Inside the Boardroom: How Corporate America Really Views Africa
About the Survey
The Conversation Behind Closed Doors is a two-part, qualitative survey conducted by Baird's CMC in partnership with the U.S. Chamber of Commerce.
Part one, The Corporate Conversation, is an inside-the-boardroom survey of attitudes toward corporate investment in Africa among leading U.S. corporations. The information was gathered during a series of behind closed door interviews. All interviews took place from January to November 2008 and were conducted in person by senior associates of Baird's CMC. This document presents the findings of part one.
Part two, The Public Sector Conversation, will be conducted over the next several months. It is is an inside-the-government survey of the responses set forth in part one.
Participants
Top management decision makers in 30 leading U.S. multinational corporations participated. A majority were executives of U.S. Fortune 100 corporations.
Industries Represented:
•Aerospace/Defense
•Agribusiness
•Consumer Goods
•Health Care
•Information & and Communications Technology
•Infrastructure
•Media
•Petrochemical/Extractive
•Pharmaceutical
•Transportation
Confidentiality
All responses are anonymous and are not attributable to individual participants.
Study Design
The research practice of Baird's CMC adheres to the rules of The European Society for Opinion and Marketing Research (ESOMAR). ESOMAR is the world organization for enabling better research into markets, consumers, and societies. The survey was governed by a review panel comprising representatives from the U.S. Chamber, Baird's CMC, and independent organizations.
This survey examined the reasons why U.S. companies hesitate to invest in Africa. It also looked at what American businesses and African countries can do to increase U.S. investment across the continent.
About the U.S. Chamber of Commerce Africa Business Initiative
The mission of the Chamber's Africa Business Initiative is to engage the U.S. business community on policies that foster foreign direct investment in Africa, to facilitate trade between the United States and African countries, and to educate the U.S. business community about the continent's economic opportunities.
The U.S. Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region; as well as 112 AmChams in 99 countries around the world.
About Baird's CMC
Baird's CMC is an international communication management consulting firm, operating in 11 countries with 28 partners employing over 400 people. Baird's CMC is represented in Washington, D.C., New York, Johannesburg, Gaborone, Harare, New Delhi, Mumbai, São Paulo, London, Newport (Wales), Paris, Berlin, Moscow and Warsaw. Its global research practice has interview panel members in 42 countries.
Overview
Africa is the world's second largest and second most populous continent after Asia, with a population nearing 1 billion. It accounts for 14% of the world's population. More than
1,000 languages are spoken across its 53 countries. In addition, Africa covers 20% of the world's total land area and contains about 30% of its mineral reserves.
African governments have indicated a willingness to create investment-friendly environments for FDI, and U.S. multinational corporations would typically be expected to take advantage of such environments to invest and grow their businesses in Africa. So why has Africa not attracted more interest from the U.S. business community?
Key Findings
U.S. executives point out that Africa is only one of many possible destinations that American corporations consider for investment. Investment is highly competitive, and many countries are vying to become the destination of choice for capital. That said, U.S. companies in some sectors, particularly technology, now regard Africa as the last frontier for growth. These companies believe that Africa, with its market of about 1 billion people, can no longer be ignored. Even with this interest, Africa faces tough competition and huge hurdles to attract U.S. investment.
Globally, competition for American FDI is high. Countries from all regions showcase their advantages, align their offers to U.S. needs, clamor for attention, and invest in their own countries to attract additional investment. Consequently, U.S. corporations do not lack investment choices, and they rarely consider African nations.
Further, news about Africa is mostly about chaos and unrest. Africa is not active or aggressive enough about attracting investment; the voices of the few countries that are making an effort get lost in the surrounding negative noise. Some African countries are making special efforts to assist foreign companies that invest. For example, Nigeria's president regularly engages with the local leaders of foreign companies to help cut through bureaucratic tape.
U.S. corporations need a strong and specific draw from Africa to make investment worthwhile. This can be the pull of a big market or a big source of critical raw materials or a belief that there is a competitive advantage to early entry into African markets. The survey data show that few of these pulls exist or are not sufficiently strong to be effective in the near term.
Investment -- Five Influencing Factors
This survey reveals that five factors influence the decision of U.S. corporations to invest in Africa:
•Rule of law -- A strong consensus exists among the respondents that the rule of law does not prevail to the degree required to make Africa an attractive investment destination. This applies to corporate, societal, and criminal law.
•Attraction -- Africa does not offer a sufficiently large middle class of consumers or show consistent economic growth that could promise a future market. Most African countries are small and have poor markets, and there are barriers to regional markets -- such as taxes and the freedom of movement of people and goods. However, Africa does offer enormous natural resources and that is an attraction.
