07-4835. Trade Mission Statement: Sub-Saharan Africa Trade Mission to Ghana, Nigeria, and South Africa; March 3-11, 2008

Mission Description

The United States Department of Commerce, International Trade Administration, U.S. Commercial Service is organizing a Trade Mission to Sub-Saharan Africa March 3-11, 2008, to help U.S. firms find business partners and sell equipment and services in Accra, Ghana; Lagos, Nigeria; and Johannesburg, South Africa. Targeted sectors include, but are not limited to, energy, health care, information technology, safety and security, and telecommunications. The Director General for the U.S. Commercial Service will lead the mission, which will include business-to-business matchmaking with local companies, marketing briefings, and meetings with key government officials.

Commercial Setting

U.S. Total trade with Sub-Saharan Africa increased 10 percent in the first half of 2007 from the same period in 2006, as both exports and imports grew. U.S. exports increased by 30 percent to 46.7 billion, driven mainly by increases in parts for oil field equipment, vehicles and parts, aircraft, wheat, platforms for offshore oil drilling, non-crude oil, and medical equipment. Of the top five African destinations for U.S. products, exports to South Africa rose by 8 percent and to Nigeria by 42 percent. As the markets in Sub-Saharan Africa continue to show substantial growth and potential—encompassing a burgeoning consumer base of 650 million people—Ghana, Nigeria, and South Africa stand out as particularly advantageous destinations for U.S. exporters seeking to leverage business opportunities in this exciting region.

Market Overview

Ghana

A strong multiparty democracy, Ghana has long served as a model for other African nations due to its free and fair elections and rule of law. Accordingly, Ghana offers not only an increasingly sophisticated market of 22 million consumers but also a solid platform from which to access west Africa's regional market of 250 million potential customers. Ghana has qualified for Millennium Challenge Account funds, available only to countries that have adopted good governance policies. In 2006 Ghana ranked among the top 10 reforming countries in the world. Its per capita output is among the highest in West Africa, and its steady economic growth over the past four years—6.2 percent in 2006—is expected to continue, driven by industry and services.

Ghana is in the midst of an energy crisis, controlling an estimated 600-megawatt (MW) demand deficit through load shedding. With upcoming completion of the West African Gas Pipeline, which will provide relatively inexpensive gas for industrial usage, the government plans to increase generating capacity to 2600MW, primarily through gas-fired plants financed by independent power producers. Plans to restructure the electricity sector include the eventual privatization of Tema plant operations and allowing more private-sector thermal generation. The government is to spend $470 million in the next three years to improve energy generation and has signed purchase agreements with three U.S. suppliers for high-speed diesel generators totaling 90MW. The Volta River Authority, Ghana's power-generating agency, has procured a 126MW plant soon to go on line. Various power generation projects under review include a 300MW thermal power plant in Tema and expansion of an existing plant in Takoradi to 110MW. In addition, a Chinese-funded dam project aims to add an additional 400MW generating capacity within the next five years.

Ghana's health care delivery system, among the best in the region, is constantly challenged to meet the needs of its growing population. Lacking the relevant manufacturing base, the country relies almost exclusively on imported medical devices. Equipment for diagnostics, intensive care, and surgery; ambulances and related equipment; and disposable supplies are in high demand.

The United States is the major supplier to Ghana's $28 million import market for computers and accessories, providing desktop personal computers, floppy diskettes, printers, and monitors. A growing number of firms serve the Ghanaian hardware and software markets. Local assembly is growing, while improved local servicing capacity, coupled with growth of offshoot activities such as shareware, software design, computer graphics, and systems consulting, drives demand for information technology. The government has removed the Value Added Tax on imported computers supplied to recognized educational institutions.

In 2007, Ghana hosted the U.S.-Sub-Saharan Africa trade and Economic Cooperation Forum, which focused on optimizing the benefits of the African Growth and Opportunity act (AGOA). Growing recognition of Ghana as an advantageous venue for diplomatic, educational, and commercial activities suggests potential for opportunities in safety and security sectors.

The government's liberalization of its telecommunications sector spurred significant annual growth in recent years. There are 2 land providers, 4 cellular companies, 10 paging service providers, 128 Internet service providers, 106 VSAT data operators, and 61 public/corporate data operators. FM stations number 128, and TV stations 24. Imports of telecommunications products are mainly for landline projects, private mobile telephone services, and broadband data transfer services. There has been a tremendous increase in the subscriber base of mobile operators as they attempted to out compete each other.

