2. Business Background
2.3. Market Overview
Creating productive employment for Africa rapidly growing young population is an immense challenge and a key factor for Africa prosperity. Currently in Africa we have increasingly new visionaries who are creating entirely new companies as the old imperial ones crumble mainly by adequate business plan default, we are preoccupied to help them for getting better results.
We believe that in a human services context the nature of the task is not trivial and in all likelihood is the reason for the employee being in the sector (Schepers et al., 2005). We setup our organization as a not-for-profit (NFP) business consulting services provider. We rely on a set of values in which extrinsic rewards are not the first consideration. We seek meaning in our activity and we more are motivate by the intrinsic rewardswhich are personal and internal responses including satisfaction in the accomplishment of getting foreign businesses success in Africa and the continent development thanonly focus on making our own prosperity. Fun and challenge are of greater significance to our managers than external pressures and monetary rewards. As Herzberg (2003), we argue that money is just a “hygiene factor”, and cannot be a source of motivation. From surveys, we found that the majority of existing business consulting services providers is essentially concerned with the crowding-out effect of extrinsic incentives, mainly monetary. We believe that money should not be the most important motivator for business consultancy services provider in Africa, over wise it becomes useless and fails to help Africans, because they can’t afford it. We believe that the performance of business consultancy services provider in Africa for the inherent satisfaction of work itself is more worthy than the attainment of a separable outcome from its performance.
2.3. Market Overview
Africa economic output increased from a gross domestic product (GDP) of $516-billion in 1995, to $1 855-billion in 2011. It continues to recover from the adverse effects of the global crisis and remains amongst the fastest growing regions of the World. This trend is expected to reach $2 545-billion in 2016. However, despite its growth, Africa attracted only 5.5% of World global foreign direct investment projects in 2011. The top investors in Africa are United States, France, United Kingdom, India, and the United Arab Emirates. Singapore, India and Malaysia are the top Asian sources of foreign direct investment in Africa, with investment stocks estimated at about $3.5 billion (cumulative approved flows from 1996 to
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estimated at about $1.9 billion. Meanwhile, African countries increase the number of intra-Africa investments, with foreign direct investment projects growing from 27 in 2003, to 145 in 2011, accounting for 17% of all new foreign direct investment projects on the continent.Foreign direct investment projects in Africa increased about 27% from 675 projects in 2010, to 857 in 2011. Developed markets accounted for 66% of the overall projects while emerging markets were responsible for the remaining 34%. Investing abroad is still a relatively recent phenomenon for many Asian firms, their transaction and information costs are higher when investing in Africa than in other Asian economies, and both host and home country regulatory frameworks often impose constraints. Since the early 1980s, China’s policies on outward FDI have evolved, moving and in the late 1990s the central Government began encouraging outward foreign direct investment and launched the “going global” strategy. A series of incentive measures accompanied the strategy, such as easy access to bank loans, simplified border procedures, and preferential policies for taxation, imports and exports. Bilateral investment treaties have been another facilitation measure adopted not only to attract foreign direct investment but also promote better protection to Chinese companies investing abroad.
Asian foreign direct investment is assuming greater importance, accounting for 10 per cent of the stock of foreign direct investment in the world. Asian newly industrializing economies have recently become relatively large investors abroad and some Asian firms have grown to rank among the top transnational corporations (TNCs) in the world. Indeed, such foreign direct investment in Africa is becoming an important and promising facet of the South-South economic cooperation. Asian economies have begun to build up their outward investment stock when they were struck by financial crisis in 1997 and have been growing in all major regions, but still tend to focus on intra-regional foreign direct investment. However, Asian outward foreign direct investment has become significant, and even though these cross border flows have so far remained largely limited to the Asian region, they arouse interest as potential sources of investment in Africa. This interest, which declined somewhat as a result of the Asian financial crisis of 1997-1998, was renewed following the recovery of the crisis-hit countries and the continuing steady growth of the Chinese and Indian economies. That can be explained by the perception gap that remains between investors with an established presence in Africa, who believed that only Asia represented a more attractive option, and
