Transcript Training Presentation - Welcome to the African Studies

African Business
Environment- the
Success Stories.
UNIVERSITY OF FLORIDA, GAINESVILLE
January 18th 2008
PRESENTATION BY
BEATRICE SELOTLEGENG
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
2
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
3
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
4
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
5
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
6
TRENDS AND SUB-SAHARAN AFRICA’S PRINCIPAL
TRADING PARTNERS
Countries
2004
(% of
market
share)
2005
(% of
market
share)
China
6.9
7.7
Germany
7.4
6.7
France
6.8
6.2
U.S.A
5.9
5.9
U.K
5.1
4.7
Japan
4.0
3.6
Italy
2.8
2.8
Spain
1.4
1.4
Total EU
33.0
31.3
7
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
8
African Business Environment
Africa could
hold the
land
occupied by
China,
India,
Europe,
Argentina,
New
Zealand and
the United
States
9
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
10
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
11
GDPs OF STRONGEST ECONOMIES IN AFRICA
(
all figures are 2005 est. except Mali, Senegal and Mauritius (2006 est.) Source: CIA
WEBSITE
COUNTRY/GDP
GDP (PPP)
GDP (PPP) per GDP (PPP)
CAPITA
GROWTH
SOUTH
AFRICA
$187.3 billion
$12,000
4.9%
BOSTWANA
$17.24 billion $10,500
4.5%
GHANA
$54.45 billion $2,500
4.3%
LESOTHO
$1.362 billion $2,500
0.8%
UGANDA
$48.73 billion $1,800
4%
NIGERIA
$174.1 billion $1,400
6.2%
KENYA
$37.15 billion $1,100
5.2%
SENEGAL
$21.54 billion $1,800
2%
MALI
$14.77 billion $1,300
5.1%
MAURITIUS
$17.02 billion
5%
$13,700
12
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 $3 m of export to the US
13
U.S. Exports to major Sub-Saharan African trading
partners 2006 (U.S Dept of Commerce, Bureau of Census)
U.S.Exports to Major Sub-Saharan African
trading partners 2006
South Africa
21%
Nigeria
37%
2%
Equatorial Guinea
4%
Kenya
5%
13%
Angola
Ghana
18%
Other
14
Chart showing US imports and Exports to Africa.
(Source: U.S. Dept. of Commerce, Bureau of Census)
60000
50000
40000
US IMPORTS
($millions)
US EXPORTS
($millions)
30000
20000
10000
0
2003
2004
2005
2006
15
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
16
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.
17
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)
18
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
− $28 billion in new capital in 2005
•
Sovereign Credit Ratings
− Botswana has a level “A” credit rating
• Country Profiles
− South Africa
− Botswana
− Ghana
19
Republic of South Africa
• Strengths according to Coface Analysis 2007
• Population – 48.8 million
• GDP (US$ 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)
20
Republic of South Africa Cont….
• 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
21
Republic of South Africa Cont…
22
The Republic of Botswana
• Population 1.7 million
• GDP (US$ billion) 17.24
• Strengths - Coface analysis 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$5.6 billion
− Substantial mineral resources
• No. 1 producer of diamonds in the world
23
24
25
Ghana
• Population 20.7 million
• GDP (US$ 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
•
26
Ghana cont…
27
Summary
• International Business environment
• Focus on African
− Political Stability
− Economic Diversification
− Governance and Accountability
− Capitalizing on its competitive advantages
28
THANK YOU FOR YOUR
ATTENTION