Lauri Elliott

Originally posted at htp://www.afribiz.info/?p=2137.

Shashank Bengali of McClatchey Newspapers wrote “Africa is gripped by one of the greatest population explosions ever recorded” in a recent article entitled, “Africa’s Perilous Baby Boom.” In fact, while it is widely reported that India’s population (1.6 billion projected) will surpass China’s population (1.4 billion projected) by 2050, Africa will beat both with a population close to two billion according to the United Nations Population Division.

Bengali paints a picture of the horrible conditions under which and into which many children are born in Africa.  However, the problem is the conditions not the population growth.  Africa is a continent that has vast resources, which if managed effectively, can sustain a booming population.  In addition, Africa as a region has one of the lowest consumption rates globally when compared to developed countries. 

In fact, this population boom is a tremendous global business and economic growth opportunity.  Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, shares the world can no longer expect U.S. and Western households to drive global economic growth.  Developing markets like China, India and Africa are the future economic growth engines.

This shift sounds frightening to many in the West, but no one has to lose.  Businesses and entrepreneurs globally need to shift their strategy to account for this phenomenon.  Remember, the United States served as a major channel for China and other countries to grow their economies.  The pattern does not have to change, but the roles the actors play.  Africa, China and India can be used to drive economic growth in the United States, Europe, and elsewhere, in the future.

Part of this shift requires a change in the way the African population is viewed.  C.K. Prahalad, in “The Bottom of the Pyramid,” points out that businesses have traditionally treated the poor and disenfranchised as victims instead of consumers.  Businesses tend to devalue these populations without taking into account the current and future value of these markets, if developed.  Businesses have the opportunity to create their own consumer markets while solving endemic problems like poverty.

Once businesses see Africans as consumers, they need to consider the challenges faced by their consumers and those challenges in serving them, including those painted by Bengali.  The key is to design a business model accounting for and overcoming these challenges. 

For example, Africa lags far behind in broadband coverage, yet the World Bank noted that broadband coverage contributes to economic growth.  Also, if it is available, it tends to be expensive.  Two companies, SEACOM and O3B Networks, have taken on the challenge to cover Africa with affordable broadband within five years.   SEACOM has already landed in over ten countries in Eastern and Southern Africa.

In addition to the potential, businesses need to consider the importance of timing and position.  Now, is a perfect time for many businesses to position themselves in the African consumer markets.  Nations recognize this.  While China looks to Africa resources, it is not the only reason.  John Lee, in “China Woos Africa” points out that China is positioning itself to take advantage of the growing (in size and income) African consumer market. 

In another example, could the potential in the African consumer markets be one reason the U.S. government is shifting from supporting food aid in Africa to investment in agricultural systems?  Remember, part of the role of  diplomatic missions in foreign countries is to further the interests, including economic, of a nation.

On a final note, the issues and problems of Africa continue to provide fodder for the media more than the potential of Africa.  But there is a hidden message in all of it for entrepreneurs.  Entrepreneurs will recognize the challenge of Africa not as perilous or problematic, but as potential and powerful markets.

“The process for seeking capital, or funding, for a business is an ongoing task that entrepreneurs need to understand,” says Patrice Backer.  Mr. Backer is Chief Operating Officer for Advanced Finance and Investment Group (AFIG).  He joined us for our November 4, 2009 segment, “Preparing Your African Venture for Investors.”

We opened the show with an overview of private equity funding options for businesses based on their lifecycle.  There are essentially two phases – start-up and growth/expansion.  During the start-up phase, businesses seek pre-seed, seed or early stage funding.  This start-up phase is connected with what its called venture capital.  Newer firms present higher risks, so there are certain types of investors, venture capitalists, who focus on these types of firms.  Backer noted that venture capital is still not a strong option in Africa.  The exception is South Africa which has a more mature market.

In the growth and expansion phase of an existing firm, there are also three funding cycles – second stage, third stage and bridge funding.  There is also an option of buy-out.  Growth and expansion funding for existing firms is the focus for the majority of private equity firms with an African portfolio.  Backer explains that it provides a good middle ground for investors – they get good performance with lower risk.

Backer says that investors in private equity funds in Africa are development institutions, private sector or a combination.  He says that development institutions, often affiliated with governments, have a higher tolerance for the risk environment in Africa so they are consistent contributors.  When the global economic crisis hit, it was private sector contributors who mostly pulled out of African investments.  However, it’s important to note the predominant reason for withdrawing investments was the need for cash not a lack of performance.  In fact, the only African country that had negative growth during this period is South Africa.

