Shedding light on business in Africa

Major cities in Africa-- such as Dakar, Senegal (pictured above) and Nairobi, Kenya -- are becoming bigger hubs for businesses. (Kate Shellnutt/MEDILL)

BY KATE SHELLNUTT- MEDILL NEWS SERVICE

Africa was called “the dark continent” by 19th century explorers unfamiliar with the vast region, nearly three times the size their European homeland. Although that term seems completely antiquated today, there unfortunately remains a huge shadow over Africa, its development and its economic potential.

From the other side of the Atlantic, we tend to think of Africa pretty simplistically: Safari-esque, politically unstable, “third world.” While these terms describe some areas of Africa, levels of democracy, technology use and urbanization range from having none at all to fully modern cities, equipped with WiFi, in places like Dakar, Senegal.

And as more countries in Africa move along their development paths, their growth offers an opportunity for international investment.

Already the continent is responsible for a fair amount of the world’s commodity items– minerals, oil, cocoa, etc. Newer industries include communications (cell phone companies, Internet service providers), transportation (aviation, auto manufacturing) and ports on the coast for the transport of goods.

Some say regions like East Africa may become the next China or India. And in countries like Kenya, where most who live in major cities speak English, it’s getting easier for U.S. companies to take advantage of the developing business climate and expand there.

Symon Ogeto, a Kenyan living in Chicago who runs a news site and a travel agency for tourists visiting his native country, says that Illinois companies like Motorola and Caterpillar, among others in the U.S., are actively researching sites in Kenya as places to expand.

Ogeto’s site, called Mashariki Leo, reported that Delta launched four-times-a-week direct flights from the U.S. to Kenya on Tuesday, as people are increasingly drawn to the country, which got a lot of attention last year as the home country of President Obama’s father.

A developing area where business costs are cheap but the environment is favorable, the East Africa region offers a $40 billion economy, plus 120 million people.

There’s already evidence of new business ventures having significant effects on local economies. Despite the global downtown, the Cooperative Bank of Kenya (COOP KN) has been one of the country’s hottest stocks on the Nairobi Stock Exchange and saw earnings grow 38 percent in the first quarter.

Demand for banking services is up regionally and the bank announced plans to open a division in southern Sudan and possibly in Uganda as well.

Also, new developments require fuel, and Nairobi-based Total Kenya Ltd. (TOTL KN) is also growing. The company recently acquired Chevron Corp.’s Kenya Division.

As investors and world citizens, we should be more open to contemporary Africa and what its countries have to offer. Working in or with a “non-Western” culture puts our activities in a different context from the U.S. model that we’re used to and reveals how the way we do business can reflect underlying social values.

Tags: Africa, African countries, Business, Chicago, developing world, International, Kenya, opportunity, Senegal