Monday, December 24 2012
Generally speaking, 2012 was a great year for business in West Africa, particularly in the sectors targeted by the USAID West Africa Trade Hub. Successful conferences brought hundreds of shea and cashew stakeholders together, leading directly to important deals that are creating jobs.
The first Borderless Alliance conference, held in Abidjan in May, led to a surge in efforts to increase trade – and the Alliance, which had just six members in April today has more than 50. From Oct. 1, 2011 to Sept. 30, 2012, the USAID Trade Hub facilitated almost $70 million in exports and roughly $33 million in investments.
Confidence is high for 2013, too. In a simple survey of about 20 companies, more than three quarters are expanding in the coming year – and none expects to cut employees. While it was not a random sample, the survey’s results (see graphic) are nevertheless a good indication when complemented by USAID Trade Hub staff reports. The staff works with hundreds of companies across the region and is in daily contact with company managers, suppliers, banks, transporters and others that make trade happen.
Do you agree that doing business is getting easier in West Africa? Do you expect to do more business or less in 2013? We'll update the survey in January's edition - answer 14 questions (takes about 5 minutes!) to help us best reflect how business is feeling as 2013 starts!
“Business in West Africa will continue to expand in 2013 – confidence remains high among many people in business,” said Byron Battle, director of the USAID Trade Hub. “We have scanned the horizon and found a mainly bright outlook for the coming year.”
What do you think? Post your comments at the end of this article or send us jlamport [at] watradehub [dot] com (subject: 2013%20trends%20to%20watch) (an email). We'll post the most interesting responses in our New Year's edition!
Given how vast the region is and how diverse, both optimism and pessimism find roughly equal justification. Here is a summary of key trends.
Continued improvements in transport and logistics. We expect that the trend of reductions in delays and bribes along primary corridors will continue as Borderless Alliance advocacy efforts continue apace, building momentum in February at the Alliance’s annual conference. The key question: will policymakers push for greater liberalization of the trucking sector?
More and more business. Trade and investment will continue to grow for many reasons: return on investment in West Africa continues to be very attractive to international investors; improvements in doing business, including measures undertaken by governments and private sector initiatives, will continue to pay off with broader improvements in doing business.
In particular, regional trade will surge. As private sector-led efforts to reduce trade barriers gain traction – and the middle class in West Africa continues to grow – regional trade is set to increase significantly. Importantly, major efforts will address regional integration in West Africa, and a compelling call to action by the World Bank in 2012 is galvanizing efforts. The salient fact is that Africa’s food needs are only increasing – African farmers can respond if regional trade barriers are eliminated.
If Africa-optimism is in vogue, skeptics can point to threats to food security and conflict to temper it. USAID Trade Hub sector experts and consultants agree, however, that the reasons for optimism outweigh those for pessimism.
Lending to small and medium enterprises will continue to improve. Non-traditional sectors offer banks tremendous space for growth – they are discovering that and the opportunities are selling themselves. Banks are expanding and know that there is a huge untapped pool of opportunity in non-traditional sectors.
International buyers are more and more aware of West Africa as a destination – not just to source products but to set up shop. They are looking for – and finding – the talented young professionals who make West African cities like Abidjan, Accrra, Dakar and Lagos sizzle with energy.
Information technology will continue to open up a world of opportunities for entrepreneurs. Africa by dint of different perspectives and experience is innovating in IT unlike any other part of the world. New applications are not only transforming how business is done but how society functions – and how the rest of the world experiences the different countries in West Africa. The price of bandwidth will continue to fall and the number of people with access to the web will only increase. More people in Africa have mobile phones than in Europe or North America – the use of mobile phones will continue to decrease costs for business and open up new opportunities.
Popular culture is bubbling - as it always, and making big international impact. In music, the global profile of Nigerian pop singer D’Banj continues to grow, with high-profile fans like American superstar Kanye West championing him overseas. Ghana’s azonto dance movement has swept both the region and the world, with rapper Sarkodie emerging as a figurehead with a growing international audience. In Senegal, music took a more activist turn this year: the Y’en A Marre opposition movement, which successfully campaigned for a change of President in the 2012 elections, was mainly fronted by popular rappers such as Thiat and Fou Malade. Another outcome of the Senegalese election was the elevation of musical icon Youssou N’Dour (who had at one point sought to run as an opposition Presidential candidate himself) to the post of Minister of Tourism and Culture. A tragic counterpoint to the region’s otherwise flourishing musical year was the rise of Islamic extremism in northern Mali, where radical Islamist groups banned all music along with many other manifestations of Mali’s rich cultural heritage. But this is the exception: overall, 2012 made clear that entertainment in West Africa is not merely an accessory to economic development, but a thriving industry in and of itself which is introducing a growing number of people across the world to an entirely new image of Africa. Alongside music the West African film industry, particularly Nigeria’s Nollywood, continues to enthrall millions regionally and worldwide.
The region's demographics portend big changes. Developers in Lagos and Dakar and Accra are not building shopping malls to reach people with the cheapest imported goods – in fact, the prices are pretty high. They are catering to a growing middle class that has a taste for branded goods. A larger middle class means more than changes in consumer spending habits, though – it also means stability and, according to some commonly held beliefs, improvements in governance and public services.