“The darkest thing about Africa has always been our ignorance of it.” George Kimble, early 20th century geographer.
An innovative study announced this week in Johannesburg will look at two sets of opinions as to why multinationals are not investing rapidly in Africa.
The first part of the groundbreaking study will involve interviews with top executives of US-based multinationals to find out why they have reservations when it comes to investing in Africa. The second part of the study will see the findings of the first being put to policy-makers such as ministers of finance and planning, and also to senior civil servants on the continent. Leaders of international organisations involved on the continent will also be asked for their feedback on the findings.
The study is being conducted by Baird's Communication Management Consultants (Baird's CMC), an international communication management consultancy, in partnership with the US Chamber of Commerce in Washington DC.
The study will be just the first in a series that the company will carry out in the future on the subject of the investment and policy relationships between the developing world and its potential investment partners.
The study could be a first step to understanding the policy changes required to normalise US investments in Africa, says Daeman Harris, Vice President International Division, Middle East and Africa, of the US Chamber of Commerce. “We want to get to the bottom of the issues that either encourage or dissuade US investors from [investing in] the continent. This unprecedented study will articulate both the complexities and opportunities seen by the US business community as they weigh decisions to enter into African markets. We want this survey to serve as a point of departure for a new and dynamic dialogue between both US and African entrepreneurs and their government counterparts”.
It is essential that the views expressed by the US business leaders are frank and do not sugarcoat the pill – no matter how bitter it may be – so the actual contacts will be in the form of confidential interviews with guarantees of no attribution in order to ensure the information obtained moves beyond public rhetoric. The study framework is therefore designed to bring to the surface private corporate investment conversations that rarely see the light of day in public forums. Then African policy-makers will be engaged with the aim of ascertaining what policy changes will be required to satisfy investors' concerns and conditions for improving investment from US multinationals, and to get a realistic assessment at to whether the changes are likely or even realistic. A panel of senior, experienced interviewers will conduct all the interviews.
An aim of the study partnership is also to bridge the knowledge-gap in the global discourse between governments on how to increase trade and investment in the continent. “The notion of an African century has become almost axiomatic in any discussion about trade, investment, development and good governance on the continent, but it has not yet translated into sustained investment growth across the continent,” says Mark Chataway, Baird's CMC co-chairman.
Policy-makers often get sugarcoated views in public meetings, but according to Harris, “The goal is to contribute to economic growth in Africa, by helping policy-makers to focus on frank private views, as opposed to the polite public conversations. We hope that the outcome of this study will be a more productive engagement by US business and African policy makers, to improve investment in Africa,” he said.
He believes that international investment and trade is redefining the global economic landscapes, but that the commercial relationship between the US and Africa has yet to develop into a truly successful partnership.
“I hope, however, that independent intelligence on the opportunities in Africa and the many, different obstacles that hinder its progress could begin to transform this partnership.”
Francois Baird, Baird's CMC co-chairman, believes the research will identify some misconceptions that continue to create barriers and produce surprises, "We will be considering systematically the attitudes of African leaders – both policy and decision-makers – with a view to addressing these barriers and perceptions. Usually, people just try to discern their responses by trawling through speeches,” he said.
The results of the study will be published next year and discussed in a public forum with senior business and government leaders. The aim will be to foster convergence between what African politicians and policy-makers are willing and able to do, and what US business needs to invigorate its investment in Africa.
There is a need to understand the invisible barriers to investment in Africa and the study will be the basis for a more productive global discourse about the priorities for advancing the African century and how to increase trade with the continent.
* International trade and investment has redefined the global economic landscape, bringing capital to markets around the world, but the commercial relationship between the US and Africa has yet to develop into a truly successful partnership.
* Already well into the first decade of the African century, foreign direct investment in Africa still lags behind the rest of the developing world, while questions are being raised about the achievability of the Millennium Development Goals.
* The question is whether the current rush by China, India and other emerging economies for Africa's bountiful natural resources would herald a sustainable, new economic frontier.
* A plethora of forums have formed around these issues; each attempting to search or to analyze the many theories and scenarios, to find answers as to why this rich and complex continent remains elusive to goals that would lift it from what seems interminable economic obscurity.
* The public forums and discussions between government and business are by their nature, hedged with vested interests and calculations which makes it difficult to reveal the unvarnished motivations for investment and policy decisions.
* The African Review study is designed to collate views expressed in private conversations with corporate investors in the US, and then to engage African policy-makers on these views in order to ascertain the opportunities to satisfy the concerns and conditions for improving investment from US multinationals.
* It will focus on qualitative research in two parts – first with business, and then with political and policy-making leaders; all this will be conducted by experienced interviewers in confidential sessions with authoritative intermediaries.
* A review panel comprising senior experts and experienced business consultants will guide the study. They will provide direction to the questions and the scope of the study, and will bring the value of their experience and perspective to the interpretation of the study results. They will contextualise the findings and help the research team understand the implications of the same for the African century, thus ensuring that the study fully lives up to its rich potential.
* The study will also engage US business leaders on the reasons that have encouraged them to invest in Africa, or discouraged them.
* If this study is successful, then others will look at the relationship between Africa and other regions.
* To achieve its objective, the respondents will be anonymous. In addition, no comments will be for identified attribution, to allow respondents to speak freely.
The partnership is a timely initiative, coming over five years after the US Africa Growth and Opportunities Act (AGOA) was launched to provide tangible incentives for African countries to continue their efforts to open their economies and build free markets.
* US Chamber of Commerce
The US Chamber of Commerce is the world's largest business federation; representing more than three million businesses of all sizes, sectors, and regions. It includes hundreds of associations, thousands of local chambers, and more than 100 American Chambers of Commerce in 91 countries.
* Baird's Communication Management Consultants
Baird's CMC is an international communication management-consulting firm, operating from nine countries with 25 partners employing over 400 people. The company has implementation partners in over 50 countries and is represented in Washington DC, New York, London, Newport (Wales), Paris, Frankfurt, São Paulo, Johannesburg, Harare, New Delhi, Mumbai and Amman in Jordan. Its global research practice has interview panel members in 42 countries. The partners in Baird's CMC are majority owners of other consultancies including Baird's Renaissance (South Africa), Baird's USA, the Cooney Waters Group (USA), Fundamento (Brazil), Hyderus (UK), Imprimis (India) and Perfect Relations (India).
* A summary of the results of the study will be discussed in a forum with senior business and government leaders, to foster convergence between what African politicians and policy-makers are willing and able to do and what US business needs to do to reinvigorate investment in Africa.
* Provide focus on the unique requirements of specific segments like US business to make the outcomes useful for business and government.
* Business will get clear guidance on what policy makers are willing and able to do, and politicians and policy-makers will get a clear idea of what US business really want.
* To understand the policy changes required to normalise US investments in Africa.
* To provide facts about the potential to satisfy the true concerns and requirements for improving investment from US multi-nationals.
* To contribute to economic growth in Africa and to help policy makers to focus on the real private issues, as opposed to the polite public conversations.
* The result of the study will be announced early in 2008.