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less than $100 million per annum in the 1980s to $12 billion in 2005. A large proportion of these outflows have gone to East and South-East Asia as well as Latin America and the Caribbean. Africa accounted for only 3 per cent of China’s total foreign direct investment outflows in 2005, and for about $1.6 billion of Chinese foreign direct investment stock, which has a presence in almost 48 African countries. By 2000, some 500 Chinese foreign direct investment projects were known in Africa, and only 30 of them having investments of over$10 million. While about one third of China’s foreign direct investment projects abroad generated profits and another one-third were at break-even point, in Africa the returns were comparatively low. Still, more than half of Chinese foreign affiliates at least broke even. By 2005, China signed 117 bilateral investment treaties, including 28 in Africa. Most of the Chinese firms’ investments are in the form of equity joint ventures with African enterprises, though not in the case of recent resource-seeking foreign direct investment. While still small, foreign direct investment flows from Asia to Africa reached $1.2 billion annually during the period 2002-2004, and they are set to increase further in the coming years. They invest mainly in manufacturing, resource extraction, construction, trading and financial services. Asian small and medium enterprises have also become an important source of the new outward foreign direct investment, as more of them need to invest abroad to maintain and improve their competitiveness. Africa being seen as an attractive investment destination is expected to improve over the next three years $150-billion by 2015 a survey by advisory services company Ernst & Young (E&Y) has found.Since many African countries have moved toward of participatory democracy, which had in turn decreased armed conflict with significant improvements in trade agreements, regional integration and increasingly infrastructure development, the continent is well placed to press ahead with structural reforms and lay the groundwork for strong and sustainable growth in the medium term and would push it into the top league of foreign direct investments destination. Indeed, the rapid economic growth and industrial upgrading currently taking place in Asia provide ample opportunities for Africa to attract Asian foreign direct investment into both natural resources and manufacturing. With the growing recognition of the successful experience of East and South-East Asia, it is useful for African countries to examine the lessons that could be drawn from the development paths
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followed in that region, and to consider ways and means of strengthening economic cooperation with Asian economies. The fast-growing Asian economies have come to be viewed not only as successful cases that could provide examples of development paths for African economies, but, increasingly, also as economic partners, particularly for trade and investment. Africa could benefit from a rapid expansion of a dynamic, internationally competitive small and medium enterprise sector. However, significant investment opportunities coexist with barriers to investment and international trade. Many initiatives have been undertaken since the late to enhance Africa attractiveness for foreign direct investment, including the creation of commercial dispute resolution mechanisms and export processing zones. The main lessons drawn from experiences of Chinese foreign direct investment in Africa point to the importance of finding a suitable African partner, host government support, local market-oriented activity and technology transfer. Problems faced by Chinese enterprises operating in Africa are partly due to the economic environment of the host countries, a shortage of skilled workers, restrictions on foreign exchange, and inadequate or inappropriate incentives offered. Potential Asian investors are often unaware of incentives offered and agencies concerned with investment in Africa. Nevertheless, additional steps are necessary to realize the continent’s full potential as a foreign direct investment location, including improvement of its institutions by introducing legislation to facilitate investment and infrastructure development to support investments, measures to support identified subsectors such as technology, market and product development, links and networking.
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Our company is called ProBiz which derives from “professional businesses”. ProBiz will be registered as a limited liability company, Ltd. Its team members are a group of hard working people all with at least Master Business Administration degree, and Doctorate for some of them. ProBiz team leaders have a solid experience of doing international business and bringing value to small and medium enterprises. Everyone has at least 10+ year experience in his field and is recognized with high positions in his professionalism. ProBiz team members are living in different countries around the world. Indeed, Michel Kouda is from Burkina Faso, but currently living in Italy where he monitors a lucrative company; Samuel Yonkeu is from Cameroun, he is working in Quebec as a professor, managing an International informatics and business school in Ouagadougou and already doing consulting for small and medium enterprises in Africa; Thomas Compaore is a marketing and quality supervisor in an International company in Senegal and he is also teaching marketing and management courses in many African countries and has been a doing consulting for several years; Alexander Nkieta is a tourism board senior with a great entrepreneur skills living in Ghana; Paulin Ouoba is the owner of Non-Profit small enterprise at Niangoloko and a great professor at University of Nasso in Burkina Faso. Among of us, four people are already been exposed to Asian culture, especially, Taiwanese ones: Joceline Ouedraogo & Sarjo Khan who will be graduate by June 2013, Ouattara Mamadou who is currently working as a senior manager at commerce ministry in Burkina Faso and Prosper Zombre currently a global market access specialist for a Taiwanese telecom equipment certification body. The Webmasters, Tegawende Dayamba and Alfred Kabore live at Ouagadougou; all are well experienced in their field. With the effort of these outstanding people, our customers will be equipped with both academic and practical resources in order to full cover each stage of value chain. ProBiz will be Africa based, but at the beginning stage our consultants will work virtually, for reducing the overhead expenses of a rented office space, making services more affordable for our clients, and increasing the ability to start the business with less capital costs.