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U.S. Exporters Urged to Aggressively Market to Sub-Saharan Africa

FOR IMMEDIATE RELEASE June 10, 2007

Media Contact Name/Phone: 

Marianna Ohe, (202) 565-3200

Contact: Marianna Ohe, (202) 565-3200

WASHINGTON, D.C. -- Members of the sub-Saharan Africa Advisory Committee (SAAC) of the Export-Bank of the United States (Ex-Im Bank) called on U.S. companies to sell more aggressively to sub-Saharan markets. The recommendation was made during the group's quarterly meeting at Ex-Im Bank headquarters in Washington, D.C.

Ex-Im Bank Chairman and President James H. Lambright said the Bank is committed to financing U.S. exports to sub-Saharan Africa, but the first requirement is for U.S. companies to successfully sell into the region. Lambright noted frequent remarks by potential African buyers who want American companies to be more aggressive in their markets.

Exports to Africa from the United States in 2006 totaled $12.2 billion, an increase of almost $2.8 billion over the previous year. In 2006, Ex-Im Bank financed $532 million in U.S. exports to Africa through 145 transactions. While the United States remains Africa's largest trading partner, China's trade with Africa has grown 66% from 2004 to 2006 according to Sherry-Lee Singh, Director of Market Research and Member Services at the Corporate Council on Africa.

Singh said U.S. companies seeking to do business in Africa enjoy a number of strengths, including U.S. technological leadership in information and communication technology (ICT), oil and natural gas exploration and production, heavy equipment and other sectors. She said Americans enjoy brand positioning and are the preferred business partner for a number of African countries who value technology transfer, training and project expertise.

John W. Rauber, Jr., John Deere & Company's director of international affairs, discussed his company's strategy in assessing the critical factors to determine market emphasis. Is the market sustainable? Is there scale? Does the company have the right product offerings and the right distribution channels? Is there adequate financing as well as workforce quality and skills in the host country?

In Africa since 1962, using both dealer and distributor models, John Deere has been very successful in the African market, Rauber said. He expressed his optimism that John Deere's on-going strategic review of the market will result in an even more aggressive marketing initiative over the next several years.

Diane Willkens, president and CEO of Development Finance International, Inc., suggested American companies need to include in their marketing strategies the investments being made by the World Bank and the African Development Bank in the region.

Willkens outlined the factors her company takes into account when recommending to a client that they should focus on any particular market: strength of the banking sector; the macro-economy of the country and per capita GDP; funding ranking and risk exposure level by the international financial institutions; the corruption index; quality of the basic infrastructure in the country; the specific product focus of the client and the percentage of the GDP for that product's sector.

Last year, for the third year in a row, sub-Saharan Africa recorded growth in the 5 to 6 percent range. Growth this year is expected to increase by 6 to 7 percent. The World Resource Institute and the International Finance Corporation identified sector requirements in Africa as: Housing $42.9 billion, Energy $26.6 billion, Transportation $24.5 billion, Health $18 billion, ICT $4.4 billion, Water $5.7 billion and Food (seed, fertilizers, pesticides, farming equipment, irrigation systems, etc.) $215.1 billion.

Senior Vice President Fred Berger of The Louis Berger Group, the largest U.S. design engineering firm on the continent, said that American firms are often dissuaded by the relatively small size of projects in Africa, especially when it comes to consulting opportunities, but added that the Africa Growth and Opportunity Act (AGOA) is doing its job. Ms. Singh earlier said that AGOA trade has grown threefold to $44.2 billion since 2003. Non-oil AGOA growth has been much more moderate, increasing by just 3.6%. Berger expressed his industry's view that U.S. companies' being involved in the early project planning and design phase of projects places U.S. manufacturers in a competitive position at the procurement point.

Participants in the meeting concluded by reaffirming their belief that more U.S. companies need to become acquainted with business opportunities in sub-Saharan Africa. Ex-Im Bank Board member Joe Grandmaison said the U.S. government's efforts are important - be it Ex-Im Bank's willingness to accept additional risk or the Department of Commerce's information and assistance becoming more transactional. However, Grandmaison stressed, The first and most necessary step is the decision by U.S. corporate decision makers to commit themselves to the world's last emerging market before it is too late.

Ex-Im Bank, an independent federal government agency, this year marks its 72nd year of helping finance the sale of U.S. exports, primarily to emerging markets throughout the world. The Bank last year authorized over $12.1 billion in export financing, including $3.8 billion to back U.S. small business exporters. Ex-Im Bank works with commercial lenders to help U.S. companies increase export sales and American jobs and minimize risk by accessing the Bank's financing and export credit insurance.

Additional information on Ex-Im Bank is available on its web site - www.exim.gov - and companies interested specifically in the African market are encouraged to sign up on the web site for the periodic Africa Update.