When firms are looking for private equity funding, Backer has three recommendations.  First, the firm should have a solid business plan.  Second, the firm should be organized, demonstrating it can handle all aspects of the business operation from customers to legal requirements.  Third, the owners should not shy away from hiring professional, e.g., financial and legal, to help them with the process.

Backer notes that there challenges which limit the private equity sector in Africa.  First, the legal and institutional frameworks conducive to private equity firms still lag in Africa.  Second, investments come mostly from foreign sources instead of local.  Once more local investments occur, it will shore up the number of foreign investors that come to the table.  One of the recent success stories is SEACOM, the undersea broadband cable provider for Africa.  SEACOM had a strong showing of both local and foreign investors.

To learn more from this insightful discussion, listen to the recorded show.  To learn more about AFIG, go to http://www.afigfunds.com.  To stay in the mix of venture capital and private equity opportunities in Africa, you may want to join one of the online communities like VC4Africa.

For additional resources about doing business or investing in Africa, go to our site – http://www.afribiz.info.

There is a ground swell of interest growing about business and investment in Africa.   Too often that interest wanes because businesses know very little about how to evaluate and enter opportunities in Africa.  This segment, “Practical Insights for Investing in Africa,” started a three-part series on investing in Africa to help those interested take those first steps.

We were joined by Attorney Peter Hansen, who specializes in African Investment Law.  Also, Professor Richard America, who teaches a course on investing in Africa at Georgetown University and specializes in management development in Africa, contributed to the conversation.

Throughout the discussion, we emphasized a critical element for any venture into Africa – a focused strategy.  For investment, the investment plan is your instrument.  Some issues to consider are:

• What are your financial goals?
• How much money do you have to invest?  Have you established a budget?
• What level of risk can you tolerate?  What returns do you want?
• What is your investment timeframe – short-term, mid-term and long-term?
• How much effort will go into managing the investment?
• What are the tax issues with which you will deal?

Peter Hansen said that many investors want to “shoot from the hip” when they invest in foreign markets.  Hansen says that investors will have different plans and legal expectations for African countries, so preparation is essential.

Hansen also emphasized a good mindset for business/investment in Africa for both the investor and Africa is focusing on sustainable business opportunities.  This involves developing open and honest business deals.

For Americans investing in Africa, Hansen shared that there is anti-corruption legislation, the Foreign Corrupt Practices Act (FCPA), to which we must adhere.  He suggests that every investor establish an anti-corruption plan before venturing into international business and investment.

Richard America mentioned that there are investment opportunities in enhancing the value chains in Africa in sectors like timber, minerals.  These sectors have typically focused on exporting raw materials, but building local capabilities is becoming an imperative.  The host, Lauri Elliott, suggested that enhancing the capabilities of workers and managers can be a business strategy to help investors succeed in Africa.  African governments are looking for ways to develop their local workforce, so investors can create goodwill by helping them do so.

America also crystallized the importance of the local partner.  He shared what a critical asset a local partner, who is honest, trustworthy and knowledgeable, can be.

Both America and Hansen mentioned resources for investors and business people.  These are the Overseas Private Investment Corporation (www.opic.gov), African country investment and promotion agencies (http://www.afribiz.info/?p=647) and the World Bank’s Doing Business website (www.doingbusiness.org).

As a final note, America suggests to evaluate which country to enter, check out the countries that have received development funds from the Millenium Challenge Corporation (www.mcc.gov).  Countries go through rigorous analysis for policies promoting economic and political freedom before receiving funds from MCC.  Some African countries that passed the challenge include Benin, Kenya and Morocco.  Several other African countries, e.g., Liberia and Malawi, are eligible to receive funds and are currently going through the approval process.

Attorney Hansen prepared a brief on the issues he raised, which you can download from http://media.afribiz.info/practical-legal-issues-investing-africa-hansen.pdf.   To access the archived show, check out http://www.blogtalkradio.com/afribiz/2009/10/28/Practical-Insights-into-Investing-in-Africa.

To learn more about doing business in Africa, first visit our radio show page at http://www.blogtalkradio.com/afribiz.  Then, visit our information portal at http://www.afribiz.info.

Exporting is the commercial activity of selling and shipping good and/or services to a foreign country.  It is typically seen as a growth and expansion strategy for an established firm.  However, even start-up firms can find foreign markets more attractive than home markets. No matter the rationale for exporting, the approach is to enter the market cost efficiently and reach a break-even point as soon as possible. 

