Although some companies looking to invest in Africa and, more so, South Africa, remain “extremely bullish” about the development of the continent, further investment in key economic drivers is needed.

These include agriculture, which will triple in size, topping $1-trillion by 2030, infrastructure development and greater investment in tourism.

Speaking at a US-Africa business opportunities seminar, hosted by the Johannesburg Chamber of Commerce and Industry, GE Marine global president and CEO Tim Schweikert noted that while China and India were slowing down in growth, Africa had shown “huge potential”, but some challenges remained.

The company employed about 2 200 people on the continent and had orders totalling $3.5-billion related to sub-Saharan African (SSA) projects. These included a $1-billion railway and power equipment deal in Angola, a $1-billion, five-year technical expertise and infrastructure capacity building programme in Nigeria and its involvement with State-owned Transnet for the supply of 436 locomotives.

Schweikert highlighted that although Africa had the world’s fastest growing air transport industry, the continent’s approach towards an open sky policy was a significant impediment to regional integration and intercontinental trade.

He added that the Economic Community Of West African States, the Southern African Development Community and the Common Market for Eastern and Southern Africa were not integrated, which hampered mobility. “The East African Community is the only trading block that is aggressively pursuing integration.”

“Eighty per cent of Africa’s rail infrastructure is based in South Africa. [This means that] there is a tremendous need for infrastructure development across the continent, which holds significant opportunities,” Schweikert noted.

He further pointed out that inconsistent policy in areas such as customs, labour and foreign exchange, were not supporting the ease of movement of goods across borders.

Construction company Fluor director Mark Flower reiterated this sentiment, noting that companies looking to invest in the SSA region needed progressive economic policy to further encourage jobs and growth. “In countries like South Africa, when we are developing large projects, we do not need to develop the local industry [as it is already established], but we do need to develop small- to medium business capacity, [which will lead to further economic inclusion].”

He added that even though companies were founded on foreign territory, it was important that these companies increased local participation and for local contractors to “come to play”.

US INVESTMENT
The seminar was hosted at the US Consulate, in Sandton, and formed part of the US government’s drive to promote investments throughout Africa.

With Fluor and GE being US companies investing on the continent, it further highlighted the US government’s Doing Business in Africa programme, which was aimed at attracting US investment to capital projects on the continent.

Africa was the ideal destination for continued investment, noted US Commercial Service (USCS) deputy senior commercial officer Brent Omdahl, as it was currently home to six of the top ten fastest growing countries in the world, with US exports to SSA close to $21-billion a year.

He added that South Africa was a logical and attractive choice for US companies to enter the African continent, but that the USCS also connected local companies with possible investors though international trade events and the US supplier search programme.