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Entrepreneurs urged to look to the East

CARTOON
By | April 16th 2011

By Macharia Kamau

Local investors have been urged to reach out to Asian firms because they offer better opportunities for growth and knowledge transfer, given the immense interest they have shown in the continent.

Experts from audit firm Ernest & Young noted that a significant number of Asian firms have in set up operations in African countries, including Kenya, the recent past — saying this should be a pointer to local entrepreneurs as to who they should partner with.

Smaller number

In contrast, a much smaller number of West European and American firms have expressed interest to set up in Africa.

"Power is slowly shifting from West to East and local entrepreneurs should seize the opportunity to partner with Indian and Chinese firms that have shown interest in investing on the continent," said Zemedeneh Negat, Ernest & Young country managing partner — Ethiopia.

"Recent research shows that only 14 per cent of the American Fortune 500 have operations in Africa... the US is not investing in Africa but Asia and Middle East are," said Negatu.

Infrastructure, energy, ICT and tourism are among the sectors that offer opportunities to both local and foreign investors, and have a high return on investment.

"The average return on invest in Africa is 29 per cent, which is way above 10 per cent that investors to Western Europe or North America," he said.

East African chapter

Negatu spoke on Thursday when Ernest & Young launched the East African chapter of its Entrepreneur of the Year award.

The audit firm has been running the business award for entrepreneurs for the last 24 years, in 50 countries.

Up and running

Currently, there such a programmes has been up and running in Southern Africa, and plans are underway to launch a western African one.

"The award programme provides opportunity for entrepreneurs to come together and share insights, develop networks, and promote best entrepreneurial practices in Africa," said Gitahi Gachahi, the chief executive Ernst & Young East Africa.

Participation open to enterprises East African community member states and Ethiopia with turnover of upwards of Sh5 million.

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