I had the pleasure of meeting Amina Salum Ali, Ambassador of the African Union (AU) to the United States, during her visit to Seattle. Hosted by the Trade Development Alliance of Greater Seattle and the Africa Chamber of Commerce of the Pacific Northwest on October 27, 2009, Ambassador Ali gave a presentation titled "An Integrated Africa: An Overview of African Economies and the African Union." Since her appoint as the AU ambassador in 2007, this was the Ambassador's first trip outside of Washington, DC that focused primarily on promoting Africa as an investment opportunity. (Photo of Ambassador Ali courtesy of the Trade Development Alliance of Greater Seattle/Allison Peterson)
Ambassador Ali gave an excellent presentation outlining the economic benefits of investing in the African continent. Specifically, she noted the opportunities that exist in manufacturing, agriculture, mining, health care, transportation, and information and communications technology including using mobile phones for banking, education, and medicine. While Africa is not immune to the economic recession, said Ambassador Ali, many investors in Africa are seeing a positive return on their investment. She also encouraged investors to focus on establishing processing operations, which are greatly lacking throughout Africa. Not only is De Beers mining diamonds in Africa, Ambassador Ali noted, the diamond conglomerate is the only company processing its product (diamonds) locally.
Ambassador Ali highlighted the benefits of the African Growth and Opportunity Act (AGOA), which was signed into U.S. law in 2000. According to a website maintained by the U.S. Department of Commerce, http://www.agoa.gov/, AGOA "provides beneficiary countries in Sub-Saharan Africa with the most liberal access to the U.S. market available to any country or region with which we do not have a Free Trade Agreement. It reinforces African reform efforts, provides improved access to U.S. credit and technical expertise, and establishes a high-level dialogue on trade and investment in the form of a U.S.-Sub-Saharan Africa Trade and Economic Forum."
While acknowledging the humanitarian and military conflicts that exist in Africa, she reminded the attendees, who included several members of the African Diaspora that conflicts will dissipate as standards of living increase and people improve their lives through access to education, job training, medical services, and economic development support. She encouraged the African Diaspora to help promote the benefits of doing business in Africa by speaking positively about their home continent noting Africa's abundance of natural resources, vast landscapes, and diverse cultures.
I had the opportunity to ask Ambassador Ali two questions: (1) What is AU's strategy for combating corruption and properly training local government officials to eliminate corrupt practices that often impede economic development and (2) what legal recourse do investors have to resolve business disputes? In responding to the former, Ambassador Ali noted that many African nations have taken significant steps to combat corruption, which is evident by the regular media reports discussing the latest arrests or convictions. The broad media attention on Africa's corruption, she explained, is not about a failed system, but representative of effective actions and policies aimed to eradicate corrupt practices. She also noted the adoption of the "African Union Convention on Preventing and Combating Corruption" in 2003 and ongoing collaborative efforts between the AU and the World Bank.
With respect to second question, Ambassador Ali said that many local and regional courts have the capacity of handling legal cases to resolve business disputes. Moreover, some parties have opted to seek arbitration or have their cases heard in jurisdictions outside of the AU. I prefaced my question saying that many American investors may take the risk of investing in Africa where infrastructure may be limited, but their concerns reside in not understanding the options available to resolve business disputes.
Having traveled extensively throughout Africa, I know the benefits the continent has to offer for investors. While Ambassador Ali is correct in listing energy, health care, mining, agriculture, transportation, and manufacturing as ideal business opportunities, I favor the opportunities that exist in information and communications technology. As I often discuss on this blog, ICT and specifically mobile communications are producing substantial financial returns for investors and making a social difference for all of Africa.
I commend Ambassador Ali for making Seattle her first U.S. destination outside of Washington, DC to promote the business opportunities that exist in Africa. It is important that other diplomats and government officials representing developing nations take a more proactive approach in attracting foreign direct investment. Feel free to contact me if you are interested in learning more about the investment opportunities that exist in Africa. I am happy to share my experiences of doing business in one of the world's most diverse markets.