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Denise Turney
10/31/2009 11:48 PM UTC
Listening to your show with the attorney, Peter. Keep up the great work! Denise Turney Author - Long Walk Up Off The Shelf Radio http://www.chistell.com
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This radio zone promotes discussions and dialogue, as well as providing information about doing business in Africa.
Afribiz
Date / Time: 12/9/2009 3:00 PM UTC
Category: Business
Call-in Number: (347) 215-8835
This segment takes a look at what's going on in the African capital markets. We will be joined by Hubert Danso, Managing Director of Africa Investor in South Africa.
Date / Time: 11/13/2009 12:42 AM UTC
The results of the African Infrastructure Country Diagnostic (AICD) study was released by the World Bank today. It provides detailed data and analysis of the ICT, Power, Transport, Air Transport, Ports, Railways, Roads, Irrigation, Water Resources, Water Supply and Sanitation infrastructure sectors in 30 African countries. This research serves as a baseline for future infrastructure development in Africa.
But for the investor or business person, it helps you assess where to strategically place your business in Africa. One key element of any business model is the distribution channels for products/goods. The AICD study gives you plenty of details to narrow possible locations for operations when considering infrastructure. You can decide which country within a regional economic community, e.g., ECOWAS, to position your operations to streamline the delivery and improve efficiency across the region. You can pull information by sector, country and regional economic community.
There is an exorbitant amount of free research from this study available at www.infrastructureafrica.org. Since it was just launched, there are some hiccups with the website. Be patient. The research is worth the wait.
Since infrastructure issues are a major consideration when looking at where to invest or do business in Africa, Afribiz is dedicating the next few months to help you shape a strategic decision framework around infrastructure. We are calling this series, “Developing a Successful Business Model for Africa around the Infrastructure Issue.”
Look for new strategic tools and information every week, starting November 16, 2009, at www.afribiz.info. Also, look for radio segments on infrastructure on AfribizTalk at www.blogtalkradio.com/afribiz, starting November 23, 2009. You can follow our updates in real-time at www.twitter.com/afribiz.
Date / Time: 11/7/2009 4:36 AM UTC
“The process for seeking capital, or funding, for a business is an ongoing task that entrepreneurs need to understand,” says Patrice Backer. Mr. Backer is Chief Operating Officer for Advanced Finance and Investment Group (AFIG). He joined us for our November 4, 2009 segment, “Preparing Your African Venture for Investors.”
We opened the show with an overview of private equity funding options for businesses based on their lifecycle. There are essentially two phases – start-up and growth/expansion. During the start-up phase, businesses seek pre-seed, seed or early stage funding. This start-up phase is connected with what its called venture capital. Newer firms present higher risks, so there are certain types of investors, venture capitalists, who focus on these types of firms. Backer noted that venture capital is still not a strong option in Africa. The exception is South Africa which has a more mature market.
In the growth and expansion phase of an existing firm, there are also three funding cycles – second stage, third stage and bridge funding. There is also an option of buy-out. Growth and expansion funding for existing firms is the focus for the majority of private equity firms with an African portfolio. Backer explains that it provides a good middle ground for investors – they get good performance with lower risk.
Backer says that investors in private equity funds in Africa are development institutions, private sector or a combination. He says that development institutions, often affiliated with governments, have a higher tolerance for the risk environment in Africa so they are consistent contributors. When the global economic crisis hit, it was private sector contributors who mostly pulled out of African investments. However, it’s important to note the predominant reason for withdrawing investments was the need for cash not a lack of performance. In fact, the only African country that had negative growth during this period is South Africa.
When firms are looking for private equity funding, Backer has three recommendations. First, the firm should have a solid business plan. Second, the firm should be organized, demonstrating it can handle all aspects of the business operation from customers to legal requirements. Third, the owners should not shy away from hiring professional, e.g., financial and legal, to help them with the process.
Backer notes that there challenges which limit the private equity sector in Africa. First, the legal and institutional frameworks conducive to private equity firms still lag in Africa. Second, investments come mostly from foreign sources instead of local. Once more local investments occur, it will shore up the number of foreign investors that come to the table. One of the recent success stories is SEACOM, the undersea broadband cable provider for Africa. SEACOM had a strong showing of both local and foreign investors.
To learn more from this insightful discussion, listen to the recorded show. To learn more about AFIG, go to http://www.afigfunds.com/. To stay in the mix of venture capital and private equity opportunities in Africa, you may want to join one of the online communities like VC4Africa.
For additional resources about doing business or investing in Africa, go to our site – http://www.afribiz.info/.
Original Air Date: 11/7/2009 4:30 AM UTC
Date / Time: 11/1/2009 6:10 AM UTC
There is a ground swell of interest growing about business and investment in Africa. Too often that interest wanes because businesses know very little about how to evaluate and enter opportunities in Africa. This segment, “Practical Insights for Investing in Africa,” started a three-part series on investing in Africa to help those interested take those first steps.
We were joined by Attorney Peter Hansen, who specializes in African Investment Law. Also, Professor Richard America, who teaches a course on investing in Africa at Georgetown University and specializes in management development in Africa, contributed to the conversation.
Throughout the discussion, we emphasized a critical element for any venture into Africa – a focused strategy. For investment, the investment plan is your instrument. Some issues to consider are:
· What are your financial goals?
· How much money do you have to invest? Have you established a budget?
· What level of risk can you tolerate? What returns do you want?
· What is your investment timeframe – short-term, mid-term and long-term?
· How much effort will go into managing the investment?
· What are the tax issues with which you will deal?
Peter Hansen said that many investors want to “shoot from the hip” when they invest in foreign markets. Hansen says that investors will have different plans and legal expectations for African countries, so preparation is essential.
