Market of the Month – Sub-Saharan Africa
Featuring: Ghana, Nigeria and South Africa
Find Opportunities in Sub-Saharan Africa
Economic growth in the region is projected to accelerate this year to 6.7%, the highest in a decade, while Africa’s oil-exporting countries will likely see their economies expand by 10% or more. Sub-Saharan Africa, with its burgeoning consumer base of 650 million, political stability and economic reforms, has market potential that is growing. Recognizing this opportunity, the U.S. and Foreign Commercial Service Director General is proud to be leading a trade mission to this region March 3–March 11, 2008.
Why Sub-Saharan Africa?
U.S. total trade with sub-Saharan Africa increased 10% in the first half of 2007 from the same period in 2006, as both exports and imports grew. U.S. exports increased by 30% to $6.7 billion, driven mainly by increases in parts for oil field equipment, vehicles and parts, aircraft, wheat, platforms for offshore oil drilling, non-crude oil and medical equipment. Of the top five African destinations for U.S. products, exports to South Africa rose by 8% and those to Nigeria rose by 42%. As the markets in sub-Saharan Africa continue to show substantial growth and potential, Ghana, Nigeria and South Africa stand out as particularly advantageous destinations for U.S. exporters seeking to leverage business opportunities in this exciting region.
African Growth and Opportunity Act
The African Growth and Opportunity Act (AGOA) was signed into law on May 18, 2000, as Title 1 of The Trade and Development Act of 2000. The Act offers tangible incentives for African countries to continue their efforts to open their economies and build free markets.
By creating tangible incentives for African countries to implement economic and commercial reform policies, AGOA contributes to better market opportunities and stronger commercial partners in Africa for U.S. companies. The Act should help forge stronger commercial ties between Africa and the United States, while it helps to integrate Africa into the global economy. U.S. firms may find new opportunities in privatizations of African state-owned enterprises or in partnership with African companies in infrastructure projects. For more information, please visit http://www.agoa.gov.
Now that we have provided a general overview of the region, let’s take a closer look at why you should consider doing business in Ghana, Nigeria and South Africa.
Ghana
A strong multiparty democracy, Ghana has long served as a model for other African nations due to its free and fair elections and rule of law. Accordingly, Ghana offers not only an increasingly sophisticated market of 22 million consumers, but also a solid platform from which to access West Africa’s regional market of 250 million potential customers. Ghana has qualified for Millennium Challenge Account funds, available only to countries that have adopted good governance policies. In 2006 Ghana ranked among the top 10 reforming countries in the world. Its per capita output is among the highest in West Africa, and its steady economic growth over the past four years—6.2% in 2006—is expected to continue, driven by industry and services. Read more about opportunities in Ghana.
Nigeria
Nigeria, the most populous country in sub-Saharan Africa at over 120 million people, continues to push forward economic reforms, while its $121 billion GDP is growing at around 10%. Pending development of its agricultural and non-oil industrial capacities, the country continues to depend heavily on imports. Last year Nigeria received a BB minus rating from two international credit rating organizations, Fitch Ratings and Standard & Poor’s, which acknowledged the stability of the Nigerian currency and the government’s commitment to economic and social reforms. Nigeria holds tremendous potential for U.S. businesses willing to conduct due diligence and draw on assistance from the U.S. Department of Commerce–U.S. Commercial Service in screening prospective partners and customers. Read more about opportunities in Nigeria.
South Africa
South Africa’s market size of 47 million people, combined with its well-developed infrastructure, productive economy and pro-business environment, make it a logical choice for many U.S. companies seeking to conduct business on the African continent. The country’s GDP reached $587.5 billion last year, marking 5% growth. South Africa boasts a sophisticated financial sector with a stock exchange (Johannesburg Stock Exchange) that ranks among the top exchanges in the world. Thanks to the commodity-driven export boom and surging retail demand, a medium-term growth rate of 6% is attainable. Preparations for the 2010 FIFA World Cup, scheduled to take place in South Africa, are expected to increase demand for U.S. goods and services in a country that already ranks as one of the most popular destinations for U.S. exports on the African continent. Read more about opportunities in South Africa.
>>Read more about South Africa