22 June 2005

Africa: Business Summit Aimed at Boosting U.S. Investment in Africa, Says CCA President

Photo: allAfrica.com/ Tamela Hultman
Assistant Secretary of State Constance Newman speaking at the US-Africa Business Summit

Washington, DC — The fifth U.S. Africa Business Summit, sponsored by the Washington, DC-based Corporate Council on Africa, opened in Baltimore, Maryland Tuesday night with a gala awards dinner. More than 2,000 people from 70 countries registered to attend the four-day event, the largest Africa-related gathering in the United States. Stephen Hayes, who has been CCA president since 1999, talked with AllAfrica in a pre-summit interview. Excerpts:

How is this summit different from the previous two?

We are emphasizing partnerships. We intend to build some really viable partnerships as a result of what comes out of the conference. We want every businessperson to walk away from the summit with potential partners. The fact is that U.S. business still hasn't significantly increased its involvement in Africa, to the extent that other countries have, and I think that we have to work on that.

What do you mean by partners?

Any African that means to sell to the United States is going to need a buyer or a partner on this side, and that is why a lot of the Africans are coming. We are having over a thousand from Africa. The United States, on the other hand - U.S. business people - need partnerships as well. So we will put legitimate businesses together. We are putting a lot of emphasis particularly on small and medium-sized businesses.

The event is trying to facilitate the interactions?

The fact is that networks really haven't been built. What we have done is to provide a forum for that to happen. The conference this time is more active - more "designed." For instance thanks to Oracle, you can contact anybody who has signed up. We haven't had that before. Registrants can scan the list and they can contact them immediately on email. And we have staff people dedicated to assisting the business people coming from Africa. If business people need to find a type of person, we work with them, encouraging them to do it on their own as much as possible, but helping them.

We just have to get more U.S. investment in Africa. So that is what we are trying to do. We are working a lot harder on the networking and building partnerships, trying to link sectors together, allowing our workshops to be more flexible. I think this is going to be our strongest conference yet, and I think we have had some pretty good ones.

What kind of country representation do you have?

All in all, close to seventy countries. We have a delegation from China registered, a delegation from Korea, a lot of different European countries - business people and in some cases governments. There are some Indian business people registering as well. So we are having a broader range than in years past, but it is still primarily a U.S.-Africa conference.

You say there isn't as much interest in Africa on the part of U.S. businesses as from European and, increasingly, Asian countries. To what do you attribute that?

I think the image of Africa is working against it. I do not think that business people understand Africa as an investment opportunity. I think it is seen as too difficult. And I think that one of the second major goals of this conference is to project a much more accurate, and in this case, a much more positive view of Africa. In our awards dinner, for example, we are honoring Carol Pinot for her film "Africa Open for Business." The business award goes to the Africa Channel - the first U.S.-based company to run 24-hour programming on and of Africa. Even though they are still technically a project - they intend to come out in July - we will use it as a premier. And the presidential award this year goes to Madagascar because a positive image is developing there: it is the first country to receive funding from the Millennium Challenge Corporation [a Bush administration development aid programme for countries meeting economic and governance reform criteria).

Another area we are really working on - we have brought in two people who have direct media experience. We are expecting about 200 media people. I think this could at least contribute to changing the consciousness of media people.

A lot of the problems are real. It is not that they are exaggerated. The wars are real, AIDS is real - but there is hope. For businesses, for a lot of people, there is hope. We are trying to be more activist; we are trying to project an image for Africa, and trying to show that there is far less risk than most people assume. Obviously you have got to pick and choose your spots.

Don't you think that most American businesses are unaware of the high returns on investment that are being realized in Africa?

Yes, you can get higher returns because of higher risks. So what we are going to do is reduce those risks. I hate to create the expectation of high returns; I'd rather have the expectation of long-term returns, long-term investment, rather than a quick in-and-out.

You picked Madagascar to acknowledge because they have taken a number of reform steps, and it is the first country to be approved for MCC funding?

Yes. The projects are innovative; they are working hard. I also think it is a way of encouraging and recognizing the achievements of the president. Madagascar is a long way from the United States. So if we can show that there is a critical mass that supports where he is going, I think we could help Madagascar out.

