The U.S. is late with more than $17 billion in new investments in the fast-growing African economy, but companies are eager to get a piece of the action as growth in Brazil, Russia, India, and China (BRIC countries) slow. Conway G. Gittens reports.
America is looking to the shores of Africa and seeing dollar signs. President Obama says it's time to invest in the new Africa. SOUNDBITE: U.S. PRESIDENT BARACK OBAMA (ENGLISH) SAYING: "Some of the fastest growing economies in the world, a growing middle class, expanding sectors like manufacturing and retail, one of the fastest growing telecommunications markets in the world. More governments are reforming, attracting a record level of foreign investment. It is the youngest and fastest growing continent." More than $17 billion in investment pledges are flowing from the U.S. to Africa, the highlight of a three-day Summit in Washington. Marriot plans to expand to 150 hotels in 16 African countries by the year 2020. General Electric is investing $2 billion in infrastructure and worker skills. Private equity group Blackstone is joining forces with Aliko Dangote, African's wealthiest business tycoon, to ply $5 billion into energy projects in sub-Saharan Africa. Brand names like Wal-Mart, Chevron, Ford, Lockheed Martin and Morgan Stanley are already in Africa or a pledging to invest there in the near future. Why the sudden interest in Africa? Blame the BRICS. Brazil, Russia, India, China, and South Africa are no longer the rapid growth economies they used to be, so now investment is looking for better growth opportunities, says Sath Rao of Frost & Sullivan. SOUNDBITE: SATH RAO, VP OF EMERGING MARKETS AND ECONOMIC DEVELOPMENT INNOVATION, FROST & SULLIVAN (ENGLISH) SAYING: "The story of the moment is sub-Saharan Africa. An economist -this is a dream opportunity for an economist. Countries are growing at 5.2 percent growth. This is absolutely great." REPORTER ON CAMERA: CONWAY G. GITTENS, REUTERS (ENGLISH) SAYING The World Bank expects economic growth on the continent to jump to more than 5 percent for the next two years, with the region boasting six of the world's 10 fastest growing economies. But America has to play catch up with China, which has been investing heavily in the continent. China's approach, however, is in stark contrast to the U.S., says Rao. SOUNDBITE: SATH RAO, VP OF EMERGING MARKETS AND ECONOMIC DEVELOPMENT INNOVATION, FROST & SULLIVAN (ENGLISH) SAYING: "Our model is that of sustainable growth, leading ultimately to growth of goods and services, ideally U.S. goods and services. This is completely different from the way China has been looking at Africa. China's approach is more that of a straw pipe, trying to suck out natural resources and giving them a little bit of an infrastructure play." But along with investment comes risk, something that can't be ignored but must be overcome, reminds U.S. Treasury Secretary Jack Lew. SOUNDBITE: U.S. TREASURY SECRETARY JACK LEW (ENGLISH) SAYING: "The challenge ahead is to build robust, secure and transparent capital markets and financial sectors. As everyone here knows, financing is critical to building Africa's infrastructure, to fueling the next wave of entrepreneurs, and to improving the standard of living for families across the continent." And experts say open markets can provide the funding to invest in infrastructure, energy, and especially technology that will not only lift Africa's economy but also lift U.S. corporate profits