IBM Invests in One Part of Africa …

Alan Buxton tipped me off to this recent IBM announcement that the computing and services giant plans to increase its Sub-Saharan African investments "by more than $US120 million over the next two years." But if you read between the lines of the news, it would appear that the investment is destined entirely for South Africa. Clearly, this supports the notion that Thomas Otter and others have defended that Africa is ripe for investment and export potential. But it also supports my belief that Africa as a whole -- at least 90+ percent of it except South Africa and maybe a smattering of other countries -- is not ready for prime sourcing time. In ten years, maybe, but certainly not today, with the exception of South Africa, which continues to draw investment interest from certain segments of Western industry (e.g., automotive, high tech, etc.) South Africa, however, is not without its own set of challenges, especially in the manufacturing world. According to a recent Reuters wire dispatch, a "shortage of skilled labour remained the most serious constraint on manufacturing activity in South Africa, with 43 percent of producers surveyed, singling it out ... Other restrictions included a shortage of raw materials and higher short-term interest rates."

Jason Busch

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