1. Doing Business in West Africa May 2012 Heather Byrnes Senior Commercial Officer Embassy of the United States Accra, Ghana Road Construction - Photo Courtesy of West Africa Trade Hub Port of Tema- Photo Courtesy of West Africa Trade Hub

2. West Africa - Overview One of the world’s regions of highest intrinsic wealth: oil/gas, gold, bauxite, manganese, diamonds, cocoa and much of the land highly suitable for agriculture; Currently one of the poorest areas in the world – but almost all countries showing positive growth – best three performers 6-13% annual GDP growth; Legacy of colonialism: many countries encompass multiple ethnic groups and have had long-term internal conflicts. But, growing number of peaceful democracies; Infrastructure poor: power, water, telecommunications, roads, etc. But, this also = opportunities for infrastructure companies; Endemic health problems in region: malaria, water-borne illnesses, maternal/child mortality – but, progress on almost all fronts; Known for internet fraud. Check potential business partners with embassy. Payment in advance is highly recommended or other methods of limiting risk (letter of credit, etc.) Courts often slow and judgments difficult to enforce; Formal business culture (suits, use of titles, etc.) but relaxed sense of time (things take a long time and culturally people are not deadline conscious); Opportunities for infrastructure companies across the region – growing middle class in a few markets (ie consumer goods).

3. West Africa – Key Market Statistics Benin Burkina Faso Cape Verde Cote D’Ivoire GambiaGhanaGuinee Guinee Bissau LiberiaMaliNigerNigeriaSenegal Sierra Leone Togo Pop’n millions 1017½21225112415171701357 WB Ease of Doing Business Rank 17515011916714963179176151146173133154141162 GDP growth 2011 3.8%4.9%5.6%-5.8%5.5%13.5%4%4.8%6.9%5.3%5.5%6.9%4%5.1%3.8% Per capita GDP $ 1,500 4,0001,6002,1003,1001,100 4001,3008002,6001,900800900 Language FR PORFRENG FRPORENGFR ENGFRENGFR Sources: www.cia.gov/library/publications/the-world-factbookwww.cia.gov/library/publications/the-world-factbook http://data.worldbank.org/indicator/IC.BUS.EASE.XQ

4. WATRADEHUB.COM Road Governance Report

5. Challenges Infrastructure: water, power, internet – both reliability and quality Lack of business service providers (a handful of reliable providers, used by almost all the companies) High costs (hotel, car rental, commercial real estate – all expensive) Difficulty sourcing qualified staff and high training costs Lack of reliable ‘cold chain’, most goods are trans-shipped through Europe Contract sanctity – contract seen by many as starting point, not end, of negotiation. International arbitration clause is a must. Use qualified lawyers. Check any potential business partner with the Commercial Service or Embassy. A handful of fraudsters are very active. You would be amazed how legitimate some of them seem. Payment in advance is highly recommended or other methods of limiting risk (letter of credit, etc.) Just because one transaction was ok – don’t let down your guard. Culturally some West Africans have a very difficult time saying ‘no’. Actions speak louder than words when dealing with people from the region. Photo by WA Trade Hub

6. Opportunities Asian and European competitors already very aware of opportunities in the region – but U.S. companies much less aware/experienced in this part of the world; In many parts of West Africa, U.S. brands/goods are highly sought after/esteemed; While risks higher in this part of the world, returns can also be higher; Sectors of particular opportunity: Energy (Power and Oil/Gas – both will see sig. growth in next decade) Transportation (Bridges, Rail, Ports, Aviation and Roads) Heavy Equipment (Mining, Construction and Oil/Gas) Telecommunications (high cell phone penetration, increasing use of internet) Agriculture (starting to transition from very small farms to larger- scale commercial farming) Healthcare – equipment, hospital construction in particular Consumer – Limited for most of region but opportunities in some markets (e.g. Nigeria and Ghana)