The rapid increase in the market size of the telecommunications sector has resulted in a high volume of imports of telecommunications equipment, including switching and transmission equipment, telephone, and fax machines, radio and television equipment, and cellular radiotelephones. One mobile provider, Kasapa, upgraded from analogue equipment to digital CDMA, and Ghana Telecom installed a pre-paid platform for its landline service. Areeba, the leading mobile phone service provider, extended its service to rural areas. Countrywide, as landline density remains very low (2.9 lines per hundred people) cellular companies with prepaid cards have had made major gains in market share. While mobile penetration into rural areas has recently increased tremendously, the areas still remain largely under served by both landline and cellular companies. The national network operators have programs underway to meet the performance targets under their licenses. Ghana Telecom has been expanding to meet a 400,000-telephone line requirement.

Nigeria

Nigeria, the most populous country in Sub-Saharan Africa at over 120 million people, continues to push forward economic reforms, while its $121 billion GDP is growing at around 10 percent. Pending development of its agricultural and non-oil industrial capacities, the country continues to depend heavily on imports. Last year Nigeria received a “BB-” rating from two international credit rating organizations, Fitch-Ratings and Standard & Poor, which acknowledged the stability of the Nigerian currency and the government's commitment to economic and social reforms. Nigeria holds tremendous potential for U.S. businesses willing to conduct due diligence and draw on Commercial Service assistance in screening prospective partners and customers.

One of the world's top ten oil producers, Nigeria holds oil reserves of about 36.24 billion barrels and gas reserves estimated at 187 trillion standard cubic feet. The life expectancy of Nigeria's crude oil reserve is 35 years, and that of its gas reserves is more than 109 years. Natural gas, increasingly seen as an enormous income-generating resource, is now being captured for processing and sale both regionally and abroad. Nigeria's oil and gas sector accounts for over 90 percent of the country's foreign exchange earnings, and U.S. equipment and technology account for at least 80 percent of imports in this sector. With increased movement of oil and gas activity into Nigeria's deep offshore areas, American companies are expected to maintain a dominant market share of imports of high-end oilfield machinery.

Like Ghana, Nigeria imports most of its medical equipment. Recent health care reforms have included introducing national health insurance, transforming eight teaching hospitals into centers of excellence for tertiary health care, and rehabilitating nearly 300 primary health centers. Plans to establish more HIV/AIDS testing and treatment centers, and to combat AIDS generally, will cost the Nigerian government an estimated $63 million. Nigeria's health care sector holds significant opportunities for professional training, given the dearth of expertise in many specialized fields and a near absence of cutting-edge technology.

Factors spurring interest in high technology include the government's plans for an information and communications technology park and the emerging success of the “Computers for All Nigerians Initiative (CANi)” program, for which Microsoft and Intel are supplying operating systems and processors respectively.

Nigeria's safety and security market offers potential in a wide range of sectors, with rising demand for products and services to protect its burgeoning financial and information technology sectors. Best prospects also include technologies for airport security; personal, residential, and industrial protection; and crime fighting.

Nigeria is one of the world's most profitable telecommunications markets, with monthly revenue from services averaging $615.4 million. Leading cellular mobile operators such as MTN Nigeria are said to generate as much as $138.5 million every month. Nigeria's emergence into the consumer market era is driving demand for improved telecommunications and information technology. The country's commercial centers are awash with ATMs as banks compete for customers, offering mobile banking and service delivery around the clock.

South Africa

South Africa's market size of 47 million people, well-developed infrastructure, productive economy, and pro-business environment make it a logical choice for many U.S. companies seeking to conduct business on the African continent. The country's GDP reached $587.5 billion last year, marking 5-percent growth. South Africa boasts a sophisticated financial sector with a stock exchange (Johannesburg Stock Exchange) that ranks among the top exchanges in the world. Thanks to the commodity-driven export boom and surging retail demand, a medium-term growth rate of 6 percent is attainable. Preparations for the 2010 FIFA World Cup, scheduled to take place in South Africa, are expected to increase demand for U.S. goods and services in a country that already ranks as one of the most popular destinations for U.S. exports on the African continent.

South Africa's rapid economic growth in recent years has resulted in demand for electricity rising faster than anticipated, creating the need for new power stations, pebble bed modular reactors, transmission and distribution equipment, systems control equipment, network upgrades, and refurbishment of turbines. Eskom, the state power company, estimates that up to $16 billion will be spent on new transmission and power generation infrastructure in the next five years. Eskom is investigating technological advances in the use of coal, its current fuel supply, and the use of alternative fuel sources (particularly gas and hydropower).

