Advice on Doing Business in AfricaBy
Later this month, hundreds of U.S.-based small-business owners will meet potential partners and suppliers from Africa's 53 countries at an international summit held in Washington, D.C. The 7th Biennial U.S.-Africa Business Summit will include a business matchmaking program aimed specifically at small and mid-sized companies on both continents, says Stephen Hayes, president and CEO of the trade group The Corporate Council on Africa, which is organizing the event. With democracy and vibrant free enterprise becoming common in many African nations, Hayes says, the continent is a promising emerging market that U.S. companies ignore at their peril. He spoke to Smart Answers columnist Karen E. Klein. Edited excerpts of their conversation follow.
For most small business owners, the cultural and distance barriers involved in doing business with Africa seem insurmountable. Why is it worth their while to investigate the possibilities?
There's a great deal of negative publicity surrounding Africa, and that tends to be all that people hear. But in reality there are 53 countries on the continent and in many of them, there are an enormous amount of positive things happening. There are extraordinarily promising possibilities in agribusiness, infrastructure, and tourism.
A lot of that negative publicity that you mentioned involves war, natural disaster, and governments steeped in corruption. Those don't seem like ideal business conditions.
Well, the charge of corruption is valid in some countries. But you have to remember that there are disasters and corruption all over the world, including in South America and North America. That doesn't preclude us doing business there.
Which African countries offer the most promise for business exchanges?
The best possibilities are in the southern half of the continent, countries like Mozambique, South Africa, Mauritius, and Namibia. Ghana has enormous potential in its ports, fisheries, and tourism, as does Botswana.
What about younger democracies, such as Liberia and Nigeria?
Liberia's new woman president [Ellen Johnson Sirleaf] organized her campaign partly out of our offices. The country is very open to American business, but it's quite tough to start from ground zero. Everything in that country has been destroyed and financing would be a challenge there. Nigeria is also a booming market where a lot of new things are happening, but it's a tough place to do business and you really have to know your partners.
Another area doing surprisingly well, by the way, are the Sub-Saharan countries of Burkina Faso and Mali. They get high marks for business development, but they are French-speaking so often the trade there gravitates to France.
What's on the agenda at your summit specifically for smaller companies?
The Africa Trade Office has gotten a $400,000 developmental grant from the U.S. Small Business Administration to run a matchmaking program for small- and mid-sized businesses. They will be given the opportunity to easily identify prospective business partners and sign up electronically for brief introductory meetings before and during the summit.
The summit also offers 50 industry-specific workshops based on the knowledge of how to do things in African business, new ideas in the field, and so forth.
When is the summit—and can small businesses still attend?
Yes, they can still attend—they can register at the door if they want to. The summit will be held at the Walter E. Washington Convention Center in Washington from Sept. 29 to Oct. 1.
We had 2,400 attendees last time, and we're hoping for at least 1,500 this year. Several African heads of state are coming and many government ministers. We're hopeful that our President and Secretary of State will be there too.
How long has the summit been held, and who sponsors it?
We've held it every two years since 1997. The Corporate Council sponsors it. We are a nonprofit trade organization whose mission is to increase trade with Africa. We do very little lobbying. A group of business people founded the organization in 1993, and it was made possible through a government grant under Ron Brown. [Brown was the first African-American U.S. Secretary of Commerce; he served under President Bill Clinton. He died in a plane crash in 1996.]
What results have you had since the group was founded?
We have 185 member companies that together represent 85% of all U.S. private investment in Africa. About one-third are Fortune 500 companies, one-third are mid-sized, and one-third are small companies that have gross revenues of $6 million or less.
Our small business community is quite varied. Some of them actually have operations in Africa, others are looking to subcontract for larger companies working in Africa, and some are involved in trade with Africans. One of our members, Computer Frontiers in Maryland, is a small firm that rebuilds and sells secondhand computers to Africa. Another is a firm that puts bridges together very rapidly and sells them to African countries. We have helped many companies import goods from Africa, things like handicrafts and wines. If you go to a store shelf and see a product from Africa, it's likely that we've brokered that deal.
How much does it cost a small business to join your group, and what benefits do they get?
It's $5,000 for a small business to join, which is a bargain because if you got over [to Africa] on your own, particularly as a small business owner, you'd have a lot of trouble figuring out what's going on, and you could easily spend tens of thousands just trying to learn about the opportunities. In our group, you quickly get a professional sense of what the issues are and you can identify qualified partners.