7. Traveling to West Africa Crime/security issues vary considerably from country to country. Ghana for example is similar to the United States while Nigeria is more dangerous. Check travel.state.gov before planning any trip. Malaria is big risk across region. We advise all travelers to take prophylaxis. Other vaccines etc. are important. Visit the CDC website for more information on health preparations: www.cdc.gov.www.cdc.gov Weather is HOT and air conditioning can be variable. Suits are a must for business but lighter fabrics are better. Bring any medicines you take regularly – not all pharmacies are reliable and some medicines available in the U.S. are not available here. (Also, counterfeit medicines are a problem.) Visa in advance is required for some countries. Allow 2-3 weeks for processing for each country. Lots of new flights coming and many airlines already here: Delta, United, BA, KLM, British Airways, Virgin Atlantic, Emirates, Lufthansa for example. Photo by Tullow

8. Is West Africa for my company? Business is West Africa is very relationship driven. Business relationships take time to develop. (Any process takes time in West Africa.) Do you need an immediate sale? Or are you willing to wait a year or two? Business in West Africa is personal. You may need to travel to West Africa on a somewhat frequent basis – even if you have a partner on the ground. Are you prepared to travel to West Africa? To develop in West Africa long term, you will need a local partner. Are you prepared to work through a distributor, reseller or other partner? West Africa can be challenging for new-to-export companies. Do you have experience in other export markets? After-sales service/repair/support can be a challenge in West Africa. Does your product or service depend on on-the-ground after-sales service or support? Infrastructure can be unreliable (power, water, internet, etc.) Does your product depend one or more infrastructural aspects? Are you a flexible, patient person with a sense of adventure? Photo by Tullow

9. Spotlight on Three Markets: Ghana, Nigeria and Senegal

10. GHANA

11. 12 th fastest growing economy in the world last year. Steady growth over last decade. English speaking, former British colony Ghana one of the fastest growing economies in the world in 2011 at 13.5 %. Lots of real opportunities for U.S. companies – U.S. exports grew more than 30% in 2010 vs. 2009 24 million people Growth from low base, just moving into bottom of middle income status. High debt to income ratio. Growing popularity as regional HQ for U.S. companies: stable, good quality of life, easy to attract ex-pat employees, ease of travel. GHANA: MARKET OVERVIEW

12. Your Gateway to West Africa Sub-regional market of 250 million people. Immediate access to all markets of the Economic Community of West African States (ECOWAS). Although, not completely free trade. Many companies moving regional HQ’s from other countries in region to Ghana.

13. A Vibrant Democracy July 2009 – President Obama visited Ghana, first visit by President Obama to sub-Saharan Africa. Third sitting U.S. president in a row to visit Ghana, Presidents Bush and Clinton also visited. WHY GHANA? Two peaceful handovers of power between parties in a row – best track record on the continent and by far in the West African region. Two main parties: NDC (National Democratic Congress) and NPP (New Patriotic Party). Each have over 40% of the vote. Last election was roughly 8 million voters, decided by 40k votes. No sig. violence. Free and active media (albeit sometimes rather colorful).

14. Akwaaba (‘Welcome’) Ghana is sometimes called the Ireland of Africa. Ghanaians known everywhere as friendly, welcoming and fun-loving. Relaxed mode of life, and business. Can be enjoyable (when you want to relax) and frustrating (when you want to get something done). Although pace is relaxed, aspects of society very traditional, formal: Ghanaians dress formally and modestly. Greetings and titles very important. Traditional rulers still important feature of power structure. U.S. companies setting up presence in Ghana encouraged to establish and maintain good relations with both elected government and traditional rulers.

