The rapid economic growth rates being experienced across the continent along with burgeoning population growth and increasing urbanisation were part of aspects luring US firms.
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“Economic growth in sub-Saharan Africa has exceeded five per cent a year for more than a decade now giving the continent a 4.1 per cent share of global gross domestic product (GDP), up from 3.4 per cent in 2000,” said Standard Bank in a statement.
The bank adds that by 2050 one in four of the world’s population will reside in Africa with at least 60 per cent of the continent’s people living in urban centres.
Sim Tshabalala, chief executive of the [DATA SBK:Standard Bank Group Limited] urged US firms intending to invest into the region to consider partnerships.
“Trade with African economies and investment in Africa offer big rewards but it requires sound local knowledge, strong local partnerships, and a long term view,” noted Tshabalala.
“In that sense the US plan to revitalise its commercial and trade links with Africa couldn’t come at a more opportune time.”
President Barack Obama’s Power Africa Initiative is currently being pitched as the flagship for US’s renewed interest in the region.
Launched last year, the Power Africa Initiative aims to double access to power in six partner countries in sub-Saharan Africa: Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania.
The US government has committed more than seven billion US dollars in financial support and loan guarantees to the project over the next five years.
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That commitment has been doubled by the almost 30 private sector partners who have pledged 14.7 billion US dollars in project finance through direct loans, guarantee facilities, and equity investments for Power Africa.
Tshabalala added that Africa was on its way out from being donor dependent.
“Africa has come a very long way from its era of aid-dependence. The rapidly emerging middle class in Africa is driving large-scale diversification of Africa’s economies which offers immense opportunities for companies willing to invest.”
“While there is still a lot to be done the overall direction that Africa is moving in is overwhelmingly positive,” said Tshabalala.
He noted that US companies can do very well in Africa provided they put in the effort to understand the continent’s markets in detail, rather than looking at the continent as a single, homogenous entity.