Evaluation of joint AID/OPIC investment missions to Africa

Overseas Private Investment Corporation (OPIC). With substantial financial support and inspiration from AFR/ONI, OPIC conducted four missions to Africa over a 20-month period (1/91-9/92). (By comparison, in the 3-year period 1987-90. OPIC and A.I.D. separately conducted only three structured visitation programs to sub-Saharan Africa). More than 100 U.S. firms participated: 37 in the mission to West Africa (Ghana, Ivory Coast, The Gambia, and Senegal); 32 in the mission to East Africa (Kenya, Uganda, and Tanzania); 20 in the mission to Southern Africa (Botswana, Zimbabwe, and Namibia); and 18 in a mission which focused on Zambia. Participating firms ranged from Fortune 500 companies to small, minority-owned businesses. The missions were well organized and generally received high marks from participating U.S. business representatives and A.I.D. field offices, but they were also quite costly. The average direct cost to A.I.D was over $150,000 per mission, or about $50,000 per country visited, accounting for $600,000 of the $622,000 budgeted by A.I.D. for this activity. By comparison, the direct cost of similar trips to non-African countries, such as a trip to Russia, or a trip to the Philippines organized by the U.S.-Philippine Business Committee, is estimated to have been $50,000 to $70,000. Results of the missions are uncertain but encouraging. Committed U.S. investments generated by the missions are estimated at between $5-10 million. Potential U.S. and foreign investment is conservatively estimated at $100-$150 million. Potential sales of U.S. goods and services to Africa are estimated at about $60 million. Selection of representatives to participate in the tours was reasonable, given the difficulties inherent in persuading most U.S. business executives to consider operations in Africa (by contrast, the trip to Russia was oversubscribed). Intangible benefits of the missions have been significant; forging partnerships between the American and African private sectors and enlightening local governments about their attractiveness to foreign investment is an important U.S. objective. A new A.I.D/OPIC memorandum of understanding has been arranged for eight investment/business missions during FY 1993-1994, including four visits to South Africa. The evaluation recommends efforts to reduce the average cost of these missions, which is estimated at $125,000 or more.