To start off this blog officially, Global Business Approach Inc wants to bring to attention a continent that is worthy of a second look; Africa. In particular Sub-Sahara Africa.
Over the past several years, there have been lots of good news about the continent of Africa. During the 1980s and 1990s, Africa was known for instability, war, famine, and over all, tragedy, and rightfully so. Even prior to the 1980s, Africa was not an easy place, but at the start of the 80s the situation deteriorated badly. Governments became either unstable and broke down, or, unimaginably corrupt. There were much fighting and civil war, indeed Africa was known as the paradise for mercenaries – especially since few African governments could afford standing armies. This instability lead to widespread destitute poverty for the majority of the population, and epic famines, as those around remember the Ethiopian and Somali famines. Most people in Sub-Sahara Africa lead bleak lives, and certainly no foreign business would consider investing in Africa.
Today, Africa is among the leading regions in growth and wealth creation. Somalia has 2G cellular services, Ethiopia has been posting double-digits growth for the past several years. New businesses are starting, the once virtually non-existent middle class is now the fastest growing in the world. Creative and innovative entrepreneurs have come up with ingenious solutions to work around the lack of technology infrastructure in Africa. The GDP of Africa is expected to rise from today of $2.3 trillion to $29 trillion by 2050! Some are even predicting Africa will be a future breadbasket to the world! So much news of growth and positive development have been coming out of Africa, Time and The Economist, two magazines with very disparate political leanings, both chose “Africa Rising” as cover stories for issues of their publications.
So what happened, how did this transformation occur? Two events were set in motion at the turn of this century that changed the course and fortunes of Africa, one well-known, the other lesser known. Firstly, China, in search of badly needed resources for its industrial and economic growth, finding difficulties accessing existing markets, had to turn to Africa and its rich resources. From a trickle in 2004 to $200 billion in trade, Chinese investments have fueled growth. Additionally, due to lack of infrastructure in Africa, China has financed billions worth of infrastructure projects including ports, roads, railroads, airports, schools, and hospitals. The other lesser known, behind the scenes has been the US military’s Africom program, which has been providing on going training to various African governments. This has provided African armies a degree of professionalism, has increase stability in the region. This in turn has undoubtedly improved stability for East Africa. Most notably, the extremists in Somali cities were driven out by African Union soldiers without direct outside help, due in part of their extensive training from Africom. The Africom programs don’t get nearly as much publicity as China’s involvement in Africa does, but nonetheless it has had a significant positive influence on Africa.
To be certain, it is not all roses in Africa. There are still instability problems, massive government corruption, and more recently, religious extremism is on the rise. Both financial and government institutions need reform, if they exist at all in a particular country. Infrastructure is still lagging way behind the rest of the world. And there is a severe wealth gap in spite the growing middle class. Any approach to Africa must take those factors into account.
If your business is looking for new markets, consider taking a second look at Africa, it’s not the bleak, destitute, and violent continent as it used to be. Stay tuned as we go in depth about Africa in future posts.
Image credits to Time and The Economist.