February 27, 2023
Global Relationship Director, Absa Bank Limited
Dr. Vernon Darko
Founder & CEO, EQUIPXP
Vice President, U.S.-Africa Business Center, U.S. Chamber of Commerce, Executive Director, U.S.-South Africa Business Council, U.S. Chamber of Commerce, Executive Director, Coalition for the Rule of Law in Global Markets, U.S. Chamber of Commerce
The African market is ripe with opportunities for American companies looking to partner and expand globally. Yet, until recently, much of this potential has remained untapped. In an effort to shed light on Africa’s business climate, the U.S.-Africa Business Center (USAfBC) launched its Advance with Africa initiative, hosting multiple events across the country.
In the most recent iteration of Advance with Africa in Houston, USAfBC Vice President Kendra Gaither sat down with Claire Young, Global Relationship Director at Absa Bank Limited, and Dr. Vernon Darko, Founder and CEO of EQUIPXP. Together, they discussed why now is the ideal time for U.S. businesses to enter the African market, as well as strategies on how to do so successfully.
Africa’s Plentiful Business Landscape Make Now the Perfect Time to Enter the Market
For U.S. companies looking to expand globally, the African continent has valuable resources to support business growth and development.
“[Africa has] 60% of the world’s arable land, [a] fast-growing youth population, digital adoption, [and] natural resources,” said Young. “The reasons to enter the African continent have always been there; it’s just [that] we haven’t been entering the continent, really.”
And, with the U.S. government’s recent ongoing efforts to strengthen U.S.-African business relations, American businesses could more easily break into Africa’s market.
“I think the political will is really there now to support [business growth in Africa],” Young added, citing the Prosper Africa initiative and the recent U.S.-Africa Leaders Summit. “Now is really just a fantastic time, and a lot of that is because of the will of the U.S. government to help support the entry.”
Public Sector Resources Can Help American Businesses Expand into the Market
When expanding his distribution company into Africa, Dr. Darko received valuable support from the Export-Import Bank of the United States (EXIM), the country’s official export credit agency.
“We went to our bank and, at the time, we were too small. The bank would not be able to give us working capital to execute the transaction, and the banker referred us to EXIM Bank,” he explained. “Since then, we’ve used all the products that you can possibly use to export Africa — medium-term transactions, short-term transactions, and even insurance programs to insure our products and protect our payments.”
Dr. Darko also cited several public sector programs — including the Gold Key Service for matchmaking between U.S. companies and foreign market partners, the Market Access Program (MAP) for sharing international marketing and promotional costs, and Trade Missions for facilitated networking between American and international business leaders — as “very impactful.”
For Inclusive Growth in Africa, U.S. Companies Must Make Space for the Minority Business Community
For American companies considering expanding into Africa, it’s critical to make space for minority entrepreneurs — including those from communities of color and diaspora communities — to take part in the African business growth story. According to both panelists, this begins with taking a step back to understand the market and the people within it.
“One of the most important things to me … [is] actually going to the continent,” emphasized Young. “Actually being on the ground, seeing and feeling the different communities, and understanding what the pulse of the different countries [and] cities is like, [is] where opportunity actually sits.”
If traveling to Africa isn’t feasible, Young recommended finding and consulting with a partner, “whether it’s at a law firm, at a bank, [or] at any large institution that might be able to chat with you about ways to enter [the market].”
Dr. Darko also encouraged business leaders to get involved with events and organizations that support inclusive U.S. business growth in Africa.
“A lot of these organizations host conferences … [and] sometimes you have Africans traveling here,” Dr. Darko added. “Being in some of these conferences is a good way to find people, to make connections, and then hopefully be able to execute on your goal or dreams.”