Business in Africa
Irin reports, unsurprisingly, that South Africa is Africa's largest foreign investor. According to a report by the UN Conference on Trade and Development (UNCTAD), we accounted for 60 percent of Africa's Foreign Direct Investment (FDI) outflows for 2003.
"Seven South African companies are the only ones on the continent that feature among UNCTAD's top 50 transnational companies (TNCs) based in developing countries. The list includes paper manufacturer Sappi,petrochemical company Sasol, telcommunications company MTN, and mining giant AngloGold."
Africa is ripe for investment, although there are many obvious disadvantages, there is much money to be made from investing in the more stable economies like Senegal, Nigeria, Ghana etc While many western companies are hesitant to take the risk, South African corporations are diving in and reaping the benefits. A recent article in Business Day reports that that the time has never been better to look at African markets. The article quotes Leadership magazine as saying that there is a marginalisation of African markets that can be considered as a collective first world blind-spot.
"This is evident in the fact that CNN and Bloomberg routinely ignore African markets, while the BBC recently reported Thailand was the best performing market last year, oblivious to the fact that some African markets outperformed it and other major world exchanges."
There have been a lot of bi-national commissions going on this year between South Africa and other African countries that are focusing on developing trade and investment. I think this is a good thing, if the rest of the world is going to hesitate it's great that African countries are increasing trade among themselves. Nigeria in particular is going all out to court South Africa with some high level delegations coming into the country over past months to try and encourage South African investment. One of my concerns however, is that as usual, it's the big boys who are going in to do business. It doesn't seem as if enough is being done to encourage smaller scale investment and entrepreneurship. Also, Africa needs to do more to encourage manufacturing and not rely so much on exporting raw materials. This is one of our biggest downfalls. And, when South Africa goes to do business in other African countries are we operating according to the same principals that we would use at home - are we going to try and empowering local communities as well?