A recent survey by Africapractice, an African strategic business consultancy, shows that business leaders on the continent have an overwhelmingly positive outlook for their prospects next year. An astounding 95% of those surveyed expect to expand their business next year, and 100% anticipate growth in the level of foreign direct investment in 2010. The only dark clouds they foresee are a lack of credit and a lack of talent. On this last point, however, help may well be on the way.
A business entrepreneur program called the African Diaspora Marketplace (ADM) has encouraged economic development plans from U.S.-based African expatriates to help 19 countries in sub-Saharan Africa. Out of a pool of 733 applicants in a competition for grants of between US$50,000 to $100,000, there are 60 finalists with proposals representing more than US$22 million in expatriate business investment to spur job creation in their native countries.
The ADM program is funded jointly by the U.S. Agency for International Development (USAID), The Western Union Company and the Western Union Foundation. Next month, 10-20 winners will be announced. This program is seen as a long-term investment in Africa’s future and perhaps a model for more successful, sustainable development initiatives for African countries.
“The finalists of the ADM competition represent the best of a new class of entrepreneur – those who are investing back in their home countries to create economic opportunity and reduce poverty and unemployment in sub-Saharan Africa,” said Alonzo Fulgham, Acting USAID Administrator.
Indeed, judging from the descriptions of the prospective businesses, these African expatriates have learned the U.S. market, and are keying their products to meet market demand. For example, Ayele Solomon from Ethiopia wants to begin a commercial honey wine production facility in collaboration with beekeeping cooperative farmers from his country’s southwest forests. His plans are definitely 21st century. Solomon wants to transform the traditional beehives to more modern ones that typically produce seven times more honey of a higher quality. He intends to extend to the cooperative beekeepers a share of the honey wine business and a share in the dividends. Moreover, he understands the importance for markets inside and outside Ethiopia to have consistently high quality.
AADT Consultants looks to establish a geotechnical laboratory in Liberia to produce information on the physical characteristics of soil and rock. This will enable study of the interactions between soil and structural elements for the design of foundations and structures to reduce structural failure due to unanticipated subsurface conditions. In a country like Liberia that is furiously engaged in reconstruction efforts, such information will be invaluable.
UBS Farm is already operating a fish farming/livestock operation in Nigeria’s Ogun State for more than two years, but they are seeking funding to expand production to meet growing demand for their services. UBS Farm provides training to local market women and advises other fish farmers on current technologies. In addition to acquiring equipment for feeding, flood prevention and water recirculation, UBS Farm wants to increase its knowledge base by adding to their current group of 10 experts in fish farming. The company is open to new ideas and management techniques to enhance its development and efficiency.
The common theme among many of these businesses is that they are not stuck in the old ways of doing business as so many currently successful African companies are. African consumers have purchased products and services from home-grown companies for years, but in a globalized economy, competition will come not from local firms but from modern companies from abroad that understand the latest in management and production techniques. Those African companies that fail to modernize will become non-competitive, and those who have fallen by the wayside already have taken too many jobs with them when they closed. Those who understand that the way to do business has evolved over time will survive to do commercial battle with all rivals.
This is why the ADM program is so critical at this time. The understanding of the home market, while also having knowledge about what advancements there are in business, will help Africa move forward into the 21st century more successfully than all the seminars and booklets we could ever produce. This has been a successful formula for Ghana, whose returning expatriates are known as “boomerangs.” They have helped jump-start Ghana’s economy, and the winners of the ADM competition can do the same for their home countries.