Hansen also emphasized a good mindset for business/investment in Africa for both the investor and Africa is focusing on sustainable business opportunities. This involves developing open and honest business deals.
For Americans investing in Africa, Hansen shared that there is anti-corruption legislation, the Foreign Corrupt Practices Act (FCPA), to which we must adhere. He suggests that every investor establish an anti-corruption plan before venturing into international business and investment.
Richard America mentioned that there are investment opportunities in enhancing the value chains in Africa in sectors like timber, minerals. These sectors have typically focused on exporting raw materials, but building local capabilities is becoming an imperative. The host, Lauri Elliott, suggested that enhancing the capabilities of workers and managers can be a business strategy to help investors succeed in Africa. African governments are looking for ways to develop their local workforce, so investors can create goodwill by helping them do so.
America also crystallized the importance of the local partner. He shared what a critical asset a local partner, who is honest, trustworthy and knowledgeable, can be.
Both America and Hansen mentioned resources for investors and business people. These are the Overseas Private Investment Corporation (www.opic.gov), African country investment and promotion agencies (http://www.afribiz.info/?p=647) and the World Bank’s Doing Business website (www.doingbusiness.org).
As a final note, America suggests to evaluate which country to enter, check out the countries that have received development funds from the Millenium Challenge Corporation (www.mcc.gov). Countries go through rigorous analysis for policies promoting economic and political freedom before receiving funds from MCC. Some African countries that passed the challenge include Benin, Kenya and Morocco. Several other African countries, e.g., Liberia and Malawi, are eligible to receive funds and are currently going through the approval process.
Attorney Hansen prepared a brief on the issues he raised, which you can download from http://media.afribiz.info/practical-legal-issues-investing-africa-hansen.pdf. To access the archived show, check out http://www.blogtalkradio.com/afribiz/2009/10/28/Practical-Insights-into-Investing-in-Africa.
To learn more about doing business in Africa, first visit our radio show page at http://www.blogtalkradio.com/afribiz. Then, visit our information portal at http://www.afribiz.info/.
Original Air Date: 10/28/2009 2:00 PM UTC
Date / Time: 10/23/2009 4:09 PM UTC
Exporting is the commercial activity of selling and shipping good and/or services to a foreign country. It is typically seen as a growth and expansion strategy for an established firm. However, even start-up firms can find foreign markets more attractive than home markets. No matter the rationale for exporting, the approach is to enter the market cost efficiently and reach a break-even point as soon as possible.
An export-ready business has considered the following: 1) company/product/service strengths, 2) rationale and objectives for exporting, 3) growth potential in other markets for products and services, 4) context of foreign country and the industry in the foreign country, 5) legal and regulatory requirements, 6) target market in foreign country, 7) financial requirements and 8) market entry issues. We zoom in on market entry strategies in our discussion, “Preparing for Exporting – Getting to the Customer,” on AfribizTalk on October 21, 2009.
We were joined by two experts – Dr. Patrick Wilson and Dr. Emeka Nwankwo. Dr. Patrick Wilson, Administrator of Big-Africa Partnerships Secretariat (BAPS), shared how the technical issue of labeling impacts the marketing of an African good exported to the United States. Dr. Emeka Nwankwo, CEO of Vertical Optimization LLC, shared the process they use in Export-Path , which illustrates both the issues exporters should address and an approach for success.
Dr. Pat indicated labeling should be informative, truth and not misleading. Also, anything you put on labeling you must be able to prove. Therefore, you should follow the mantra, “Do what you say and document what you do.”
Dr. Pat stressed the importance of having a good relationship with the distributor and buyer of your product in the foreign market. Since in many cases you will not be local, the distributor and buyer will handle the presentation and placement of your product to your potential customers. You want to work with those who will place your business opportunity as a priority.
Dr. Pat’s point leads into the larger discussion of export readiness. There is a distinct difference between being export “willing” and export “ready.” You may want to export, but have you developed the strategies and capacity to do so?
Dr. Nwankwo said there are three key challenges faced by exporters. First, exporters need to access appropriate information to help shape their decision about exporting. We agreed that this is a key gap in how many businesses approach exporting. Two, exporters need to have appropriate resources, e.g., human capital, equipment, and financial capacity. Three, exporters need access to the marketplace, meaning the physical process of getting the products or services to the customer. This includes elements like customs clearance, transport, warehousing, distribution and marketing.
We finally zoomed in on the challenge of access to information. This is a challenge consistently mentioned by experts and clients alike. Dr. Nwankwo says information, or the lack thereof, impacts a decision to pursue or not pursue exporting. The first consideration is the exporting business concept. This “straw-man” serves as input to the information gathering process. It could be an existing business plan along with basic information about the idea for exporting, e.g., rationale and objectives, potential export country, target audience, timing, issues.
According to Dr. Nwankwo, the Export-Path process walks potential exporters through four key steps. These steps include considering the concept, gathering intelligence on the opportunity, developing the product prototype and completing a risk analysis. After gathering the intelligence, potential exporters will be able to decide to pursue exporting or not. After completing the risk analysis, an export plan is generated. The export plan is key to acquiring finance, if needed, for developing production capacity.
Since appropriate information is critical, we recommend that you first seek out and review existing information that is readily available and free. Our Afribiz Info Portal will help you do just that. In addition, we provide an on-demand seminar outlines a path for plunging into business in Africa. It can also be applied to other ventures into international business. The seminar, “Setting a Path for Success in Africa: in Business, Investment and Life,” is also available at the Afribiz website.
Listen or download the recorded radio show here.
Check out other AfribizTalk shows here.
Original Air Date: 10/23/2009 3:00 AM UTC
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