America Playing Catch Up in Africa

While most U.S. companies have focused international expansions on Asia and Latin America, China leapfrogged America in Africa. Now American companies are investing heavily to catch up. 

What's the Latest Development?


The C.E.O. of an American producer of machine engines says Africa reminds him of China or India a decade ago, when domestic consumer markets began opening to foreign trade. Now, thanks in great part to China, consumer and commodity markets are opening up across Africa. "China's exports to Africa last year totaled about $54 billion, up from $5.6 billion a decade before, according to the I.M.F. U.S. exports to Africa totaled $21 billion last year, up from $7.6 billion in 2000." Today, American companies are scrambling to catch up.

What's the Big Idea?

In the last two decades, Chinese investment in Africa has approximately doubled while North America's has remained constant. And now, with domestic household expenditure in Africa equal to that of India, a sizable consumer market is opening. Africa has been a more obvious choice for China's low-cost consumer goods compared with America's costlier products. Chinese companies, for example, have marketed cheap, gas-powered electricity generators while American companies have struggled to market their more powerful, more expensive goods.

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