Home' Trinidad and Tobago Guardian : August 10th 2014 Contents in 2000 to US$246.4 billion in 2012, according to United
Nations numbers crunched by the Brookings Institution.
South Africa exports BMW sedans to the United States.
Ethiopia has developed a niche making shoes. And it produces
the best-selling imported birdseed in the United States.
"We see Africa as the fastest-growing market worldwide,"
says David Picard, a manager at heavy equipment manufacturer
In 2011, Wal-Mart acquired Massmart Holdings, which runs
350 stores in 12 sub-Saharan countries. Marriott International
last year agreed to buy Protea Hospitality of South Africa, a
116-hotel chain in seven sub-Saharan countries.
Cummins, based in Columbus, Indiana, has enjoyed dou-
ble-digit sales growth this year in supplying power equipment
to Africa. Consumers in the Nigerian capital of Lagos eat
burgers from Johnny Rockets and ice cream from Cold Stone
No nation has been more aggressive in Africa than China.
Its direct investment in sub-Saharan Africa has jumped from
virtually nothing in 2002 to $18.2 billion in 2012. China is
hungry for oil, coal and other resources and eager to develop
the roads, bridges and ports needed to pull them out of Africa.
Africans tend to favor doing business with China in part
because it s less likely than Western nations to demand economic
and political reforms to accompany trade and development
"Investors from the US and Europe have tended to be large
investors who demand all kinds of facilitation, who expect all
kinds of conditions," says Frederick Golooba-Mutebi, a Rwan-
da-based researcher and honorary fellow at the University of
Manchester. "I do not see Europe and the US catching up
Indeed, this week s summit is seen as an American effort
to regain some of the influence lost in the region to China
over the past decade. Next year, the United States hopes to
expand a 14-year-old free-trade deal with Africa.
On Tuesday, the Obama administration announced US$14
billion in commitments from US businesses to invest in Africa;
money to be plowed into construction, clean energy, banking,
information technology and other sectors. The money includes
a US$2 billion investment by General Electric by 2018, US$200
million by Marriott and a US$66 million commitment by IBM
to provide technology services to Ghana s Fidelity Bank.
In addition, Coca-Cola and its African bottling partners
announced an investment of US$5 billion, raising to US$17
billion Coca-Cola s investment in Africa from 2010 to 2020.
Before Africa s continued ascendance can be assured, though,
analysts say its countries must resolve some thorny questions.
• Can it build the roads, railways and power plants
needed to sustain its pace of growth?
Rosa Whitaker, a former US trade official and now a con-
sultant specialising in Africa, says sub-Saharan countries need
to spend more than $90 billion on infrastructure. Electricity
is a big obstacle. Two-thirds of people in sub-Saharan Africa
have no access to it. "You can t do much without power,"
notes Stephen Hayes, president of The Corporate Council on
Africa, which promotes US-Africa commercial ties.
• Can sub-Saharan nations do more business with each
other, as nations in more advanced parts of the world
African countries typically conduct only about 10 per cent
of their trade with their neighbors. By contrast, countries in
the Europe Union do about 70 per cent of their trade with
each other, Southeast Asian countries 30 per cent, Whitaker
says. Among the reasons for weak intraregional trade: Poor
roads and other infrastructure; conflicts and troubled ties
among countries; and corruption at customs posts that can
delay shipments at the border.
• Can they transition from supplying other countries
with materials to generating their own finished products?
Africa traditionally has supplied raw materials---oil, coal,
diamonds---and let other countries turn them into valuable
"We have been exporting crude oil and importing petroleum
products," notes Nigerian Trade Minister Olusegun Aganga,
a former Goldman Sachs executive. "No nation has managed
to go from a poor to a rich nation by relying entirely on export
of raw materials."
Nigeria s government has an ambitious plan to industrialise
its economy and add value to its natural resources; to turn
crude oil into chemicals and other petroleum products and
sugar cane into the sugar that Nigeria now imports from South
• Can they avoid the so-called resource curse?
Abundant resources have failed to build widespread wealth
or stable growth across Africa. Many economists say natural
riches have tended to promote corruption and conflict and to
stunt development in poor countries. Analysts are studying
the East African countries of Mozambique, Tanzania, Uganda
and Kenya as they develop newly found reserves of oil and
In the past, analysts say, African countries have been out-
negotiated and exploited by foreign companies. This time,
Cullen Hendrix, a University of Denver specialist in global
conflict, wonders, "How can host countries get the best possible
One encouraging sign, Hendrix says, is that ordinary Africans
have grown more assertive about holding their governments
accountable for deals they cut.
Assessing Africa s prospects after a decade of solid growth,
Jennifer Cooke, director of the Africa program at the Center
for Strategic and International Studies, thinks the region s
nations have "an opportunity right now. But it s not a guar-
"Do they use this moment for economic transformation?"
PAUL WISEMAN, AP Economics Writer
AUGUST 10 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
FINANCIAL ANALYSIS | SBG21
In the past, analysts say,
African countries have been
exploited by foreign
One encouraging sign is
that ordinary Africans have
grown more assertive.
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