Steve's November President's Message

25 November 2015
press release

I was recently in Chicago on a panel with Gayle Smith, Director-designate for USAID and Dana Hyde, President of the Millennium Challenge Corporation. The panel was moderated by Ambassador Johnnie Carson, immediate past

Assistant Secretary of State for Africa, and generally regarded in Washington as one of the premier experts on Africa. The audience was largely of the diaspora in Chicago, students and businesspersons from Africa. The diversity of nations represented was impressive. I counted at least 30 African countries represented. The program was organized by U.S. Senator Richard Durbin, who is one of the more committed senators on U.S.-Africa relations. Remarkably, Senator Durbin sat through the entire program from 8:30 a.m. to 1:00 p.m. Seldom does one see a U.S. Senator in his own seat that long.

There was the usual talk of U.S. business missing out on Africa, and there is quite a bit of truth to that, but there is also the continuing factoid (an item that seems like a fact but is not quite a fact) that U.S. business is unaware of Africa. It was pointed out that hardly any U.S. IT companies such as Verizon or AT&T were in Africa, and essentially the cell phone industry has been ceded to China, Europe, India and South Africa. There is truth to this, but it is not because the U.S. cell phone industry is not interested in Africa. Timing is everything, and sometimes it is not as important to be the first into new territory but the second. The truth is that Motorola, Verizon, Southwestern Bell and Africa One, all U.S. companies engaged in the cell phone industry were early members of CCA. They were the pioneers advocating cell phones in Africa as the world entered the third Millennium A.D. None, with the possible exception of Motorola, are engaged in Africa at this time. What happened?

As pioneers, each of these companies were ahead of the trends. They also may have been used to going it alone, as they had built their American empires, but Africa was at a point of change as well. As Gayle Smith and Johnnie Carson pointed out in Chicago, there are more democracies in Africa now than fifteen years ago, a growing middle class in key markets, and changing legal structures that are only becoming more understood now than they were fifteen years ago. A growing middle class also means a more discerning marketplace.

I cannot speak to the details as to why each company withdrew from the African marketplace, although they had exactly the right product to sell. They were about five to eight years ahead of the boom in the largest growth of cell phone usage in the world. They also generally were without reliable partners on the ground, and they had some verbal support from our government, but little coordination and financial support. When China entered the cell phone market they had an active sales force within their embassies and had financing available to Chinese companies. They also hit the crest of the wave of cell phone usage. But it was not China alone that benefitted from the boom in cell phone usage. Cell phones became the primary instrument that Africans themselves could use to get around the bureaucracy, could reach one another in the face of the absence of land lines and reliable electricity support. American companies may have helped make Africa aware early on of the importance of cell phones in Africa, but they were not able to sustain themselves until the tidal wave of new technology arrived in Africa. Timing is critical to the introduction of any new technology. American companies may have been a major factor in other companies seeing the vision of cell phones but they were not the beneficiaries when a critical mass on the continent turned to cellular technology. It does not always pay to be the first. It is often more important to see the mistakes of others before entering in a new market.

My point is that the stereotype of American companies disinterested in Africa may have some truth to it, but it is a very incomplete story. We have companies in our offices nearly every day wanting to know how to enter the African marketplace. We generally tell them it is not easy to do it alone. You need financing, you need a long-term plan and a long-term commitment to build relationships. You need to work with others, both in our own government and in the marketplaces you seek. The African marketplace is far more sophisticated than some realize, with fifty-four different nations with different laws and customs. You need reliable partners. You also need steady financing, and our own government needs to be far more supportive of U.S. companies seeking the African market, than they are now. Our embassies need to continue to increase their advocacy for U.S. companies, and they need the support of Washington, both in Congress and in the Executive Branch.

What was clear to me from the panel discussion in Chicago is that there are many people, like Gayle Smith and Dana Hyde, committed to Africa. Each has a role to play in our relationship, but what is lacking still is a coordinated approach that brings the public and private sector more in harmony in support of one another. The Obama Administration has only one more year before a new administration is elected. However, that time can be used to build a bipartisan base to address the need for American cooperation in and with Africa.

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