AfriBiz: Opening Doors to Business in Africa through Information and Intelligence  

Show Notes

• Archived Blog Post

  Date / Time: 11/1/2009 6:10 AM UTC

  Post-Show Note: Practical Insights into Investing in Africa
  

  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/.

  • Tags:
  • africa
  • invest
  • investment
  • investment plan
  • african
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