When the leaders of the world's seven largest industrial countries and Russia meet in Scotland this week for an annual summit, much of the discussion will focus on African development. American and African business leaders welcome the attention and hope it will attract new investment to the region.
The spotlight will be on Africa this week when British Prime Minister Tony Blair plays host to leaders from the world's seven-largest industrial countries and Russia. Mr. Blair, who commissioned a report on Africa's problems and potential, wants the rich nations to double the amount of aid they give to Africa and write off billions of dollars in debt.
American business leaders say they welcome the increased attention, but are quick to point out that while much of Africa remains mired in poverty and disease, there are pockets of opportunity.
Joseph Grandmaison, who sits on the board of directors of the Export-Import Bank of the United States, says American companies shouldn't be scared off by a conflict in one part of Africa.
"I tease friends by saying 'we're not very good at geography.' The fact is this is a gigantic continent and when you hear about one particular country having special challenges that doesn't mean that two countries over doesn't offer some spectacular economic opportunities," said Mr. Grandmaison.
Mr. Grandmaison gives the example of a company out of Lagos, Nigeria that has an American business partner, which the Export-Import bank helped with financing. The company sells a mobile telephone called "the Buddy Phone," which is 95 percent prepaid.
"Think about that. That's funding your business on someone else's money to say the least. Ninety-five percent prepaid with an average monthly bill of a $150. Think about it. An opportunity," he noted.
According to Mr. Grandmaison, telecommunications is just one sector where U.S. companies could make inroads. He says other potential investment opportunities include environmental technologies and engineering, project management, information technology and agriculture equipment.
"When you look at the AGOA, (African Growth and Opportunity Act) the best advantage that AGOA-eligible countries currently have is really in the area of agriculture where they can grow and ship to the United States, without the benefit of a tariff. To do that successfully they need irrigation equipment, they need more tractors and the like, so there's a great many openings in varied sectors," added Mr. Grandmaison.
AGOA (the African Growth and Opportunity Act) was signed into law by President Clinton and renewed through 2015 by President Bush. In 2004, U.S. exports to the region grew by 25 percent from the previous year to $8.6 billion, while AGOA exports to the United States soared 88 percent over 2003 to $26.6 billion. Mr. Bush says his administration's efforts to expand trade between the United States and Africa are a key way to encourage reform and spur economic development.
Stephen Hayes is president of the Corporate Council on Africa, a business association whose members account for 80 percent of all direct U.S. investment in Africa. He applauds the G8's focus on Africa and says his group is committed to fostering U.S.-African trade ties.
"We've got to get a correct message out on Africa that it is open for business. There are many countries that are good investments and the American economy is losing out [by not investing]," said Mr. Hayes.
The Corporate Council on Africa recently sponsored a four-day U.S.-African business conference in Baltimore, Maryland that drew some two thousand participants. However, Mr. Hayes says while more and more businesses are joining the business association, so far U.S. investment in Africa hasn't increased significantly.
"So our challenge is still how to make that next leap, but I do see that there's hope," Mr. Hayes added.
Executives whose companies are investing in Africa cite several developments to justify that optimism, including an increase in public-private partnerships and expanded trade ties between Africa and the world.
John Watson, president of Chevron International Exploration and Production, says another positive step has been the steady growth in Africa's commitment to good governance.
"This past decade has seen a doubling in the number of African democracies," said Mr. Watson. "African nations have come together to support the extractive industries transparency initiative. Equally heartening, individual African nations have taken bold strides towards more openness, such as disclosing oil concession payments."
While Africa's oil and gas wealth is drawing new investors to the continent, many Africans worry that any increase in revenues will simply foster corruption as oil money has in the past.
But Chevron's John Watson, whose company plans to spend $15 billion over the next five years on energy projects in Africa, says his sector can play a constructive role in Africa's growth.
"The world's thirst for energy is opening the taps on a huge cash flow that when managed responsibly and ethically can mean more jobs for Africa, greater opportunities for African owned businesses, especially small businesses, and increased tax revenues for social programs," Mr. Watson explained.
While U.S. business executives acknowledge that formidable challenges remain for those who wish to do business with Africa, they see enormous potential in a continent which they say too long has been known for endemic poverty, rampant disease, corruption and warfare.