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West Africa – A new frontier for Canadian business

By David Kilgour, Secretary of State (Latin America & Africa)
This article appeared in the 2nd Quarter 1998 issue of AfriCan Access Magazine

April 1998

West Africa is becoming a new frontier for Canadian business. Evidence of this was abundant on my recent business development visit to Côte d’Ivoire, Ghana, Mali, Guinea and Togo. Most striking was the enthusiasm of all to do business. Active steps are being taken to implement regulatory regimes making these countries more attractive to foreign investment.

In less than a year, Canada’s exports to Africa as a whole have grown by fully 24 per cent. In sub-Saharan Africa alone, Canadian exports last year amounted to $775 million, up by $115 million from the previous year. The potential of this continent of 700 million people remains enormous.

The business development mission involved approximately 20 Canadian companies, most already active to some degree in Africa. Playing a key role in the mission was Etobicoke-Lakeshore MP Jean Augustine, a member of the House of Commons Standing Committee on Foreign Affairs and current head of our parliamentary council for micro-credit.

Canadian Strengths

Canadians are well positioned to compete in West Africa, especially with our ability to do business in both major languages – English and French. Our ties through the Commonwealth and Francophonie, our history free of colonial exploits, and our technological expertise, particularly in resource development and services such as telecommunications, all give us a leg up.

The timing for business involvement in West Africa is excellent. For most countries, the economic instability of the 1980s has been addressed through economic reforms. In one country after another elected governments have taken the helm, often backed by capable technocrats, who are encouraging direct foreign investment.

Among the West African countries the mission visited, Côte d’Ivoire clearly has the most advanced infrastructure. This is partly a legacy of French investment; in part it’s a result of domestic stability, generally good governance, a positive trade environment, and a people with a history of working together. Abidjan, the financial capital, has been dubbed "The Manhattan of West Africa." Côte d’Ivoire is a magnet for peoples of the region, with their skills and problems.

Regional Stock Exchange

While in Abidjan, an agreement was signed under which CIDA will contribute $4 million in Canadian technical assistance to the Central Bank of the West African States to establish and operate a new regional stock exchange. The software to be used was developed by a Calgary firm, EFA Software Services Ltd., while the management consulting is from a Montreal firm.

Rich in such traditional tropical agricultural products as cocoa, coffee, and palm oil, as well as timber, Côte d’Ivoire is now developing more advanced products. Canadian companies are becoming active in mining, petroleum, transportation, telecommunications and finance. Although there is plenty of competition from French companies, Canadian technology often gives us an edge.

Ghana

Ghana is a major Anglophone country of the region. In recent years it has undergone a transition towards greater stability and civilian leadership. Through the tough years of the 1980s and early 1990s, Canada was a strong backer of Ghana, and Canadian firms are thus well placed to reap the good will. Our companies are particularly active in Ghana’s mining sector, where gold and bauxite are important, but they are also moving into new fields such as telecommunications, energy and services.

In the Sahelian region, geography has created a tough frontier for Western business. Mali, although struggling with the least developed infrastructure of any of the countries visited, more than makes up for this with its forward-looking government. President Alpha Oumar Konaré of Mali, who was elected after the previous military government returned the country to civilian rule, is typical of a new kind of African leader. Not only has he implemented progressive economic reforms, but he has taken other initiatives to combat arms proliferation and to end the guerrilla warfare that disrupted life in Mali’s north. In the period since the end of hostilities in 1996, private sector investment in Mali has blossomed. About 23 Canadian companies are now active in Mali, with mining, transportation, and water development providing opportunities aplenty.

A Region of Differences

Each of these countries offers different openings for Canadian businesses eager to move into the new frontier. Côte d’Ivoire, Ghana and Mali all have Canadian embassies with staff who understand the environment and can help pave the way for Canadians exploring opportunities in the region.

The business people on the mission were mostly very bullish about West Africa. Some extended their travel to include countries they had not been planning to visit. They were impressed by the receptiveness they received when we met with presidents, prime ministers, and other government officials.

I have often said that I am an Africa optimist. The opportunities witnessed in West Africa on the recent business development mission have strengthened that optimism considerably.