Five Good Reasons for Doing Business in Africa

On September 21st, Bloomberg Philanthropies and the U.S. Department of Commerce will co-host the second U.S.-Africa Business Forum, a day focused on increased trade and investment between the U.S. and African nations.

Building on the very successful inaugural 2014 Forum held in Washington, DC, next week’s Forum in New York City will take stock of all that’s been achieved in the past two years and seek to further energize U.S. and African CEOs, Heads of State, and entrepreneurs to continue to build, invest in, and grow African economies.

There are many reasons the U.S.-Africa commercial relationship is important. Here are five to get the conversation started:

1. Africa’s population is projected to reach 2 billion by 2050.

With a growing proportion of the populace becoming part of the middle class with rising spending power, this rapid population growth makes the U.S. commercial relationships with African countries even more critical.

In recent years, the United States and Africa have worked together to make significant progress in global health, energy, food security, and youth engagement that we must sustain and build on. To be successful, we must leverage effective and diverse financing streams through Official Development Assistance, private investment, and mobilization of domestic resources within countries.

2. By 2040, Africa will likely have a larger workforce than China or India.

According to the McKinsey Global Inst, the share of workers in stable employment will rise from 28% today to 32% by 2020. The growing African workforce of tomorrow underscores how crucial it is to continue to support economies on the continent today.

With more than half of the current population under the age of 18, there is incredible potential for growth and change in the workforce. The private sector is a key partner in delivering on our shared global agenda, bringing capital, jobs, skills, and innovation to help address development​ ​challenges.

In this video, BRCK CEO Juliana Rotich and MERGIMS CEO Louis-Antoine Muhire discuss the importance of African youth and entrepreneurship.

3. Major investments in African infrastructure development continue to create growth and drive innovation.

Spending on infrastructure has doubled over the past decade and now stands at 3.5% of Africa’s GDP, according to McKinsey.

But this is just the beginning. The bulk of African transport infrastructure has yet to be built to accommodate the 867 million Africans that will live in urban areas by 2050. This means incredible opportunities for governments, companies, and communities to invest in their infrastructure together, creating jobs and economic growth.

In support of these efforts, the U.S. government has created and expanded long-term initiatives such as USAID’s Power Africa. Since 2013, Power Africa has mobilized commitments by public and private partners to invest nearly $32 billion for power generation across sub-Saharan Africa.

4. Women are the economic engine of Africa, and their impact is accelerating.

About 70% of labor and 90% of food across the continent is provided by women, and companies are increasingly harnessing their power within formal economies.

Across Africa, women CEOs and entrepreneurs are using their own successful businesses to economically empower other women. Many of these business leaders will be speaking and participating at the U.S.-Africa Business Forum next week.

To name a few: Joy Ndungutse is the founder and CEO of Gahaya Links, which employs a network of 4,000+ women across Rwanda to make unique baskets that are sold around the world. Naadiya Moosajee is the co-founder and CEO of WomEng, an international non-profit organization that is developing the next generation of female engineering leaders in Africa.

In this video, the two CEOs discuss the importance of supporting women’s entrepreneurship on the continent.

5. Trade and investment flows between the United States and Africa are critical to our economies.

$50 billion dollars in U.S. exports to Africa already support a quarter of a million American jobs. From 2010 to 2015, trade between the United States and the East African Community (EAC) increased by 103%, while U.S. goods exports to the whole continent have increased by 59% since 2009.

Supporting and expanding this commercial relationship is an all-of-government effort that brings together agencies and bureaus such as the U.S. Trade Representative, U.S. Department of State, and the Department of Commerce’s ITA. One major initiative, the African Growth and Opportunity Act (AGOA), has been a key element of U.S. economic policy in, and engagement with, sub-Saharan Africa since its enactment in 2000.

We could go on: growing urban populations, rising consumer spending, innovative mobile tech, and new opportunities in agriculture, to name a few.

The bottom line is that the U.S.-Africa commercial partnership has never been more important, and we look forward to strengthening that partnership even further at next week’s U.S.-Africa Business Forum.

Learn more at usafricabusinessforum.org, or join the conversation with #USAfricaBizForum.