Attracting foreign investment is not likely if a country makes its market slightly more attractive, but should rely on countries making their markets more attractive than their competitors, as global investors can do business anywhere, US Department of Commerce industry and analysis assistant secretary Marcus Jadotte believes.
“If a market is not more attractive than the next option, opportunities will be lost,” he outlined to delegates at the Trade Winds Africa conference, in Johannesburg, on Wednesday.
Jadotte noted that, fortunately, the US had witnessed significant and continued progress across Africa in developing business institutions that could lead to strong markets and more jobs, adding that more US small businesses were looking to expand to Africa.
Citing the World Bank’s Ease of Doing Business report, Jadotte highlighted that six out of the ten most improved countries in terms of business regulatory performance were in sub-Saharan Africa. “Of the 230 positive regulatory reforms that took place last year, 75 took place in the region.
“As a result, countries like Rwanda, Mauritius and South Africa ranked among the top 50 countries in terms of ease of doing business. The effect of these improvements and focusing on these markets in Africa has already significantly impacted business decisions,” he pointed out.
Meanwhile, Jadotte pointed out that the continent was currently in a “truly advantageous position”, as it was now attracting increased foreign direct investment.
He highlighted that US companies were looking for true partnerships, an approach that was adopted after last year’s US–Africa Business Forum where companies committed to invest over $14-billion on the continent, which the Department of Commerce was now advancing.
Earlier this year, the department doubled its presence in sub-Saharan Africa, opening four new commercial service offices. Staff had also been added to its South African offices, particularly in Durban, as it hosted the largest port on the continent.
“We are re-establishing our presence at the African Development Bank,” Jadotte said, adding that the department had also created a new advisory committee for doing business in Africa, represented by leading US firms.
Jadotte called on US companies to give recommendations that would strengthen engagement in South Africa and on the continent. “We need input from the private sector,” he said.
LOOKING AHEAD
Jadotte noted that the department would soon launch its first institutional investor roadshow, which would connect US investors with African heads of State to discuss the strengthening of capital markets and increasing long-term investor flow.
The roadshow would also introduce US exporters and investors to specific opportunities in Africa.
A fact-finding mission to gather information and form additional partnerships to support the growing business relationships between Africa and the US would follow.