An export-ready business has considered the following: (1) company/product/service strengths, (2) rationale and objectives for exporting, 3() growth potential in other markets for products and services, (4) context of foreign country and the industry in the foreign country, (5) legal and regulatory requirements, (6) target market in foreign country, (7) financial requirements and (8) market entry issues.  We zoom in on market entry strategies in our discussion, “Preparing for Exporting – Getting to the Customer,” on AfribizTalk on October 21, 2009.

We were joined by two experts – Dr. Patrick Wilson and Dr. Emeka Nwankwo.  Dr. Patrick Wilson, Administrator of Big-Africa Partnerships Secretariat (BAPS), shared how the technical issue of labeling impacts the marketing of an African good exported to the United States.  Dr. Emeka Nwankwo, CEO of Vertical Optimization LLC, shared the process they use in Export-Path , which illustrates both the issues exporters should address and an approach for success.

Dr.  Pat indicated labeling should be informative, truth and not misleading.  Also, anything you put on labeling you must be able to prove.  Therefore, you should follow the mantra, “Do what you say and document what you do.”

Dr. Pat stressed the importance of having a good relationship with the distributor and buyer of your product in the foreign market.  Since in many cases you will not be local, the distributor and buyer will handle the presentation and placement of your product to your potential customers.  You want to work with those who will place your business opportunity as a priority.

Dr. Pat’s point leads into the larger discussion of export readiness.  There is a distinct difference between being export “willing” and export “ready.”  You may want to export, but have you developed the strategies and capacity to do so?

Dr. Nwankwo said there are three key challenges faced by exporters.  First, exporters need to access appropriate information to help shape their decision about exporting. We agreed that this is a key gap in how many businesses approach exporting.  Two, exporters need to have appropriate resources, e.g., human capital, equipment, and financial capacity.  Three, exporters need access to the marketplace, meaning the physical process of getting the products or services to the customer.  This includes elements like customs clearance, transport, warehousing, distribution and marketing.

We finally zoomed in on the challenge of access to information.  This is a challenge consistently mentioned by experts and clients alike.  Dr. Nwankwo says information, or the lack thereof, impacts a decision to pursue or not pursue exporting.  The first consideration is the exporting business concept.  This “straw-man” serves as input to the information gathering process.  It could be an existing business plan along with basic information about the idea for exporting, e.g., rationale and objectives, potential export country, target audience, timing, issues.

According to Dr. Nwankwo, the Export-Path process walks potential exporters through four key steps.  These steps include considering the concept, gathering intelligence on the opportunity, developing the product prototype and completing a risk analysis. After gathering the intelligence, potential exporters will be able to decide to pursue exporting or not. After completing the risk analysis, an export plan is generated.  The export plan is key to acquiring finance, if needed, for developing production capacity.

Since appropriate information is critical, we recommend that you first seek out and review existing information that is readily available and free.  Our Afribiz Info Portal will help you do just that.  In addition, we provide an on-demand seminar outlines a path for plunging into business in Africa.  It can also be applied to other ventures into international business.  The seminar, “Setting a Path for Success in Africa: in Business, Investment and Life,” is also available at the Afribiz website.

Listen or download the recorded radio show here.

Check out other AfribizTalk shows here.

I write a monthly article for Afribiz to help businesses focus on how to strategically and practically get business done in Africa.  This month pose questions for determining which countries might be most conducive to starting new ventures in Africa.

Originally posted at http://www.afribiz.info/?p=1092.

There is no lack of opportunity in Africa. But the road to converting those opportunities to business success is often paved with obstacles. The question becomes not what opportunities exist in Africa, but how to make them work. If we look at opportunities only, we might focus on countries with large populations like Nigeria and Ethiopia.  In doing so, sometimes the best place to successfully start a business in Africa is overlooked.  For instance, in some sectors it might be easier and more impactful to start in Namibia than South Africa even though it has a smaller market.

Identifying an environment that promotes the development of your business can be considered a key strategic decision.  It is more important to establish a successful business model, which can be replicated and expanded when you start a venture in Africa.  While economic opportunities abound everywhere, you need to determine which environments will leverage your strengths to take advantage of those economic opportunities. Consider the following questions, quick facts and resources to inform your decision.

