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Africa Policy
Broward County Policy On Africa

Background 

Africa’s total population is about 825,000,000 people and roughly ($2.2 trillion) GDP. North Africa’s Total Merchandise Trade with Florida in 2004 was $70.9 million and Sub-Saharan Africa’s Total Merchandise Trade with Florida in 2004 was $541.6 million. Africa’s goals for 2015 focus on Global partnership for economic development. Increase in youth employment. Build their technologies and telecommunication systems. Africa’s economic growth and public health go hand in hand for the continent’s growth. The IMF predicts 3.9% growth in South Africa, 6.6% growth in Uganda, 4.9% growth in Kenya and 4.9% growth in Nigeria in 2006 year end GDP’s.

Nairobi which is Kenya’s capital has attracted a high concentration of life science capabilities and resources. The Life Science Industry has a lot of opportunities in Africa due to its mission to solve health, agricultural and environmental problems. One of the major impediments facing African development efforts is the widespread incidence of communicable diseases, in particular HIV/AIDS, tuberculosis and malaria. Only 16 doctors are available per 100,000 inhabitants against 253 in industrialized countries.

The fishing industry is an important sector of the South African economy, employing thousands of people in the commercial sector and in related sectors, and grossing about $404 million. South Africa accounts for 26% of total U.S. imports out of Africa, the top products being mackerel, salmon, sardines, and herring. South Africa is also one of the largest importers of fish from the U.S. – 36% of the total African imports. Tanzania accounts for 8% of total U.S. exports to Africa. Southern African countries mostly import crustaceans, tuna and shrimp.

The South African Marine industry has recently undergone an efficient industrial restructuring that makes it internationally competitive with respect to price, quality and durability. Its products are highly praised and have won a number of international awards. It also has a fine reputation among American boat designers, who often allocate orders and refer clients to South African boat builders. The current annual turnover of the South African boat-building industry in terms of actual production of boats is $220 million. The South African industry has had to keep up with technological advances in order to remain internationally competitive. Major advances in boat-building technology over the past few years include the development of new moulds and new designs, and the use of hi-tech materials. Kenya, Nigeria and South Africa all have similar main industries of small commercial ship construction and repair.

Uganda has substantial natural resources. Agriculture is the most important sector of the economy, employing over 80% of the work force.

The film industry in Cape Town is viewed as one of the top five growth industries in the region. Foreign production companies are lured not only by the Cape’s scenic beauty and filming infrastructure, but also by the fact that filming in Cape Town costs 20% less than in Australia and 30-40% less than in Europe or the U.S.

Disadvantages

A major challenge is the lack of interest in the African market and the prevailing negative perceptions in the U.S. market place about Africa as a high-risk business environment.

Challenges that need to be addressed for two-way trade include the high freight costs; the lack of infrastructure; lack of market information and U.S. sanitary regulations. Financing operations on the continent continues to be a problem. Additionally, business in South Africa lacks an export strategy.

Advantages

In the fishing industry U.S. suppliers exporting seafood to Africa is advantageous due to the rapid population growth, low tariffs and existing credit programs. The U.S. also has an abundant supply of cracker, mackerel and herring and U.S products are generally perceived as high quality. Advantages for African exporters are that the U.S. market offers opportunities for African products, especially under the provisions of the African Growth and Opportunity Act. Sub-Saharan Africa has an abundant supply of lobster, shrimp and tuna that could be exported to the U.S.

The South African boat-building industry has grown by some 120% since 1994, with 83% of the growth in real terms coming in the form of exports, especially to countries with strong currencies, such as the US, Holland, United Kingdom and Germany. Due to declining disposable incomes in South Africa, the domestic market has become stagnant, with few growth prospects. However, the export market is particularly active due to favorable pricing as a result of the devaluation of the Rand against foreign currencies.

Kenya has been successful in attracting world class life sciences researchers and continues seeking viable commercialization. As these industries grow they become better candidates for direct foreign investments in the U.S. and they become more substantial trading partners because they are earning more so they can spend more.

Recommendation

Given the advantages and potential development associated with Uganda, Nigeria, Kenya, and South Africa, Broward County recommends the exploration of increase trade opportunities.

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