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 johan.malin@fitagency.be www.flandersinvestmentandtrade.com Flemish Trade & Investment representative: Raphaël Pauwels + 90 212 293 99 17 raphael.pauwels@fitagency.com