A resurgent Africa seeks U.S. partners

It's been 22 years since Nelson Mandela walked out of prison, the first steps toward South Africa becoming a free country. With political struggles behind it, South Africa could begin to focus on the future and the economy.

And now, two decades later, South Africa is poised for a strong economic future that can be made even stronger with investment from the United States and states like Minnesota. Consider:

• Sub-Saharan African economies will grow by 5.6 percent in 2013, which compares very favorably to the projected 3.3 percent for advanced economies, according to International Monetary Fund projections.

• South Africa has a well-diversified economy with world-class financial system and infrastructure that makes it a strategic place to connect the world to Africa's burgeoning middle class and educated workforce — 300 million people.

• While global average tourism growth in 2012 was 4 percent, South Africa experienced a 10.5 percent growth. A recent survey of the heads of American investment firms showed that one out of two recognized Africa as the most important investment destination.

From a small wine importer begun by a retired Marine Corps officer who had been stationed in South Africa (co-author Robert Marx) to giants like General Mills, Cargill, Donaldson Co. and Thomson Reuters, Minnesota companies have been doing increasing amounts of business with South Africa.

Exports from the state have increased 15.7 percent to $84.2 million in 2012 from $72.8 million in 2011. While that is only a small share of the total $7.5 billion in U.S. exports last year, it is enough to rank Minnesota 25th among the 50 states in total exports to South Africa. Overall, U.S. exports to South Africa rose 4 percent from 2011 to 2012.

Another "product" that Minnesota exports to South Africa and to the African continent is books through Books For Africa, a St. Paul-based nonprofit. The group has sent 900,000 educational, children's books and law books to South Africa over the last 25 years and more than 28 million books to 49 countries.

Books for children in need are a stimulus to the education system, which leads, hopefully, to an educated workforce and development of democratic states and the rule of law, which in turn fosters economic and business growth.

The United States faces strong competition from the BRICS countries (Brazil, Russia, India, China along with South Africa), which are well-established trading partners. South Africa welcomes U.S. investment and is working closely with the U.S. government and its Doing Business in Africa initiative, launched last fall.

"Overall, the campaign is about finding new ways to form stronger partnerships for prosperity," acting Commerce Secretary Rebecca Blank told executives at a meeting in Johannesburg in November. She said that U.S. agencies would work to encourage U.S. companies and U.S. small businesses run by African immigrants to trade with and invest in Africa through expanded trade programs.

South Africa — and the rest of the continent — need leading-edge entrepreneurs from the U.S. not only to help Africa, but to help this country. Investment in South Africa will help pick up the U.S. economy.

While U.S. companies have traditionally been the investors in South Africa, large South African corporations have billions of dollars in U.S. investments and thus contribute to economic growth and jobs. The most recent announcement of a $21 billion investment in a gas-to-liquids manufacturing facility in Louisiana is testimony to our commitment to build an enduring partnership and find win-win solutions.

South Africa has the second-best banking system in the world, a world-class stock exchange and a globally integrated legal system. South Africa is the gateway to the rest of Africa and, in many cases, the economic engine that drives the African economy.

We need a new generation of American business leaders who are not afraid of Africa, but will embrace it in the 21st century. Minnesota businesses should be part of that effort. It promises to be a rewarding partnership for the state and for the people of South Africa.