Not since the Berlin Conference of 1884 that settled the manner in which European colonists carved up and looted African wealth has trade with Africa been so amplified.
Recently, President Barack Obama met with 50 African heads of state to discuss bilateral trade with African nations. Upon the conclusion of the three-day summit, Obama announced that U.S. corporations will commit a total of $14 billion primarily in major infrastructure projects like construction, financial services, ICT and energy sectors across the continent of Africa.
In other words, the demise of desolate and moribund Africa has been greatly exaggerated. However, the commitment is not up to snuff as The Wall Street Journal recently reported that the Chinese are expecting to invest about a total of $160 billion in private and Foreign Direct Investment in Africa for fiscal 2014 or 50 percent more than the U.S. and European nations plan to invest for the same period.
For the past two decades, while the West ignored Africa, the Chinese have vigorously and diligently invested heavily in major African projects albeit with a sleight of hand toward resource and commodities exploitation. During the same period, though, major U.S. private equity and venture capital fund managers have unceremoniously risked capital in an asset class that would be considered alternative investments in very minuscule measures as a percentage of total assets under management and have been rewarded quite handsomely.
Unlike the Berlin Conference, where the European colonists did not even bother to extend invitations to Africans for the Balkanization of their motherland or economic imperialism, today, young and erudite African professionals in the private sectors, having graduated from elite business schools in the West and cut their teeth with stints at major investment houses on Wall Street, are actually leading the conversation on the future of African investments.
The young professionals understand the rules of the game and the arcane language of the financial markets and are fully aware of the challenges of delivering positive and measurable returns based on established international metrics. Africa rising.
The majority of African leaders are very suspicious of this sudden interest in Africa's economy and some think that it is fleeting. It is highly unlikely that current meteoric rates of return on African investments will be sustainable over long terms and periods of correction will be expected.
Besides, the private sector can only go so far in light of existing poor infrastructure and political governance, the youthful population and a growing middle class notwithstanding.
Another major concern is that the success of the foreign private equity funds has almost entirely relied on low-hanging fruits by taking over poorly run but established major government and state operated corporations and family businesses.
It does not appear that there are enough impact investments and seed money to harvest the entrepreneurial spirits and aspirations of the youth. Low literacy rates and a dysfunctional work force also will severely impact the success of the emerging economy.
These are perennial issues that have been identified by major researchers including McKinsey & Company Global Institute and need urgent attention in order to attain long term strategic goals.
Despite a slow start, the U.S. investors can demonstrate a genuine bilateral business relationship and build on good old American values as a trusted partner.
Iffy Okechukwu is the president of Opus Business Dynamics, an international business consulting firm based in Oakland.