15. Opportunities Steady growth of 5-7% for past decade. Oil find in 2007 (and further oil finds since) have created further economic momentum. 13% last year. Number of inquiries to Embassy Ghana has more than tripled in last three years. Companies already in Ghana have increased footprint (e.g. GE, IBM, etc.). POWER GENERATION & TRANSMISSION OIL AND GAS PORT/MARINE DEVELOPMENT HEAVY EQUIPMENT E.G. MINING AND CONSTRUCTION AUTOMOTIVE HEALTHCARE Consumer GoodsFranchising

16. If you are interested in opportunities in Ghana.. Heather Byrnes, Senior Commercial Officer Email: byrnesh@state.govbyrnesh@state.gov Direct tel. +233-21-741-086 Cell: +233-244-331-244 OR Abdul-Aziz Anyang, Commercial Clerk Email: abdul-aziz.anyang@trade.govabdul-aziz.anyang@trade.gov Direct tel. +233-21-741-498 Cell: +233-244-331-245 Mailing address: Foreign Commercial Service 2020 Accra Place Washington, DC 20521-2020 GHANA

17. Nigeria

18. More than twice the size of California English speaking, former British colony Rich in natural gas, petroleum, tin, iron ore, coal, limestone, lead, zinc and arable land Growth in 2011 of 6.9% and 2010: 8.7% 170 million people Long-standing ethnic & religious tensions but 2007 marked first civilian-to-civilian transfer of power in country’s history Oil sector provides 80% of country’s revenues but since 2008 government attempting to diversify and instituting economic reforms. NIGERIA: MARKET OVERVIEW Nigeria

19. Nigeria: Africa’s Largest Nation Nigeria has world’s 31 st largest GDP at $414 billion in 2011 and aspires to be in world’s 20 largest economies by 2020. To reach that goal, government is liberalizing the economy and promoting public- private partnerships. Nigeria accounts for 40%+ of all imports in West Africa and is the third largest consumer market on the continent, after Egypt and South Africa. Africa’s most populous country (one-sixth of the continent’s population lives in Nigeria). Cashew Factory in Nigeria - Photo Courtesy of West Africa Trade Hub One of the most diverse markets in the world with 250 ethnic groups. Diverse nationalities and cultures offer opportunities for U.S. companies – but also challenges. For example, sales/ad literature with certain female portraits might work well in majority-Christian areas, but could cause problems in the Muslim-majority North.

20. Nigeria: Challenges Safety and security situation also creates cost for companies – both in terms of direct costs and (for international companies) attracting retaining staff; Clearance of goods at ports can be slow, cumbersome and highly bureaucratic. Reports from companies that corruption and congestion are significant issues; Cost and availability of credit are problems (interest rates are 20-35%); New local content laws for petroleum industry are higher than actual local content seen in the industry globally – may be challenging for companies in the sector. Photo Courtesy of West Africa Trade Hub Infrastructure inadequate = high costs for transport, water, power; Less than 4,000 MW total so most businesses rely on generators. Recent reforms to power sector, which may result in increased power gen, but will take several years. Pent-up demand estimated at 20,000 MW;

21. Nigeria: Opportunities Growing and increasingly sophisticated consumer base, coupled with strong affinity for U.S. products and American culture; Best prospects in these sectors: Oil and Gas Field Machinery/Equipment Safety and Security Equipment/Services Power Generation Equipment Health Care Equipment/Services Agriculture Equipment/Machinery/Supplies Education Services and Supplies Secondary best prospect sectors: Maritime Equipment, esp. workboats Construction Equipment/Supplies Financial & Insurance Services IT Equipment and Services Water/Wastewater Equipment Aviation Equipment and Supplies Photo Courtesy of US Embassy Nigeria

22. Nigeria: Resources U.S. companies interested in the Nigerian market are strongly advised to seek the assistance of experienced commercial lawyers. For a list of legal firms, contact the Commercial Service office in Lagos. The Nigerian Embassy in the United States has information for U.S. businesses considering exporting to/working in Nigeria: www.nigeriaembassyusa.orgwww.nigeriaembassyusa.org Photo Courtesy of US Embassy Nigeria Check out any prospective local partner with the U.S. Commercial Service in Lagos: www.buyusa.gov/nigeria.www.buyusa.gov/nigeria Commercial Service in Nigeria can provide lists of pre- vetted companies as part of an International Partner Search or Gold Key Service. They can also conduct International Company Profile reports, useful as part of due diligence.

