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Business

Managers wake up to business opportunities in Africa

This summer's football World Cup opened the eyes of German companies to possible business opportunities in Africa. Siemens, for one, has announced it will invest hundreds of millions of euros in the continent.

A view of Lagos

Big African cities could mean big business for German firms

As soon as the World Cup trophy was lifted by the Spanish team in Johannesburg, Siemens chief executive Peter Loescher announced that the German company would invest around 200 million euros in Africa over the next two years.

According to Loescher, Africa is the premiere growth market for the Munich-based engineering conglomerate, and he hopes to triple the value of orders in the region to about 3 billion euros by 2012.

Siemens: No stranger to Africa

"We'll invest half of that money in South Africa," said Siemens spokesman Marc Langendorf. "We'll invest in all our main areas of business, such as manufacturing, energy and medical technology." .

With more than 3,000 staff members scattered between Cape Town and Cairo, Siemens is no stranger to Africa. The company set up South Africa's first telegraph line back in 1860, and it built the first hydro power plant there as well as the cable car on Table Mountain in Cape Town.

Luanda skyline

Africans have been positive about German firms setting up shop in their countries

Siemens' current African expansion plan will see its engineers focus on green technology -- particularly in the continent's north.

"Tunisia and Morocco have put aside 10 billion euros for renewable energy projects," Langendorf said. "That applies to wind, hydro and solar energy."

Apart from those countries, Siemens will focus on the strong African economies; namely, South Africa, Ghana, Kenya, Botswana, Mozambique, Angola and Tanzania.

World Cup boost

While the World Cup put Africa back in the minds of the world and boosted its image, the event also revived interest in the continent as a business opportunity.

"There are no doubt a number of managers who've been impressed by South Africa's ability to stage such a big event," said Heiko Schwiderowski, Africa specialist at the German Chambers of Industry and Commerce. "And they're thinking to themselves: If a country can do that, it may be worth setting up a subsidiary there."

World Cup fan

The World Cup opened a business people's eyes to Africa

He added that German companies are, in general, well respected in Africa. The "Made in Germany" label is strong there, although German firms are interested in more than just selling products.

"They are also very keen to export know-how and technology; they are looking for partners in Africa, so that the locals can benefit directly from the investment," Schwiderowski said. "Africans also appreciate the environmental and social-welfare standards that German companies bring to Africa."

So far, it's largely Germany's big corporations that have invested in Africa. Medium-sized businesses are lagging behind, according to Schwiderowski, although they are present in the building and road construction sectors.

Overall demand in Africa for infrastructure solutions is expected to grow significantly in the years ahead – especially in urban centers. Economists expect the number of Africans living in cities to rise from today's figure of about 400 million to 750 million by 2030.

Author: Monika Lohmueller (jam)
Editor: John Blau

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