Investors in international trade and business are beginning to fully understand that Africa is the next big market to explore. This vast continent is beginning to come into its own economically, and this growth has created a strong demand for U.S. goods and services.
Africa Is a Quickly Growing Market
Africa is experiencing some of the fastest economic growth in the world. According to the IMF's World Economic Outlook, the real GDP of the sub-Saharan region of Africa grew an estimated 4.8 percent in 2013. That same Outlook report forecasted real annual GDP growth rates would be higher than 5 percent in this region through 2019. This growth on its own should encourage import export businesses to look more closely at Africa, but when you couple that with the popularity of American goods, Africa suddenly skyrockets to the top of your markets to explore.
US Goods and Services Are Popular in Africa
In 2013, U.S. exports of goods and services to the continent of Africa reached $50.2 billion, which is an increase of 39 percent since 2009. U.S. merchandise exports to Africa reached $35 billion in that same year. This was a growth of 7 percent from 2012 and 45 percent from 2009. The numbers are even more impressive when you look at sub-Saharan imports from the U.S.: They totaled $24 billion in 2013, which was a rise of 58 percent over the 2009 value.
The two largest markets for U.S. merchandise exports in sub-Saharan Africa are the countries of South Africa and Nigeria. Between 2009 and 2013, these two countries contributed a total of 63.1 percent of the overall growth of U.S. goods exports to that region.
African Trade Is Driving Economic Growth at Home
The exports of goods and services to the continent of Africa supported 250,000 jobs in the United States in 2013. Nearly 31,000 companies exported goods to the region in 2012. Of these companies, a whopping 92 percent were small- and medium-sized enterprises with fewer than 500 employees. These companies accounted for almost 40 percent of the total value of exported international commerce from the U.S. to Africa.
Top Goods Exported to Africa
The top goods exported to sub-Saharan Africa in 2013 were $3.1 billion in oil, $2.3 billion in passenger vehicles, $1.3 billion in civilian aircraft, $1.1 billion in machinery parts and $1.1 billion in wheat. Between 2009 and 2013, exports of passenger vehicles, gold, construction equipment and poultry showed the largest increases — excluding oil, which far and away had the most value increase.
Experts in international trading speculate that there will continue to be increases in the value of passenger vehicles and construction equipment as Africa continues to develop and improve its infrastructures.