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Thursday, June 5, 2014

U.S. readies investment push in to Africa

By Bradley Shore
U.S. investment in Africa
U.S. international investments rose dramatically after 2002

The United States of America is apparently planning a ‘trade and investment offensive’ to drum up business opportunities for American companies in Africa in response to China’s years of rapid expansion throughout the continent, according to the Financial Times.

The US involvement in African investment has fallen in relation to China and other emerging countries, caused partially by a long decade of continued conflict on the Middle east in which American forces have been heavily involved.

The Financial Times reports that The White House has dispatched three senior trade and economic officials to the continent this month to begin talks on how best to strengthen the US’ economic position in African markets.

A senior US government official who wishes to remain anonymous has told the FT that “there is clearly a sense of opportunity in Africa and the US government is embracing that. We see it [Africa] as a real source of opportunities.”

The first US-Africa business forum has also recently been announced by the US government, it is hoped that this will help to strengthen trade and financial ties with the region. US officials say that the forum will gather dozens of chief executives from African and American companies and will take place on the eve of President Obama’s White House summit with the leaders of more than 50 African countries.

China has managed to build extremely close business relationships with its African partners, according to the African Development Bank. This has apparently been made possible by the country coupling trade with very high levels of investment. Beijing has also helped by providing African countries with credit lines worth billions of US dollars.

Many nations with growing and newly emerging economies have also decided it is in their best interests to invest heavily in the continent during the past decade, as western countries have lagged behind, due in part, to the global recession.

Whilst American-African trade has more than doubled in the past decade to $110bn in 2013, the Chinese-African trade has surged phenomenally from a measly $10bn in 2000 to more than $200bn last year, making China the largest trading partner of the African continent.

With investment interest from Asia particularly high, Japan is also extending its commercial and investment ties with Africa and attempting to move away from its traditional focus on aid. Shinzo Abe made the first visit from a Japanese prime minister to sub-Saharan Africa in over eight years, in what Tokyo referred to at the time as a “trip to support Japanese companies’ investments to secure important national resources in the region”.

In Europe, countries such as the UK, Germany and Italy have joined the scramble to secure infrastructure contracts as well, according to investment experts and government officials.

Sub-Saharan Africa is expected to grow at least 5 per cent this year according to the IMF, thus making it the second fastest growing economic region in the world, only slightly behind the developing regions of Asia, which include India, China and Pakistan.

About the author: Bradley Shore is an experienced travel and investment blogger whose main interests are Property and investment; he likes to write about different alternative investments as you can see in his recent work for Emerald Knight. He would one day like to run his own investment website.

All Statistics and quotes obtained from www.ft.com
Image license: MartinD, CC BY-SA 3.0