INSIDER'S VIEW
"We look at the spending power of the country, its political stability, and the corruption index." Continued
The Conversation Behind Closed Doors is a two-part, qualitative survey conducted by Baird's CMC in partnership with the U.S. Chamber of Commerce.
Part one, The Corporate Conversation, is an inside-the-boardroom survey of attitudes toward corporate investment in Africa among leading U.S. corporations. The information was gathered during a series of behind closed door interviews. All interviews took place from January to November 2008 and were conducted in person by senior associates of Baird's CMC. This document presents the findings of part one.
Part two, The Public Sector Conversation, will be conducted over the next several months. It is is an inside-the-government survey of the responses set forth in part one.
Participants
Top management decision makers in 30 leading U.S. multinational corporations participated. A majority were executives of U.S. Fortune 100 corporations.
Industries Represented:
•Aerospace/Defense
•Agribusiness
•Consumer Goods
•Health Care
•Information & and Communications Technology
•Infrastructure
•Media
•Petrochemical/Extractive
•Pharmaceutical
•Transportation
Confidentiality
All responses are anonymous and are not attributable to individual participants.
Study Design
The research practice of Baird's CMC adheres to the rules of The European Society for Opinion and Marketing Research (ESOMAR). ESOMAR is the world organization for enabling better research into markets, consumers, and societies. The survey was governed by a review panel comprising representatives from the U.S. Chamber, Baird's CMC, and independent organizations.
This survey examined the reasons why U.S. companies hesitate to invest in Africa. It also looked at what American businesses and African countries can do to increase U.S. investment across the continent.
About the U.S. Chamber of Commerce Africa Business Initiative
The mission of the Chamber's Africa Business Initiative is to engage the U.S. business community on policies that foster foreign direct investment in Africa, to facilitate trade between the United States and African countries, and to educate the U.S. business community about the continent's economic opportunities.
The U.S. Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region; as well as 112 AmChams in 99 countries around the world.
About Baird's CMC
Baird's CMC is an international communication management consulting firm, operating in 11 countries with 28 partners employing over 400 people. Baird's CMC is represented in Washington, D.C., New York, Johannesburg, Gaborone, Harare, New Delhi, Mumbai, São Paulo, London, Newport (Wales), Paris, Berlin, Moscow and Warsaw. Its global research practice has interview panel members in 42 countries.
Overview
Africa is the world's second largest and second most populous continent after Asia, with a population nearing 1 billion. It accounts for 14% of the world's population. More than
1,000 languages are spoken across its 53 countries. In addition, Africa covers 20% of the world's total land area and contains about 30% of its mineral reserves.
African governments have indicated a willingness to create investment-friendly environments for FDI, and U.S. multinational corporations would typically be expected to take advantage of such environments to invest and grow their businesses in Africa. So why has Africa not attracted more interest from the U.S. business community?
Key Findings
U.S. executives point out that Africa is only one of many possible destinations that American corporations consider for investment. Investment is highly competitive, and many countries are vying to become the destination of choice for capital. That said, U.S. companies in some sectors, particularly technology, now regard Africa as the last frontier for growth. These companies believe that Africa, with its market of about 1 billion people, can no longer be ignored. Even with this interest, Africa faces tough competition and huge hurdles to attract U.S. investment.
Globally, competition for American FDI is high. Countries from all regions showcase their advantages, align their offers to U.S. needs, clamor for attention, and invest in their own countries to attract additional investment. Consequently, U.S. corporations do not lack investment choices, and they rarely consider African nations.
Further, news about Africa is mostly about chaos and unrest. Africa is not active or aggressive enough about attracting investment; the voices of the few countries that are making an effort get lost in the surrounding negative noise. Some African countries are making special efforts to assist foreign companies that invest. For example, Nigeria's president regularly engages with the local leaders of foreign companies to help cut through bureaucratic tape.
U.S. corporations need a strong and specific draw from Africa to make investment worthwhile. This can be the pull of a big market or a big source of critical raw materials or a belief that there is a competitive advantage to early entry into African markets. The survey data show that few of these pulls exist or are not sufficiently strong to be effective in the near term.
Investment -- Five Influencing Factors
This survey reveals that five factors influence the decision of U.S. corporations to invest in Africa:
•Rule of law -- A strong consensus exists among the respondents that the rule of law does not prevail to the degree required to make Africa an attractive investment destination. This applies to corporate, societal, and criminal law.
•Attraction -- Africa does not offer a sufficiently large middle class of consumers or show consistent economic growth that could promise a future market. Most African countries are small and have poor markets, and there are barriers to regional markets -- such as taxes and the freedom of movement of people and goods. However, Africa does offer enormous natural resources and that is an attraction.
INSIDER'S VIEW
"We look at the spending power of the country, its political stability, and the corruption index." Continued