1. Which African countries demonstrate the best overall governance?  Good governance is a boon for business and economic growth through the constraint of corruption.  According to the Ibrahim Index of Good Governance 2009 developed and maintained by African institutions, the top seven governance performers in Africa are Mauritius, Cape Verde, Seychelles, Botswana, South Africa, Namibia and Ghana.  Of special note, Rwanda was recognized by both the World Bank and Transparency International for making significant improvements in the last few years.
2. Which African countries possess the most economic freedom?  While there is no single definition of economic freedom, one of the key components is the ability to enter and compete in markets.  According to the Index of Economic Freedom, the top seven African performers compared globally are Mauritius (18^th), Botswana (34^th), South Africa (61^st), Uganda (63^rd), Namibia (71^st), Madagascar (73^rd) and Cape Verde (77^th).
3. Which African countries have the best environment to facilitate business?  The top seven African nations are Mauritius, South Africa, Botswana, Namibia, Rwanda, Zambia and Ghana, according to the Doing Business Report 2010.
4. Which African countries and regions have the best infrastructure for trade?  Infrastructure includes power, roads, rail, air and telecommunications.  Historically, the Southern Africa region has remained at the top in all categories with South Africa leading the way.  The Maputo trade corridor between South Africa and Mozambique is the most developed corridor on the continent.  In the broadband infrastructure arena, East Africa overtook Southern Africa this year. The East African countries involved include Burundi, Kenya, Rwanda, Tanzania and Uganda.  Currently, there are initiatives underway to link and modernize infrastructure across the continent.  For example, SEACOM is connecting the entire African continent to its international broadband infrastructure.  The company has connected most of their coastal nodes and is moving inland, working from the East coast to the West coast.  Countries like Malawi and the Democratic Republic of Congo will be online within six months.
5.  Which African nations have diversified economies? Diversification means there are broader economic opportunities present, strengthening the ability of the economy to absorb shocks.  The Diversification Index of the African Economic Outlook report says that the top seven most diversified economies in Africa are Tunisia (75%), Morocco (67%), South Africa (45%), Tanzania (30%), Senegal (22%), Kenya (22%) and Madagascar (21%).
6. Which African countries are experiencing the fastest economic growth? The top seven fastest growing economies (GDP%) in Africa this year are Ethiopia (7.5%), Congo Brazzaville (7.4%), Uganda (7.0%), Malawi (5.9%), Rwanda (5.3%), Tanzania (5.0%) and Liberia (4.9%), according to the Regional Economic Outlook for Africa October 2009.  They are also in the top twenty growing economies globally.   These countries are expected to maintain similar growth through 2010.  However, Congo Brazzaville (12.2% GDP) and Liberia (6.3% GDP) are expected to significantly outperform their growth from this year in 2010.

These questions serve to help you navigate doing business or investing in Africa.  However, they assume you have developed a high-level strategy. One of the first principles for doing business in Africa is do it with purpose.  A strategy provides the framework for implementing your business purpose in Africa.

We at Afribiz can help you formulate and implement that strategy. To start, learn from our online seminar, “Setting a Path for Success in Africa:  In Business, Investment and Life.” And visit other resources we have at www.afribiz.info.

Africa’s future is brighter now than ever before.  The global landscape is changing in favor of Africa.  I share some of my thoughts on this with Cedric Muhammad.

Originally posted at Afribiz.info.

Listen to a thought-proking interview with our chief strategist, Lauri Elliott, lead by Cedric Muhammad of the Black Coffee Channel.  The discussion speaks of the changing paradigm in the global economy, which will see Africa rise to a prominent place in its own right within the next generation.

Click here to listen to the recorded radio broadcast.

I am writing a series of articles for AfriBiz on the business landscape of important sectors in African economies.  This month gives you a tantalizing introduction to the agricultural sector.  There is alot of momentum growing in this sector.  You won’t want to miss the opportunities.  Enjoy the read, then engage with me to learn more!

In general, Africa journeyed from a net exporter to a net importer of agricultural products over the past fifty years.  This means Africa no longer produces enough food to feed its own people much less supply world markets.  The recent food crisis exacerbated the situation.  The future looks bleaker because the population of Africa will go from about 900 million to over 1.5 billion in 2050.

With so much arable land and bio diversity, why is Africa facing these challenges?  Research points out that Africa continued with a traditional agricultural paradigm, which produces the same products using the same methods by small-scale farmers.  In essence, Africa as a whole has not tapped into its potential.  With all the challenges the African agriculture industry face, the biggest impeder is the systems upon which it operates, according to a World Bank report.

