Normally, international companies would avoid investing in Africa because of reports of official corruption, unsafe business environments and poor and discouraging government policies. But all that is beginning to change, even if gradually.
In recent times, several African governments and organizations have adopted initiatives which include strategies to eliminate these concerns and reduce poverty in the land by enacting policies that promote investments. As the cloud of COVID ‘19 begins to clear, the third quarter of 2021 and beyond has been projected to portend a tremendous growth opportunity between the United States of America and African countries.
During this decade, consumer spending in Africa is projected to reach $2.5 trillion. More than 20% of this spending will occur in Sub-Saharan Africa, including Nigeria and countries in South Africa and East Africa. The continent is also experiencing mass urbanization which in turn increases consumer spending.
At the centre of these developments is the African Centre for Economic Transformation (ACET). ACET is an organization that specializes in formulating policies and it is working to transform Africa’s economy into a sustainable, long-term market-opportunity. The organization conducts research, develops policies and advises African governments. The board of directors, management and senior staff of the organization are made up of a diverse set of employees, many of who operated as executives for the World Bank, United Nations and other government institutions.
ACET strives for both economic growth and DEPTH.
E: Export competitiveness
P: Productivity increases
T: Technological upgrading
H: Human well-being
ACET successfully operated in Rwanda with the creation of the African Transformation Forum (ATF) designed to enable specialists exchange information and effectively develop policies and procedures.
As far as Africa is concerned, an improvement in manufacturing sector will be a significant part of creating and promoting a safe, reliable and sustainable economy which will in turn attract international investors, create jobs, and reduce global poverty. African countries which expand their scope in manufacturing will generate more reliable jobs and reduce the level of poverty in Africa and around the world.
The U.S. government has, therefore, embarked on several policies which will promote the development and transformation of economies in Africa, such as the African Growth and Opportunity Act (AGOA). AGOA provides African countries with the capability to participate in business transactions with the U.S.
For Sub-Saharan African countries to be granted access to this opportunity they must institute the process of establishing the following:
- Free Enterprise Economy: The economy must enforce property laws, limit the ability of government to manage the economy and utilize an open trading structure.
- Rule of Law: The law must treat all citizens equally. All citizens must have a right to judicial hearing as well as fair trial.
- African countries must also allow for the diversity of political opinions, interests and lifestyles to coincide.
- Remove limitations on U.S. Commerce: African governments must safeguard intellectual property, conclude trade debates and support foreign ventures.
- Reduce Poverty: Countries must pass legislation to eliminate poverty in respective regions. This includes improving healthcare, developing education systems and upgrading infrastructure.
- Eliminate Corruption: African officials must enact policies or implement task forces to eradicate corruption and bribery.
- Establish Workers’ Rights: Countries must limit the hours of work per day and establish a minimum wage structure for all workers
- And government and the private sector must standardize safe working conditions.
This list of requirements gives African countries incentive to encourage manufacturing and transform economies in a reliable and business-friendly environment. This will generate more business opportunities for international companies, stimulate economic growth for the continent and reduce the level of poverty in African countries particularly, and the world at large.
Currently, 38 of the 54 countries in Africa are eligible for opportunities provided by AGOA. The U.S. government aims to increase the number of countries eligible for these services and further promote the transformation of the economies of African countries. The role of manufacturing in Africa can be measured in many different ways. A significant data metric includes the increasing number of media outlets covering the African industry sector and the membership of the Manufacturing Media Consortium, now numbering more than 8,000 members.
In 2020, more than 200 media contacts throughout Africa joined the organization which will be holding events in late 2021 and throughout 2022. The need, therefore, to highlight the progress of the African continent in the industry sector should be on everyone’s agenda. Africans must learn to keep an eye on their industrial space.