23. If you are interested in opportunities in Nigeria.. Rebecca Armand, Senior Commercial Officer Email: rebecca.armand@trade.govrebecca.armand@trade.gov Tel. +234-1-460-3581 OR LagosOfficeBox@trade.gov A list of specialists and their sectors can be found on the website, buyusa.gov/nigeria at http://www.buyusa.gov/nigeria/contactus/index.asp

24. SENEGAL : BUSINESS OPPORTUNITIES US EMBASSY DAKAR Senegal 24

25. SENEGAL : LOCATED FOR SUCCESS NORTH AMERICA EUROPE SOUTH AMERICA AFRICA SENEGALSENEGAL 25

26. SENEGAL : PROS AND CONS - + STABLE DEMOCRACY EAGERNESS FOR AMERICAN BRANDS – INTEREST IN DOING BUSINESS WITH THE U.S. MAJOR INFRASTRUCTURE PROJECTS ATTRACTIVE INVESTMENT CODESMALL MARKET A CONSERVATIVE BANKING SYSTEM HIGH FACTOR COSTS RIGID LABOR MARKET GATEWAY TO ECOWAS, MARKET OF 255 MILLION STABLE MACRO ECONOMIC CLIMATE NON-TRANSPARENT JUDICIARY. FRENCH LEGAL SYSTEM CORRUPTION 26

27. SENEGAL : COMPETITIVE ADVANTAGES AND OPPORTUNITIES FOR INVESTMENT. Tax and Customs Exemptions for Specific Sectors (agriculture, agroprocessing, fishing, tourism, mining). Significant Investment Incentives (> $200,000) 100% Tax Exemption on Profits for the first 5 years. New Airport 47 km from Dakar – Toll Road under construction. Plan Takkal. Mineral Port. No history of coups. Free and fair elections. Strong civil society ATTRACTIVE INVESTMENT CODE INFRASTRUCTURE PROJECTS STABLE DEMOCRACY 27

28. SENEGAL : COMPETITIVE ADVANTAGES AND OPPORTUNITIES FOR INVESTMENT. Senegal as the hub for Ecowas countries – esp. French-speaking. Transportation hub. Port of Dakar as a natural port of call. Good telecommunications infrastructure. A stable currency pegged to the Euro. Low inflation rate. Stable GDP Growth. Diversification of international partners. U.S. as the largest donor – MCC. New entrants GATEWAY TO ECOWAS COUNTRIES STABLE MACRO ECONOMIC CLIMATE INTEREST IN DOING BUSINESS WITH THE U.S. 28

29. SENEGAL : BUSINESS OPPORTUNITIES POWER GENERATION CONSTRUCTION EQUIPMENT AND HEAVY MACHINERY AUTOMOBILES TELECOMMUNICATIONS VALUE-ADDED SERVICES TELECOMMUNICATIONS VALUE-ADDED SERVICES AGRICULTURAL EQUIPMENT LOGISTICAL PLATFORM SERVICES HUB LOGISTICAL PLATFORM SERVICES HUB 29

30. SENEGAL : POWER GENERATION 30 - Plan Takkal Investment in new power plants - Rehabilitation of old plants By 2015 15% of country’s energy needs from renewable sources Rural electrification Senegal’s Plan Takkal requires big investments and may result in opportunites for U.S. Companies

31. If you are interested in opportunities in Senegal.. Youhanidou Wane Ba, Commercial Specialist Email: wanebay@state.gov Tel. +221-33-829-2231 OR Steve Perry, Econ Counselor Email: perrysj@state.gov Tel. +221-33-829-2227

32. Thanks! Questions?