How to do business with Africa Johan Malin

How to do business with Africa
Johan Malin – Istanbul – 31 May 2012
Overview
• Introduction
• Flanders
• Flanders Investment & Trade
• PSLO Network of the World Bank
• Africa: opportunities
• Africa: challenges
• How to tackle the African market?
• The role of the international organizations
• Adapt, adapt, adapt
• The language barreer
• Business delegations of FIT and other PSLO to Africa
An ideal location
Brussels... Capital of Flanders
Capital of Flanders,
Capital of the European Union
Home of the European
Commission and NATO
Multicultural, multilingual,
multinational
… Where Europe’s heart beats
An ideal location
Brussels... Capital of Flanders
Major international and
domestic banking sector
More than 160 embassies
Fast and frequent
international air and train links
… Where Europe’s heart beats
10-98 - 010205
Netherlands
Great
Britain
Amsterdam
London
Bruges
Antwerp
Chunnel
Germany
Hasselt
Bonn
Frankfurt
Ghent
Brussels
Calais
Motorways
Liège
Tournai
Provincial Capital
Lille
Mons
Namur
Main Roads
High Speed Trains
Paris
Airports
Harbors
France
Arlon
Facts & figures
Geographic distribution of Flemish exports
2011
0,53%
3,14%
5,72%
EU
ASIA
1,44%
AMERICA
REST OF EUROPE
AFRICA
OCEANIA
7,22%
Other
11,62%
70,32%
0,49%
1,88%
4,61%
6,07%
2004
0,00%
EU
ASIA
10,71%
AMERICA
75,47%
REST OF
EUROPE
AFRICA
Flanders Investment & Trade
• Guiding would-be exporters to achieve their export
potential through tailor-made information
• Supporting their efforts with export-promoting events
• Offering intelligence on and creating awareness about
foreign markets
• Incentivating export efforts through financial support
and subsidies
FIT: worldwide network
• Promoting all economic aspects of Flanders
• Organising seminars, business briefings, information
sessions, invitation campaigns, multi-sectoral trade
missions, contact and meeting days
• Setting up Flemish pavilions at trade shows and
specialist exhibitions
• Gathering market intelligence and monitoring target
sectors
• Introducing Flemish companies to the right business
partners
What is the PSLO Network ?
A network of business intermediary organizations…
of commerce and industry
• Chambers
and trade associations
• Business
• Investment promotion agencies
… working to fostering trade and investment between
countries with the support of WBG’s products and services.
Launched in Europe in January 1999 as a joint WB, IFC and
MIGA initiative, to promote and strengthen the relationship
between the WBG and the private sector.
Who are the Private Sector Liaison Officers ?
The Network consists of liaison officers – private sector
communications professionals – appointed, based in, and financed by
their respective business organizations.
Opportunities / Networking: Facilitate companies’ access to WBG
business opportunities, services and knowledge.
Policy Dialogue: Act as the voice of their national private sector in
advising the WBG on how to better engage companies on
development issues.
129 PSLOs are currently operating in 87 countries worldwide.
Directory available on the web:
http://web.worldbank.org/WBSITE/EXTERNAL/OPPORTUNITIES/ADVISORYSERVICES/EXTEOS/0,
,contentMDK:20663353~pagePK:64168445~piPK:64168309~theSitePK:575135,00.html
Sub Saharan Africa: opportunities
6
GDP growth
from 1980 to 2009
5
4
SSA
3
SSA without South
Africa
2
1
0
1980 to 1989
1990 to 1999
2000 to 2009
Sub Saharan Africa: opportunities
• Quotes by Ngozi Okonjo-Iweala, World Bank Managing
Director for SSA
– The only trillion dollar economy that has grown faster than
Brazil and India in 2000-2010 is SSA, and the IMF predicts the
same will be true between 2010 and 2015
– Africa is not about charity: businesses are looking for new
markets and Africa is ripe for consideration: Africa can serve as
a new source for global demand
Sub Saharan Africa: opportunities
• Food for thought:
– Foreign exchange reserves increased more than 300% from 37
billion USD  154 billion USD (2001-2008)
– Private investment in telecom: 4 B USD  12 B USD (2001-2008)
– International tourism receipts: 8,5 B USD  23 B USD (2001-2008)
– Remittances : 5 B USD  21 B USD (2001-2008)
– Growing number of democracies, falling number of armed conflicts
– A market of 840.000 people, growing at a pace of 2,5 % (2009)
– Youngest population in the world (almost half under 30)
– The financial crisis led to a drop in growth to 1%, but the SSA
recovers much quicker than Europe, Latin America...
Sub Saharan Africa: challenges
• Weak institutions
– Esp. Juridical, financial and fiscal sectors
• Integration in the global economy; regional integration
• Quality of education has to be improved (higher edu.!)
• Infrastructure needs of 93 billion USD / year
– Electricity, transport,...
– One fourth of your sales to Africa will get lost because of bad
infrastructure, crime, corruption,...!!!
• Lack of financing
• Fast city immigration will put pressure on urban
infrastructure
First paces through the multilateral institutions
• Enormous knowledge on developing countries
– Open Access Policy
– http://www.worldbank.org/reference/
• Experience in risky environment for project building
– Local presence, contacts with government, Doing Business,...
• Financing and guarantees
– Availability of fund for procurement
– IFC, MIGA for investments
• Bidding for projects financed by the multilaterals
– Clear terms (TOR), clear rules
– Watchdog on corrupt behaviour
– Security of payment in a reasonable time
Adapt, adapt, adapt,…
• Adapt your product:
•
•
•
•
•
•
•
•
Easy to use (the less training needed, the better)
Easy to transport (avoid losses and damages)
Small scale solutions
Take local circumstances into account (e.g. Lack of power
supply)
No extensive need for after sale services
Innovative and pro-poor
The challenge of offering a good quality product for a low price
Local languages
The language barreer
Partner with European
companies with
experience in Africa and
language skills
Belgians do have a lot

of experience in Africa,
why not make use of their
language skills?
See previous remark on
Turkish people returning
from Belgium to Turkey!
A typical exploratory business mission to Africa
• We work closely together with the embassies in
Brussels
• Still we have to face the weakness of the local institutions
• No trade representatives in most of the countries
• We organize a program of visits to the multilateral
institutions
• Country general and sector knowledge
• Contacts with government (executing agencies)
• Procurement opportunities
• The basis of our company selection is the project
portfolio of the multilateral institutions (WB, AfDB, UN,
EU,...)
PSLO missions: every country is different
• ECA: Albania, Georgia and Azerbaijan
• Asia: Philipines, Vietnam, Indonesia
• LAC: Colombia and Haiti
• Africa: Ethiopa, South Sudan, Ivory Coast, Ghana
• December 2012: Democratic Republic of Congo,
Congo-Brazzaville
• Differences in government, type of economy,
language, business customs, weakness of
institutions,…
Communication
www.flandersinvestmentandtrade.com
Thank you for your kind attention
Contact details
Flanders Investment & Trade
Gaucheretstraat 90
B- 1030 Brussels
Belgium
T +32 2 504 87 58
[email protected]
www.flandersinvestmentandtrade.com
Flemish Trade & Investment representative: Raphaël Pauwels
+ 90 212 293 99 17
[email protected]