From a business and investment perspective, the events of the past few years have pushed attention to developing sustainable, long-term solutions to the global and African food problems. Capitalized countries, such as China and South Korea, seek out arable land in Africa to assure food supply for their people and reduce reliance on imports. Foreign investors see the profit potential.  Deutsche Bank recently published a report called “Investing in Agriculture: Far-Reaching Challenge, Significant Opportunity,” which highlights the issues and opportunities for private sector stakeholders.  The question becomes will Africa benefit from others releasing its potential?

There are new business ecosystems and models combining existing structures with transformative innovations arising.  For example, instead of focusing money on large agricultural producers, the government of Malawi developed a stronger support network for its small-scale farmers.  It included simple innovations like fertilizer for higher yield crops.  One successful result is Malawi produced enough maize this year to feed its own people and sell the excess to world markets.

In a private sector example, Africa Invest Malawi (AIM) found success along similar lines with high quality crops like chilis.  AIM incorporated small-scale farmers in its commercial agribusiness ecosystem to increase overall output.  In both instances, the challenges of global and African food supply are met while broadly providing increased economic opportunities.

The impact of new business models like these will be felt throughout African economies. Agriculture already represents a considerable portion of African GDP, but imagine if it increased the annual income of 300 million people by even just $100 per year.  This adds 3 trillion dollars to African economies each year.  This is possible since 50% to 70% of the African population derives income from the agricultural sector formally or informally.  With more money flowing in the African economies, there is growth potential in other sectors that serve African consumers.

The business and investment opportunities in the agricultural sector are not just in production.  They exist along the entire value chain – from inputs to production to processing to wholesaler to distributer to retailer to consumer.  Also, there are opportunities in supporting sectors like finance, business management, and transport.  In addition, the opportunities scale from a single agricultural facility (small or large) to agricultural cooperatives/clusters to large producers/processors to entire segments.  Thus, opportunities are available to small and large investors and businesses alike.

For example, businesses like Kickstart make money by providing basic inputs to farming, e.g., irrigation pumps. Some firms like Yara, who develops agricultural trade corridors or ports, make money by building infrastructure.  Others like Google make money with a technology platform to provide agricultural information.

While the opportunities are endless, the key is to formulate a successful strategy.  Next year, Afribiz will launch products and services to help you shape a successful strategy for key sectors like agriculture.  In the meantime, visit the following information resources that give different perspectives on the agricultural business opportunities in Africa.

Food Business Opportunities in the African Consumer Markets

Making Agriculture and Food Market Opportunities in Africa Work

The Impact of the African Growth and Opportunity Act on Africa and America

List of Agriculture-Related Reports

Originally posted at www.afribiz.info.

The one-two punch of mobile phones and high-speed bandwidth on the African continent is fueling a boom in the ICT sector.  The  “Information and Communications for Development 2009” report by the World Bank says that voice communications offered through mobile telephony has lead the way for people in developing countries to realize the potential of ICT for economic and social development, and that broadband expansion is “catalytic” in the development of trade and e-government.  Expect the ICT sector to drive how you do business with Africa and open immense opportunities for doing business in Africa over the next five to ten years. 

Availability of high-speed broadband in Africa will increase over 200% in the next few years.  The first of the undersea fiber cable projects, SEACOM, provides high-speed international broadband to East and Southern  Africa .  This is not only important for the Internet market but also for the mobile phone market as consumer experience converges to the mobile platform.  In addition, the African mobile market remains one of the fastest growing markets worldwide.

Another interesting trend in the ICT sector is the rise of East Africa.  South Africa has been the clear leader in ICT sector development in Africa, but the Eastern African Community (EAC), including Rwanda, Burundi, Tanzania, Kenya and Uganda, has prepared itself to serve as a competitive ICT hub to South Africa and other global regions.  The SEACOM project removes one of the few remaining obstacles to this vision.

Many of the trends in the ICT sector are causing the African consumer markets, which were traditionally considered too small and too disconnected for many firms, to become connected and consolidated.  For the first time, African consumer markets are able to tap into real-time data and firms outside the continent receive real-time data from Africa.  For example, local farmers are able to check market data for their produce, empowering them during business deals.

As a business person or investor, the opportunities in the ICT sector are not only in the wave of infrastructure development projects, but also the products and services that can be provided over these “virtual” trade routes.  To give yourself a glimpse into some opportunities in the ICT sector in Africa, review the:

• “SA ICT Rocks!” article
• “Kenya is Calling” article
• “Moving Ahead with Education” article
• “ICT Business Opportunities in the African Consumer Markets” radio broadcast.

