Title: Sub-Saharan Africa: The next frontier for U.S. companies
Subtitle: Report on Business and Investment Opportunities in Sub-Saharan Africa
Published By: SkyPatrick Global Services LLC
Date: August 2014
Authors: Chris Braddock
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SkyPatrick Global Services LLC prepared this report as a high-level summary and brief outlook on the prospects and opportunities for U.S. companies to enter or expand in the sub-Saharan Africa market. This report was prepared after a four month trip through five key sub-Saharan African countries: Senegal, Cote d’Ivoire, Ghana, Nigeria, and South Africa. This report is a brief review of the opportunities and risks in sub-Saharan Africa, specifically the five countries recently visited. Many people simultaneously hear about the dangers, frustrations, and economic rise of sub-Saharan Africa, so this report tries to put both the opportunities and risks in an appropriate context.
Sub-Saharan Africa (SSA) consists of about 48 countries and includes some of the fastest growing economies in the world. SSA is full of contradictions, income disparities, and difficult to decipher business partners, but that is what makes it an interesting place to do business with the highest average returns on investment. In 2013, SSA had a combined GDP of $1.63 trillion. To put that into perspective, the U.S. GDP in 2013 was $16.8 trillion, China’s $9.2 trillion, India’s $1.9 trillion, Malaysia’s $312 billion, and Thailand’s $387 billion. The population of SSA is 937 million and growing rapidly, compared to 316 million in the United States, 1.4 billion in China, and 507 million in the European Union countries.
There are both tremendous opportunities and tremendous risks in Africa, so companies do need to understand the risks and work to mitigate them as much as possible. The risks, however, should not be overplayed or sensationalized as they often are, because that is what irrationally keeps many companies out of SSA. The upside of this is that since many companies, particularly U.S. firms, are still hesitant about SSA, the companies that are willing to explore the opportunities have reduced competition.
The report highlights some key characteristics, observations, and thoughts on SSA. The goal of the report is to give companies, particularly mid-size U.S. companies, a better understanding about SSA and give people contemplating opportunities in SSA a few ideas and concepts to consider.