The potential for business opportunities in Africa is far from being realised by Irish companies according to new research from Barclays Bank Ireland.
The report ‘Trade with Africa’ asked 200 Irish companies about their views on Africa as a place to do business. It found that while respondents were wary of the continent as a business partner, an impressive 91% believe there is opportunity for Irish businesses today and around two thirds (62%) believe this will develop positively over the next decade.
However, only 8% of those businesses surveyed said they planned to take ‘full’ advantage of the opportunities Africa presents with the majority (62%) preferring to take ‘some’ advantage of the opportunities. The remaining 30% believe Ireland will waste its chances.
Perceived corruption remains the biggest single barrier for Irish exporters looking to trade with Africa, followed by poor governance and the current state of the continent’s infrastructure. However, poor infrastructure was also seen as an opportunity by many Irish companies looking to work on projects aimed at improving Africa’s roads, rail and other infrastructure networks. Africa’s growing middle class and Ireland’s global reputation of producing quality goods and services were also cited as key reasons for Irish companies to consider exporting to Africa.
Andrew Hastings, CEO Barclays Bank Ireland, said: “It is clear that current consideration for Africa as a trading partner remains low. This is understandable as, for many exporters, Africa is the final frontier and its vast and diverse nature can make trading with the continent seem simply too much of a challenge.
“However, Africa’s rapidly expanding middle class increasingly need goods and services which cannot be catered for domestically providing a golden opportunity for Irish businesses. This is a truly ‘ground floor’ moment in many African economies and I would encourage Irish companies to explore the potential”.
When asked which industry will provide the biggest opportunity for Irish businesses agriculture was cited as number one, followed by energy & utilities, construction, tourism, food & drink and healthcare & pharmaceuticals. South Africa is seen to be the African nation with the most potential for Irish businesses, with Nigeria and Kenya coming in second and third place respectively. Egypt and Morocco complete the top five.
More than a third (37%) of Irish businesses feel that the government is playing its part in supporting those companies looking to trade with Africa but, the majority said they would encourage the government to do more to boost trade flows.
Finally, when asked more broadly about trading outside the Eurozone, nearly half of those surveyed (48%) said that in light of the economic crisis Ireland should be looking to non-Eurozone countries to build trade partnerships. Of those, 10% said Ireland had no other option but to look outside the Eurozone.