that American corporations consider for investment. Investment is highly competitive, and many countries are vying to become the destination of choice for capital. That said, U.S. companies in some sectors, particularly technology, now regard Africa as the last frontier for growth. These companies believe that Africa, with its market of about 1 billion people, can no longer be ignored. Even with this interest, Africa faces tough competition and huge hurdles to attract U.S. investment. 

Globally, competition for American FDI is high. Countries from all regions showcase their advantages, align their offers to U.S. needs, clamor for attention, and invest in their own countries to attract additional investment. Consequently, U.S. corporations do not lack investment choices, and they rarely consider African nations.

Further, news about Africa is mostly about chaos and unrest. Africa is not active or aggressive enough about attracting investment; the voices of the few countries that are making an effort get lost in the surrounding negative noise. Some African countries are making special efforts to assist foreign countries that invest. For example, Nigeria's president regularly engages with the local leaders of foreign companies to help cut through bureaucratic tape.

U.S. corporations need a strong and specific draw from Africa to make investment worthwhile.

This can be the pull of a big market or a big source of critical raw materials or a belief that there is a competitive advantage to early entry into African markets. The survey data show that few of these pulls exist or are not sufficiently strong to be effective in the near term.

The Conversation Behind Closed Doors is a two-part, qualitative survey conducted by Baird’s CMC in partnership with the U.S. Chamber of Commerce.

Part one, The Corporate Conversation, is an inside-the-boardroom survey of attitudes toward corporate investment in Africa among leading U.S. corporations. The information was gathered during a series of behind closed door interviews. All interviews took place from January to November 2008 and were conducted in person by senior associates of Baird’sCMC. This document presents the findings of part one.

Part two, The Public Sector Conversation, will be conducted over the next several months. It is is an inside-the-government survey of the responses set forth in part one.