Business leaders seek to tap into growing African markets
Competition, cultural barriers pose challenges
Chinese competition remains a serious obstacle for U.S. businesses trying to break into African markets, executives told officials during a visit to Prince George's County by Assistant U.S. Trade Representative Florizelle Liser last month.
But when it comes to government-sponsored trade missions and other initiatives to help boost African trade for U.S. companies, caution must be exercised, said Liser and others.
More than 50 people, including business owners throughout the state, attended the get-together Jan. 22 in Largo. The meeting was sponsored by the Prince George's County Africa Trade Office.
"We want to ensure Prince George's remains on the forefront of international growth," said Kwasi G. Holman, CEO of the county's Economic Development Corp.
Liser, trade representative for Africa, said African nations often lament that U.S. business lacks a presence in their markets. She said that nine of the 20 fastest-growing global economies are in Africa, many with investment return rates above 10 percent.
Many executives argued that U.S. businesses cannot compete with Chinese businesses that can get financing through their government, particularly for small businesses. They pushed for having federal, state and local governments use African business owners as liaisons, as mentioned by Sharon T. Freeman in her book "China, Africa, and the African Diaspora." Freeman is president of Lark-Horton Global Consulting in Washington, D.C.
Some executives urged that governments take the initiative with improving trade missions.
"There is suspicion about trade missions and their effectiveness," Liser said. "We need to figure out how to structure them so people know the benefits."
Too much government involvement runs the risk of running afoul of trade regulations over subsidies, said I.M. Destler, a professor of public policy at the University of Maryland, College Park, and a former consultant for State Department.
Instead, federal officials should help through providing information, helping facilitate contacts and conducting market research.
Destler said one of the greatest challenges facing U.S. companies is China's fixed exchange rate.
Eric Henderson, a principal with XCBG International Group in Bowie, said businesses can encourage more financing from banks and other lenders by convincing them "there is a buck to be made." XCBG has worked in Africa for 15 years, he said.
Henderson was referring specifically to a suggestion from Patrick C. Wilson, COO of Professional Agriculture Tracers Worldwide in Montgomery Village. Wilson supports establishing more regulatory labs in Africa to verify exports coming from there.
"You have to look at what people want to finance," said Lilia A. Abron, president of Peer Consultants in Baltimore, which has built homes in Africa for 15 years. She also said existing U.S. businesses in Africa have to start sharing what they know with ones back home and stop keeping quiet for fear of competition.
Ola Famuyiwa, CEO of the African Business Roundtable in Silver Spring, said many companies remain uncomfortable traveling to Africa because of stereotypes, which on-ground businesses could mitigate.
Others stressed that understanding African cultures is the first step.
K.C. Ford, president of GettingThere4Him in Bowie, said businesses should hire African employees and help them become self-sufficient instead of just coming in and using their own workers. Ford joined Prince George's County on a government trade mission to Cameroon last year.
"Americans don't like to listen a lot of times," Abron said, adding that companies interested in African markets need to go to Africa and integrate themselves with the culture rather than operating remotely in the U.S.
She gave the example of her builders having to construct clay fire brick homes for several years in South Africa before residents warmed up to fabricated housing.
John L. Mack of John L. Mack & Associates, an international information technology consulting company in Upper Marlboro, also floated the idea of governments investing in an energy project similar to a $15 million U.S. Agency for International Development telecommunication project several years ago. He said this could bring more U.S. companies onto the continent and result in even more business for maintenance and expansion.
Prince George's County opened its Africa Trade Office last year to focus on trade with more than 23 African nations.
"International trade is a key component to building the small-business community," said David J. Byrd, deputy chief administrative officer for the county.