ACEC U S African Initiatives Session Jim Wilson

ACEC: U. S. African Initiatives Session Jim Wilson – Senior Coordinator for Trade Promotion U. S. Department of State Grand Hyatt Hotel – April 30, 2014

“Sub-Saharan Africa is a region of extraordinary opportunity for growth and economic development. ” “[Through the DBIA campaign] we continue the work of creating jobs and expanding economic opportunity that will help drive our economy and support the growth of our African trading partners. ” Barack Obama President of the United States of America

Overview Africa is huge: it is the world’s second-largest and second-most-populous continent. Sources: 3 The Economist (2010), 4 A. P. Sayre (1999).

What’s Driving Africa’s Growth? • The commodity boom only explains part of Africa’s growth story. – Natural resources, and the related government spending, generated just 32% of Africa’s GDP growth from 2000 through 2008. • The remaining 68% came from other sectors, including wholesale and retail, transportation, telecommunications, and manufacturing. Source: 11 Mc. Kinsey & Company (2010).

A Growing Workforce Africa will have the world’s largest workforce by 2040! Sources: 5 Mc. Kinsey Global Institute (2012), 7 The United Nations (2010).

A Diminishing Political Risk • There have been 35 peaceful transitions of power since 1982. • Successful coups have decreased from over 20 in the 1960 s to fewer than 10 in the 2000 s. • The number of democracies and democratic-leaning governments has grown from 10 in 1980 to over 30 today. Source: 8 The Economist (2012).

Prospects for Long-Term Growth • The continent’s growth also picked up during the oil boom of the 1970 s, but slowed when oil and commodity prices declined in subsequent years. • While short-term risks are ever present, professional consensus is that Africa displays long-term growth prospects. – This is driven by the internal (regional) improvements previously discussed as well as global economic trends. Source: 11 Mc. Kinsey & Company (2010), ), 2 Ernst & Young (2012.

Potential U. S. Company Trade and Investment Sectors Source: 10 Ex. Im Bank (2012).

Infrastructure • Africa has as many cities with populations in excess of one million people as Europe, yet its infrastructure remains vastly underdeveloped. • Investments in infrastructure are investments in growth, which enable commercial activity, builds a middle class, and spurs more consumer activity. • Infrastructure will lead all African industries with a projected 9% compound annual growth rate in the next decade. Source: 5 Mc. Kinsey Global Institute (2012).

Infrastructure There are major untapped opportunities for the private sector in areas such as power generation, transport, information and communication technologies, and water treatment. Africa has a huge infrastructure deficit, presenting many investment opportunities for U. S. companies. Source: 5 Mc. Kinsey Global Institute (2012).

Multilateral Development Banks • Multilateral development banks (MDBs) are “institutions that provide financial support and professional advice for economic and social development activities in developing countries. ” • MDBs include: the World Bank Group; the African Development Bank; the Asian Development Bank; the European Bank for Reconstruction and Development; and the Inter. American Development Bank Group. • MDBs present several business opportunities for U. S. companies. Source: 14 The World Bank (2012).

The World Bank-funded project cycle presents many opportunities for bids from U. S. companies… Source: 13 The World Bank (2012).

World Bank-funded Bid Opportunities Source: 13 The World Bank (2012).

Project Cycle Documents There are three main project cycle documents used by the World Bank and MDBs: 1. Project Information Document (PID): The first publicly available document about a given project is the 6 to 7 page PID, which conceptualizes the project. 2. Project Appraisal Document (PAD): The 100+ page PAD offers detailed information, including a procurement plan for the first 18 months. 3. Procurement Notice: Procurement notices are published locally and in the “UN Development Business” publication. There are business opportunities available before, during, and after each of these documents is published. Source: 13 The World Bank (2012).

Source: 13 The World Bank (2012).

How to be Successful? • Partnerships with local champions • Estimated 90% of MDB contracts are awarded to host country companies • U. S. firms are typically interested in only part of overall project, often equipment supply • One of our strengths is knowing leading local players (also have Af. DB lists) • Lower cost/lower risk for U. S. companies

How to be Successful? (continued) • When to report, when to promote partnerships? • At the early stages of project development (pre-pipeline and project identification stage) • Key info sources: MDB Country Assistance Strategies, Sector Strategies, Monthly Operational Summary, and the Project Identification Documents • Discussions with local DFI reps

State Department Initiatives • Business Information Database System (BIDS) – Web portal to help U. S. businesses learn about significant international commercial opportunities – WWW. BIDS. STATE. GOV – Description of projects and links to detailed data – Provides continuously updated picture of procurement opportunities worldwide

State Department Initiatives • Direct Line Program – Program of conference calls with select U. S. Ambassadors to connect U. S. executives with political and commercial insight on specific foreign markets – WWW. STATE. GOV/E/EB/DIRECTLINE

Economic Statecraft • Secretary John Kerry: Economic policy is foreign policy, and foreign policy is economic policy. I’ve challenged every Foreign Service officer to be an economic officer and make our prosperity agenda an all-hands-on-deck job at the State Department.

Thank You Jim Wilson Senior Coordinator for Trade Promotion Bureau of African Affairs U. S. Department of State email: Wilson. JM [email protected] gov