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The Warsaw Voice » Business » May 28, 2013
Business & Economy
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Polish Businesses Eye Africa
May 28, 2013   
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Polish Prime Minister Donald Tusk’s April visit to Nigeria kicked off the economy ministry’s Go Africa program that aims to encourage Polish companies to expand into African markets.

The Polish delegation included officials from the Economy Ministry and the Polish Information and Foreign Investment Agency (PAIiIZ), in addition to executives from 28 companies from sectors such as defense, maritime, oil and gas, mining, energy and transport. While in Nigeria, the Polish companies were able to gain an insight into doing business in Nigeria as well as learn more about investment incentives and the most promising sectors for expansion.

According to PAIiIZ head S³awomir Majman, construction, energy and defense are particularly promising sectors in Nigeria. Some Polish businesses are also eyeing the Nigerian fuel industry, which is a key driver of economic growth in that country. The first contracts may be concluded soon. “They will not be as large as those secured by Chinese or American companies, but our ambition is to become the most important partner for developing African economies in Central and Eastern Europe,” said Majman.

Nigeria is one of the most developed countries in West Africa. From 2001 to 2010 it was the fourth-fastest growing economy in the world, with average annual GDP growth of 8.9 percent. Nigeria’s economy is based on mining, and oil exports are the main source of national income. An important part of the Nigerian economy is production of liquefied natural gas (LNG). In the next 10-15 years, Africa is expected to become a larger supplier of oil and gas than countries in the Arabian Peninsula.

In addition to Nigeria, the Go Africa program covers Angola, South Africa, Kenya and Mozambique. “The Go Africa program is designed to run for many years,” the Newseria news service quoted Deputy Economy Minister Ilona Antoniszyn-Klik as saying. “We are only beginning to open to new markets; we need to show these to businessmen, and give them a sense of stability by signing business and political-and-economic agreements.”

The planned strengthening of economic ties with African countries will not be easy because, unlike Europe, these countries do not have a unified legal system, so investors need to learn the ropes on each market separately.

Abundant raw materials, rapid economic growth, a developing middle class, and the increasing stability and predictability of these markets are only a few of the reasons why companies from different parts of the world are interested in investment opportunities in Africa.

According to a report by Ma³gorzata Bonikowska and Pawe³ Rabiej from Warsaw-based analytical center Thinktank, Polish companies have promising conditions for expansion into Africa. “Just a few years ago, China stole the show; now companies from different parts of the world are exploring business opportunities on African markets,” says the report, which was produced in association with the Economy Ministry ahead of the Polish government delegation’s trip to Nigeria.

The report says that Polish companies have certain advantages that may allow them to effectively expand into African markets. First, Polish products are of high quality, comparable to that of German or French products, but carry lower price tags. Value for money is an important competitive advantage for Polish companies, the report says. Second, Africa offers promising prospects because it is rich in mineral resources, has substantial energy-sector potential and not enough roads and telecommunications infrastructure. Third, sub-Saharan Africa is a market accessible not only to large but also medium-sized innovative companies. Their success there depends not on the size of the company, but on its ability to adapt to local needs and conditions, something that Polish companies, with experience on the competitive European Union market, are increasingly good at. Fourth, businesses from countries that are relatively new players on the global market tend to be seen positively in Africa because they are not burdened by associations with the colonialism era.

An additional plus for Polish businesses is the friendly attitude of local decision-makers in Africa, some of whom studied in Poland during the communist era. These people speak decent Polish and are well aware of Poland’s recent history.

Poland spends no more than several million zlotys a year on developing economic ties with African countries. But the government plans to increase this to tens of millions. Funds for this purpose would come from sources including the European Union’s new budget for 2014-2020.


Africa: An Opportunity for Europe
The development of Africa is a great opportunity for Europe and it’s time to take advantage of it—that was the conclusion of the Go Global! The World, Europe, Africa: Time for a New Deal panel discussion organized by the CEED Institute think tank during the European Economic Congress in Katowice in May.

The largest economies in the world such as the United States, Russia and China are all courting Africa today, panel participants said. The value of foreign direct investment in Africa this year will be 26 percent greater than FDI in the European Union. It is high time that Central and Eastern Europe put its competitive advantages to use and took part in the race, panel participants said.

Business tycoon Jan Kulczyk, founder of the CEED Institute, said, “It’s not longer the case that Africa needs Europe; today Europe needs Africa. Unfortunately, we have overlooked the rise of Asia, the growth of South America, and we are about to miss the development of Africa as well. Europe is unable to develop further on its own. We have human, financial and industrial capital, but we need to find buyers for it.”

According to former German President Horst Köhler, Africa has the potential to become a new driver of global growth, chiefly thanks to its natural resources, human capital and growing demand. “According to the World Economic Outlook, sub-Saharan Africa will muster 5.6-6 percent GDP growth in 2014, while the global average is projected at 4 percent,” Köhler said.
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