The present research aims to analyze the investment opportunities and business environments in emerging markets in Africa. It also seeks to examine future prospects of a number of sectors in Africa, including agriculture and food processing, renewable energy, textiles, building materials, and information and communication technology (ICT), and to discuss relevant case studies of Taiwanese investment. The findings of the research are expected to inform investment decision-making for Taiwanese businesses. The research consists of four parts. Part I analyzes the trends and structures of bilateral trade and investment between Taiwan and Africa (see Chapter 2). Part II examines investment opportunities and local business environments in eight countries, including Egypt, Nigeria, Ivory Coast, Ghana, Eswatini, Somaliland, Kenya, and the Democratic Republic of Congo, to provide information for Taiwanese businesses considering investment in Africa (see Chapter 3). Part III explores the experiences and opinions of Taiwanese businesses in agriculture and food processing, renewable energy, textiles, building materials, and ICT sectors that have invested in Africa (see Chapter 4). Based on the research findings and industry inputs, the final section, Part IV, presents the conclusions, SWOT analysis for Taiwanese businesses investing in Africa, and policy recommendations (see Chapter 5).

The conclusions of the study are as follows: 1) Supported by abundant labor and natural resources, the African economy is expected to see a V-shaped recovery after 2021, boasting growth and investment potential; 2) Existing intra-Africa trade agreements could be leveraged to expand domestic market. However with key documents such as the AfCFTA schedule of tariff concessions, market access in services, and rules of origin yet to be published, the effectiveness of such regional agreements remains to be determined; 3) Businesses could take advantage of the unilateral preferential tariffs given by Europe and the US to invest in Africa; 4) Investing in African countries that Taiwan has diplomatic ties with offers a greater degree of protection. That said, considering their limited market size, it is more desirable to target neighboring regions or major economies in Europe and the US as final markets, and 5) The government should act as a facilitator for businesses in providing market information as much as possible.

Finally, the study proposes five recommendations for policy makers in Taiwan:

1. Identify specific, actionable goals and priorities for the African market, and facilitate cross-ministry coordination by a higher-level government entity

In formulating its African market strategy, the Taiwan government should first identify specific, actionable goals and priorities, and facilitate cross-ministry coordination by a higher-level government entity, in order to develop a more targeted agenda. Given Africa’s low share in Taiwan’s international trade and investment portfolio, the government should prioritize enhancing bilateral trade and investment relations as the initial goal, with economic and trade diversification, as well as global target distribution as key strategies. To effectively support Taiwanese companies in expending into Africa, it is recommended the government establish a dedicated higher-level unit to formulate and announce an official Africa investment program, in which goals and priorities are clearly defined. The unit should also coordinate with different ministries to set the targets for the initiatives under the program, and review and publish the performance and outcome regularly, so as to systematically strengthen Taiwan-Africa economic and trade ties.

2. Drive investment through trade activities, and promote current measures to enhance Taiwan's export competitiveness

Taiwanese businesses intending to invest in Africa could first explore the market through trade in goods, and continue to optimize their operations after developing a niche. When order volume is sufficient enough to cover the fixed costs of investing in Africa, local production could be considered—a concept termed “trade first,” namely using trade to drive initial investment. As such, to boost trade with Africa, policy makers could step up efforts in promoting current measures for enhancing export competitiveness, such as promoting regulations on duty offsetting or refund for raw materials of export products, providing access to market information and trade finance support, and increasing domestic products visibility. After securing robust bilateral trade ties, measures could be considered to further enable Taiwanese business investment in Africa.

3. Encourage young people to work in Africa and create a talent bank to match workers with relevant opportunities in Africa

Taiwan has a pipeline of highly educated workers and professionals with required language skills and relevant expertise and experience. However, when recruiting Taiwanese managers for their African operation, businesses can only rely on word-of-mouth referrals, as no single, comprehensive job search platform currently exists. Therefore, improving information access and creating a talent bank would help pair interested individuals with relevant opportunities. Efforts should also be made to cultivate language, trade, and management specialists willing to work in Africa. Additionally, it is recommended that the government develop outreach programs, inviting companies with successful track records to share the potential of African markets and the required candidate qualifications, encouraging young workers with relevant language and technical skills to intern or work in Africa.

4. Attract more African students and workers to Taiwan for education or professional training

Employee management has been one of the challenges facing Taiwanese companies investing in Africa, a result of cultural differences. The companies surveyed suggested deploying local talents with local knowledge is a viable solution. Therefore, it is important to attract more African students to Taiwan for education or professional training. Equipped with relevant knowledge and experience in both Africa and Taiwan, they could be a key asset for Taiwanese businesses investing in Africa. To that end, government programs for talent cultivation in Africa would help encourage investment from Taiwan and strengthen bilateral trade and investment relations.

5. Build a supply chain alliance for effective African market entry

The companies surveyed strongly advocated for government efforts to foster a supply chain network when it comes to expanding in Africa, as most Taiwanese businesses in Africa work in silos and can be ill-equipped to cope with international competition. An alliance-based approach that brings together relevant supply chains would be key to successful market entry. As such, in developing investment strategies for the above-mentioned sectors, the government may consider building a mechanism to facilitate sector-wide discussions on industry integration or strategic alliance formation, and gather industry inputs for more targeted efforts.

Chinese：https://web.wtocenter.org.tw/Page/89/388799