Challenges and Opportunities
Tom Rush is one of many African-Americans who have made South Africa their home. Like others, he sees abundant opportunities for U.S. companies, as well as some serious challenges.
“Some companies come with the assumption that the country is not that established and developed. Many are surprised when they come here to find that in many areas it is advanced,” says Rush, who opened the AT&T office in Johannesburg in 1993.
“Companies need to do research before they come here to identify what this market has to offer and what they can offer,” adds Rush, who has a Ph.D. in physical chemistry from Stevens Institute of Technology in Hoboken, N.J. He now serves as sales director for Global Data Logistix, a South Africa-based company best known as the producer of Xing software, but he also tries to help U.S. companies get established not just in South Africa but elsewhere in the continent, too.
Monica Stewart, who represents the state of Illinois in South Africa, has a similar mission. “Africa represents new markets, particularly for companies in the U.S. that are facing saturation,” she says. “You have to allow time to build relationships and gain understanding of the local market.”
Illinois companies doing business in South Africa include corporate giants such as Caterpillar, John Deere, McDonald’s and International Trucks, known in the U.S. as Navistar. “We do advocacy, market introduction and other services, particularly for small and medium enterprises that are new to this market,” Stewart says in describing her role.
Less well-known companies that have succeeded in South Africa include Chicago-based Luster Products, the world’s largest Black-owned hair-care manufacturer with exports to 60 countries, according to Stewart. Luster exports ingredients for its product, with final packaging done in South Africa. The company was Stewart’s first client when she opened the Illinois office in South Africa 10 years ago. “They have met with success beyond expectations,” she says.
Johannesburg is the nation’s largest city, but most African-Americans, along with most middle- and upper-class South Africans in the area, live in the suburbs because of worries about personal security. “Crime is a huge concern,” Stewart says.
That concern, along with the lack of good mass transit, forces most stores to close early. Stewart cites inconsistent standards as one of the major issues for businesses in South Africa. Brenda Joyce, founder and chief executive of Dagosa Consultants (Pty) Ltd., a wholesale trader of diamonds and gold, agrees. “It’s like trying to hit a moving target. Laws change, rules change and the culture changes,” says Joyce, who has two master’s degrees and a certificate in gemology. “One of the biggest challenges is the lack of access to capital,” she says.
One reason is that companies owned by African-Americans do not qualify for the government’s Black Economic Empowerment program, which provides incentives for companies based on the level of participation by Black South Africans. Nor can she obtain credit from U.S. or South African banks, in the latter case because her assets are based in the United States, says Joyce, who came to South Africa in 1995. Joyce, who also performs as a cabaret singer, says she obtains credit by borrowing from other companies.
“Many African-Am-ericans struggle here,” says Clara Priester, who came to South Africa as vice president of McDonald’s and who now serves as regional education advising coordinator for the Institute of International Educa-tion. Her husband, R. Courtney Priester, is sales director for Clacour International, a producer of hair-care and beauty products. Clacour used to import its products from the U.S., but now manufactures in South Africa.
R. Courtney Priester served until recently as chairman of the South African chapter of Democrats Abroad. Monica Stewart represented the group at the Democratic National Convention in 2008 as a delegate for Barack Obama. Stewart, along with the Priesters, Joyce and other African-Americans, helped found a ondenominational Christian church known as Our Father’s House, in the early 2000s.
Today, it has a large congregation, primarily consisting of South African university students.