“Changing the U.S. Investment Paradigm in Africa” on the sidelines of the U.S.-Africa Leaders Summit
On December 15, 2022, Corporate Council on Africa and Africa Finance Corporation (AFC) hosted a roundtable discussion titled “Changing the U.S. Investment Paradigm in Africa.” The special event brought together key U.S. and African corporates, multilateral institution leaders and other stakeholders who recognize the enormous potential of Africa.
As part of the high-level dialogue, 40-50 senior U.S. and African business executives, public sector and multilateral institution decisionmakers discussed the perceptions and reality of U.S. investment in Africa, and more importantly identified next steps needed to increase U.S. private sector investment into the continent as it creates one of the largest free trade markets with more than 1.3 billion consumers under the African Continental Free Trade Area Agreement (AfCFTA).
There was a consensus that African countries and companies offer a lot of opportunity for significant growth and returns, leveraging important innovations on the ground in areas like ICT, infrastructure, consumer goods and agriculture. Even experienced investors, however, face significant difficulties in raising new capital. Participants generally dismissed the idea that Africa has more or worse risk than other regions, although there was consensus that African governments tend to create more uncertainty, particularly about policy continuity, and are worse at communicating than other regions. It is also important that investors take the time to build scale and replicability into their projects at the start to help translate an initial success into more momentum. The session made it clear that there is significant appetite from investors for more opportunities in Africa.