And there will be a number of workshops?

We have fifty-two workshops. We have tried with a fairly high degree of success this time to limit the number of panelists, so there is more time for questions. We have also set up a networking time. And what is going to be different from any other conference, we have thirteen different site visits around the Baltimore area. It is not for tourism. The point is to ask how this site affects your business. So, for instance, the tour of the Port of Baltimore is for the people who are involved in ports - primarily trade ministers or ministers responsible for ports and transportation, so they can see how a port could work, what a port could be.

We also have a track with ten small businesses, so participants can see how a small business works here, what the problems are, how can they work with you. And we have given special rates for one day for Baltimore businesses so they can come and work with the African businesses. We also have a track to the University of Maryland Institute of Human Virology to look at the AIDS issue. There is a visit to the Baltimore Zoo, not as a tourist attraction, but to look at conservation. I think it is really an effort to open the eyes of Africans to the possibilities, and same thing for Americans to see the possibilities. We came to Baltimore thinking that if we could get a city and a state actually committed, beyond the usual occasional trade mission, we could show that a city and a state could benefit significantly from trade with Africa. I don't think saying it from Washington does the job. I am not sure people listen. The state of Maryland has really been committed to this. The lieutenant governor has cancelled his trip to Israel to be here. The governor is committed to several events, and we have a whole state department of economic development working with us on this. Local businesses are looking at how they make linkages, have follow-up meetings. That is different from anything that we have done before.

You have African heads of state taking part.

We had eleven presidents and prime ministers indicating that they would participate at some point in the conference. We have a presidential forum we expect to be broadcast by Maryland Public Television and CSPAN. But we're trying to downplay speeches to put a lot more substance and networking into this conference. We're not having sessions like the breakfast plenaries of the past, where one African or U.S. government person after another would speak. If this is a business conference we need to get more business views and more business reaction. We've brought in professional moderators for panels and are building in more interaction. A lot of people in government don't have business experience, and they can learn from being on panels with business representatives. So we have tried to put business and government representatives together in panels.

Which areas do you think American companies are interested in or could be interested in?

We have put a lot of emphasis on recruiting agriculture companies from the United States to this conference. I've always been critical, too critical at times, that AGOA {the African Growth and Opportunity Act] puts too much emphasis on apparel and not enough on issues like agriculture. I think that's changing. So agriculture is one area, telecommunications is another, infrastructure is another.

I still think tourism represents an opportunity. We still may be two to three years away from the U.S. discovering African tourism There is still not enough American hotel interest in Africa. I think it's a phenomenal market if we could find the right way to market it.

And the reality is that, like and or not, health is another issue. We can look at it in connection with Aids, or we can point to the need to increase health services and to provide health services throughout Africa, which is important with or without Aids.

Agriculture, health, financing, small-business development - those are the four major themes we're trying to hit with the plenaries supplemented by panels. We've got four workshops plus a major plenary on financing, because I think that's absolutely vital to Africa. Financing simply hasn't been available for investments, because the American financial sector has been unwilling to see Africa except as a risk, so there is not sufficient financing available for those who do want to invest. We've really been working on how you increase the capital flows to Africa; how you increase the financial guarantees to businesses wanting to invest in Africa; how you increase financing for small business. What we are trying to do, psychologically, is generate the public-private dialogue and corporation. I think that's missing in this country. Aid is obviously important, but I think business development, entrepreneurial development, trade are far more important.

The problem is that the corporate sector involved in Africa is primarily extractive. It's not a problem per se, but the extraction industry is not going to change Africa. Once the minerals are out, they're gone.

Those reluctant to invest in Africa, when you talk to them, what do they say are some of the reasons?

I think that the biggest problem is lack of transparency. I think that if investors knew that laws were consistent and fair they would be far more likely to invest. I think that you need an independent central bank. You need an independent judiciary and a responsive government. I think that if you have those then I think that people can operate. I think that they can take risk and I don't think they'll be looking to have their risk protected so much as long as they know they can have a fair opportunity to compete.

Change isn't going to happen overnight, but as I've said many times, I'm not sure that I would wish a U.S. style democracy on anyone. But I think there's a broad range of very good systems that could work in Africa.

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