Africa offers US multinationals a compelling trade and investment opportunity thanks to its rapid economic growth rates and a growing population and increasing urbanisation, Johannesburg-based Standard Bank said yesterday.
Economic growth in sub-Saharan Africa has exceeded 5% a year for more than a decade now giving the continent a 4.1% share of global gross domestic product (GDP), up from 3.4% in 2000, Standard Bank said.
“Trade with African economies and investment in Africa offer big rewards but requires sound local knowledge, strong local partnerships and a long term view,” Standard Bank Group CEO Sim Tshabalala said in a statement.
“In that sense the US plan to revitalise its commercial and trade links with Africa couldn’t come at a more opportune time.”
Tshabalala said Africa had come a very long way from its era of aid-dependence.
“The rapidly emerging middle class in Africa is driving large-scale diversification of Africa’s economies which offers immense opportunities for companies willing to invest,” he said.
Emerging economies – and the BRICS in particular – are seizing the African opportunity, Standard Bank said.
In 1992 China, India and Brazil accounted for just 3% of Africa’s global trade compared to 25% today, and a wide range of firms from India, Brazil and South Africa are also expanding quickly in Africa, often with strong support from their governments.
“While there is still a lot to be done the overall direction that Africa is moving in is overwhelmingly positive,” Tshabalala said.
“US companies can do very well in Africa provided they put in the effort to understand the continent’s markets in detail, rather than looking at the continent as a single.