Although most of South Africa's medical equipment imports come from Europe, the United States leads in the supply of sophisticated high-tech medical equipment. U.S. companies are encouraged to consider a presence in the South African medical market. A number of large U.S. firms are already represented there, a situation that holds joint-venture potential for smaller and medium-sized U.S. companies offering specialized technologies that can be incorporated into existing operations. Rising crime rates in South Africa have created a market of opportunity for providers of safety and security equipment and services. Upgrading security has been identified as a top priority by businesses and homeowners, who are increasingly looking for external expertise and new digital technologies. Surveillance equipment, particularly CCTV, is the largest sector of South Africa's security market, which is valued between $85 million and $165 million.

South Africa's $12 billion telecommunications equipment market relies heavily on imports, more than 50 percent of which come from the United States. As South Africa prepares to host the 2010 FIFA World Cup, industry sources predict a growth rate in telecommunication equipment of over 20 percent, beginning in 2007, particularly in the area of Second Generation Network Solutions products and equipment.

Mission Goal

The goal of the Sub-Saharan Trade Mission is to provide U.S. participants with first-hand market information, access to government decision makers, and one-on-one meetings with business contacts, including potential agents, distributors and partners, so they can position themselves to enter or expand their presence in the African market.

Mission Scenario

The Sub-Saharan Trade Mission will include three stops: Accra, Ghana; Lagos, Nigeria; and Johannesburg, South Africa. In each city, participants will meet with new business contacts. Additional business meetings can be arranged in Johannesburg or Cape Town through the Gold Key Service for an additional cost of $400 per city. This fee is exclusive of interpreter and transportation costs, estimated at $200.

Proposed Timetable

Accra

Monday, March 3, 2008: Market briefing. Meetings with government and industry officials, Reception.

Tuesday, March 4, 2008: One-on-one business appointments.

Wednesday, March 5, 2008: Morning departure to Lagos.

Lagos

Wednesday, March 5, 2008: Reception, Market briefing.

Thursday, March 6, 2008: Meetings with government and industry officials, One-on-one business appointments.

Friday, March 7, 2008: One-on-one business appointments.

Weekend departure to Johannesburg.

Johannesburg

Sunday, March 10, 2008: Reception at the Ronald H. Brown Commercial Center.

Monday, March 10, 2008: Market briefing, Meetings with government and industry officials, One-on-one business appointments.

Tuesday, March 11, 2008: One-on-one business appointments.

Mission concludes Tuesday evening. Participants may return to United States or remain in South Africa for additional appointments arranged separately under the Gold Key Service.

Criteria for Participants' Selection

• Relevance of a company's business line to mission goals.
• Timeliness of the company's signed application and participation agreement (including the participation fees).
• Minimum of 8 and a maximum of 15 participating companies on the mission.
• Potential for business in Sub-Saharan Africa for the company.
• Provision of adequate information on the company's products and/or services, and the company's primary market objectives, in order to facilitate appropriate matching with potential business partners.
• Certification that the company meets Departmental guidelines for participation. Generally, a company's products or services should be either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the value of the finished product or service.

The participation fee is $3,950 per firm, which includes one representative. The fee for each additional firm representative is $750. Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar—http://www.ita.doc.gov/​doctm/​tmcal.html—and other Internet Web sites, press releases to general and trade media, direct mail, broadcast fax, notices by industry trade associations and other multiplier groups, and publicity at industry meetings, symposia, conferences, and trade shows. Recruitment for the mission will begin October 1, 2007, and conclude December 10, 2007. Applications will be vetted on a rolling basis. Applications received after December 10, 2007, will be considered only if space and scheduling constraints permit. Any partisan political activities (including political contributions) of an applicant are entirely irrelevant to the selection process.

Contacts

Jessica M. Arnold, International Trade Specialist, Global Trade Programs, U.S. Commercial Service, Washington, DC 20230, Tel: [phone]/[e-mail].

Diane Jones, Senior Commercial Officer, U.S. Commercial Services, Accra, Ghana, Tel: [phone]/Fax: [phone], [e-mail].

Larry Farris, Senior Commercial Officer, U.S. Commercial Service, Lagos, Nigeria, Tel.: [phone]/Fax: [phone], [e-mail].

Craig Allen, Senior Commercial Officer, U.S. Commercial Service, Johannesburg, South Africa, Tel.: [phone] Fax: [phone], [e-mail].

Nancy Hesser,

Manager, Commercial Service Trade Missions Program.