Several American companies are meeting with the American Chamber of Commerce (AmCham), potential investors and other United States government representatives in the 3rd annual African AmCham Summit as they seek to foster better economic and trade relations between the US and African governments.
General Electric (GE) Africa President and CEO Jay Ireland pointed out that it would be impossible for foreign companies to be successful in African countries without hiring local employees, but acknowledged that most foreign companies are finding it difficult to find competent employees.
“We need more trained technical people. The thought process needs to be around education and training people to provide a base of educated workers where we can draw from,” he said.
“The government has to supply the capability through high schools, secondary schools, colleges and universities so that the corporations can pick up and train people to take them from the engineering theory that they may learn in universities and give them practical capability in doing it,” he added.
The theme of the summit this year is ‘Enhancing American business in Africa,’ and aims to address how to boost business partnerships with America in line with President Barack Obama’s Africa Business Initiative, which aims to engage the US business community on policies that secure investment in Africa, facilitate trade between the US and African countries and introduce the American business community to the continent’s vast economic opportunities.
AmCham, whose mandate is to enhance the capability of members to capitalise on trade and investment opportunities in Africa, has stressed the importance of working with governments to boost American investments in Kenya and around the continent.
However, Ireland emphasised that African government’s must realise that forcing foreign companies to hire local employees is detrimental to business investment and urged them to adopt a culture of economic localisation that will drive investments once people see that their businesses can grow without involvement from local governments.
“What we can do is use a multiplicative effect of supply chain where the local companies can then build up their employee base and utilise that to leverage their capability of working with us to supply others, in order to build up a broader economic base,” he said.
“The aspect of forcing so many hires or so many specific legal structures tends to stifle investment rather than encourage it,” he emphasised.
Ireland spoke on the importance of localising American businesses to leverage on the available skilled labour in countries like Kenya, an action that would have the double impact of reducing unemployment and demonstrating to African governments that American investors are committed to contributing to socio-economic development of their host countries.
“Since we moved our Africa headquarters to Kenya 18 months ago, we have increased our staff numbers by 400, a good number of whom are Kenyan,” he revealed.
“While it is not right for governments to dictate the local content of investors, there is no denying that we have to invest in the local workforce if we are to succeed in Kenya and Africa as a whole,” he added.
In addition to the issue of labour, American companies have called on African governments to formulate policies that will make it easier to do business, with the idea of a one-stop-shop mooted to reduce bureaucracy, which is a major deterrent to setting up shop in African countries.
“We want free and open capability to invest, and we can each learn from each other’s’ best practices to grow our businesses,” Ireland emphasised.
GE is already in talks with the Kenyan government to boost its investment in infrastructure and energy, and has revealed that in addition to adding another 150MW of electricity to the national grid through a proposed power project, it is interested in setting up a manufacturing plant as part of its plans to invest hundreds of millions of dollars in Kenya.
Represented at the summit were AmCham’s from all over Africa including Kenya, Uganda, South Africa, Ghana and Nigeria, as well as companies such as Chartis, Aon and GE.