Why US, Britain, France, Russia are scrambling for business opportunities in Africa

By Abimbola Tooki

Antony Blinken, U.S. Secretary of State, started his fourth African trip this week, visiting Cabo Verde, Cote d'Ivoire, Nigeria and Angola. Key priorities include bolstering security partnerships and enhancing health and economic development in the region.

Blinken said United States is committed to deepening and strengthening partnerships across Africa, while kicking off a four-nation tour on the continent to signal Washington's interests there despite ongoing conflicts in the Middle East and Ukraine.

Just yesterday, Russian President Vladimir Putin met Chadian leader Mahamat Idriss Deby in the Kremlin, courting a country that had previously maintained a pro-Western policy and spurned Russia's recent outreach in Africa's Sahel region.

Russia has been moving to edge out the influence of France, the former colonial power in West Africa and the Sahel, and build ties with countries that have been roiled by a wave of coups since 2020.

The United Kingdom government said its strategy is to establish long-term and mutually beneficial partnerships with African nations. These, it said, ‘‘will build on our shared interests for a safer, healthier and more prosperous future for us all.’’

UK believes that by supporting African-led priorities with British expertise, ‘‘we can provide more opportunities in the area of more jobs and greater stability, including for women and girls, in the UK and across Africa.

These three countries are fast responding and taking opportunities of the decreasing influence of France in Africa.

France has seen a significant decline in its political alliances, military engagements and economic agreements in the Sahel region.

It is not surprising that developed countries are scrambling for Africa in their latest moves to expand their business activities and have controlling influence on the world economy.

Africa offers a variety of growing consumer markets, abundant natural resources, and economic growth potential. It's a region with diverse opportunities across various industries, from technology to agriculture.

The global economy has entered a prolonged period of slowdown. According to a 2023 World Bank Report, “nearly all the forces that have powered growth and prosperity since the early 1990s have weakened.” Even before the COVID-19 pandemic, an aging population, slowing productivity, and growing barriers to trade and the free movement of people were slowing global growth.

Then came the triple back-to-back shocks: the pandemic, the Ukraine war, and persistently high inflation along with subsequent rapid rate hikes to fight it.

Those shocks, combined with preexisting structural factors, have introduced strong headwinds for the global economy and its growth prospects in the next decade.

If there is no significant policy intervention to revitalize the global economy, the potential result is a lost decade—not only for certain countries or regions, but for the entire world. 

This, according to economic analysts, makes Africa the best place to invest at the moment. However, foreign investors have not moved into the continent as quickly as expected because foreign investment decisions are often methodically overstructured. One of the major factors cited is too much risk. But risks and profits are inseparable twins: high-risk ventures are frequently associated with higher profits.

Africa is the most profitable region in the world. A report by the UN Conference on Trade and Development states that between 2006 and 2011, Africa had the highest rate of return on inflows of Foreign Direct Investment: 11.4 per cent  This is compared to 9.1 per cent in Asia, 8.9 per cent in Latin America and the Caribbean. The global figure is 7.1 per cent

Examples of companies benefiting from bountiful profits in Africa abound: Sonatrach’s turnover from oil and gas alone was $33.2 billion; MTN Group’s turnover was about $10 billion; and Dangote Group’s turnover was $4.1 billion—all in 2017. A variety of factors drive up Africa’s profit prospects, making it imperative for European, North American, Asian, and Latin American businesses to invest, helping to foster the continent’s economic progress.

Economic growth potential: Many African countries are experiencing strong economic growth, driven by factors such as a growing middle class, urbanization, and increasing consumer spending. This presents attractive opportunities for businesses looking to expand into new markets.

 Natural resources: Africa is rich in natural resources such as oil, gas, minerals, and agricultural products. Developed countries are interested in securing access to these resources to fuel their own economies.

 Untapped markets: Africa is home to a large and largely untapped consumer market. With a rapidly growing population and increasing urbanization, there is a growing demand for a wide range of goods and services, presenting significant business opportunities.

 Infrastructure development: Many African countries are investing heavily in infrastructure development, including transportation, energy, and telecommunications. This creates opportunities for foreign businesses to participate in infrastructure projects and related industries.

 Strategic partnerships: Developing closer economic ties with African countries can help developed countries gain strategic influence in the region and access new trading partners.

 Technology transfer: Many developed countries are interested in transferring technology, knowledge, and expertise to African countries, which can benefit both the African economies and the companies involved.

Geopolitical Influence: Many countries seek to build strategic alliances and partnerships in Africa to enhance their geopolitical influence and gain access to natural resources, markets, and strategic military locations.

With access to basic infrastructure, alongside efficient institutions as well as its young population, massive natural endowments, and strategic location Africa can seize its economic potential and act as an engine of growth for the global economy for decades to come.