 You can also check out brief profiles for the ICT markets in each African country this month by subscribing to our daily BizBits twitter feed.

Originally posted at www.afribiz.info.

Economic zones are geographic areas designated to promote trade and economic development with in a country.  They have more liberalized economic policies than the countries in which they reside.  Typical advantages for businesses and investors include tax incentives, better infrastructure, institutions and processes for business, and freer flow of imports or exports.  Like economic hubs and regional economic communities, economic zones present an excellent strategic advantage for those interested in doing business in Africa.

There are different forms of economic zones, from free ports to information processing zones.  Currently, Africa has approximately 90 economic zones according to the International Labor Organization (ILO).  To learn about the global trends and issues associated with economic zones, check out a presentation from the Foreign Investment Advisory Service conference called “Economic Zones: Learning from Global Experience.

Many of the African economic zones started as export processing zones (EPZ).  However, several African nations have noticed declines in their viability and benefit alone, particularly with increased  competition.  They are looking to diversify development of economic zones to emulate the success of places like Dubai.  Kenya has recently announced they will be transforming their export processing zones to economic zones.  The Kenya Investment Authority and the Kenyan Export Processing Zones Authority can provide more information about their economic zones.

Another model for concentrating and leveraging economic activity is clusters.  Clusters are a group of enterprises in close geographic proximity that produce similar or related products in a particular field, e.g., nanotechnology, leather, diamonds.  Michael Porter popularized the concept of competitive clusters, but globally nations are seeing clusters as part of the future of economic policy.

 Last year, a continental forum, Pan-African Competition Forum (PACF), was established to promote the development of clusters on the African continent.  The PACF evolved from the initial success of the Innovation Systems and Cluster Programme – East Africa.  East Africa is setting the pace for competitive clusters.  Check out some of the clusters organized in the last several years here.

To explore the opportunities available with economic zones and clusters, the first step is to speak with the national investment promotion agency for any African country.  They serve as excellent launch pads for understanding the business path in a country.  For the website locations of African promotion agencies, check here.

To enhance your understanding of economic zones and clusters in Africa, we also are providing “BizBits” throughout this month.  These are snippets throughout each day focused on economic zones and clusters. To follow or join the BizBits feed, click here.

Originally posted at www.afribiz.info.

Regional economic communities (RECs) are intergovernmental bodies established to foster mutual economic development and cooperation amongst a group of countries.  For Africa, RECs will gradually lead to one continental economic community called the African Economic Community (AEC).  The AEC will be a pillar of the African Union.

Like economic hubs, RECs can provide a strategic focus for businesses and investors.   RECs focus on creating at least a free trade area, customs union and common market between member countries.  While this helps the member countries with cross-border trade and opening markets to the world, it also opens larger and more varied opportunities for businesses and investors.

As an example, if you planned to concentrate your business and investment ventures in the East Africa economic hub of Kenya, you would greatly benefit from the infrastructure and institutions developed for the East Africa Community (EAC).  The EAC consists of Burundi, Kenya, Rwanda, Tanzania and Uganda.  It has a combined population of about 130,000,000 compared to about 40,000,000 in Kenya alone.  For those who do business and invest in consumer markets, the difference in market potential based on size is excellent.

In fact, the EAC is a good regional economic community on which to focus.   It has many key developments, which may cause an explosion in economic opportunities in the next decade.  One is the backhaul fiber optic cable laid, connecting all the EAC countries with broadband capacity. In addition, there are a few undersea cable projects (e.g., EASSY, SEACOM) that will connect this backhaul to international broadband as early as June of this year.  Currently, this market is served primarily by expensive satellite infrastructure.

Another development is an improved rail system between the port city of Dar es Salaam in Tanzania to the interior countries of Burundi and Rwanda.  Not only will it improve the efficiency and speed of transport, but it is estimated to reduce the cost of transport by 40%.

Developments like these not only improve the business environment, but serve as investment opportunities through public/private partnerships.  These type of investments require large investment pools, but EAC is establishing a regional stock exchange with electronic trading system this year.  It will enable even small investors to invest in East African firms.

There are eight RECs in Africa recognized by the African Union, which you can preview and link to their individual websites from here.  To learn more about the EAC, visit www.eac.int.  There you will find the development strategy for the EAC through 2010.  You can also view the EAC Guide for Investors.

As always, we provide a monthly list of resources on doing business in Africa, which you can access here.  And this month, we have started daily short blurbs related to the monthly article to give you more insights into regional economic communities in easily, digestable chunks.  Follow or join the feed here.