The couple have staked an early claim in what they hope could be a new South African gold rush. While much of the Fortune 500 take baby steps, many black investors and businesses are already calculating how to make a buck and a difference. Some are major corporations, but most are small entrepreneurs. At a recent event in Johannesburg, U.S. Commerce Secretary Ronald Brown says he was tapped on the shoulder “every 30 seconds” by an African-American setting up shop. Last year nearly 300 black Americans looking to start their own firms immigrated to South Africa, according to the African National Congress; that’s expected to triple by 1995. They range from venture capitalists to locksmiths. Some have sweated the details to the last decimal; others, motivated more by political excitement than the bottom line, have chosen to overlook some formidable roadblocks.
It’s easy to understand the euphoria. South Africa’s economy is recovering after years of sanctions. There is a developed infrastructure, financial sector and telephone system. A growing black middle class yearns for new products and the service sector needs help. The ANC is beckoning black Americans to fill the gap. Skills and education are in great demand. “For the first time, here is a place where it is an advantage to be a black and American,” says Giles.
For big African-American-owned firms, South Africa represents an untapped market: 45 million consumers. Soft Sheen, the hair-care-products maker, has already built plants there. Sloan Financial, one of the largest black-owned investment-management firms in the United States, is doling out $500 million through its Johannesburg subsidiary. But some of the most ambitious plans come from entrepreneurs like Regional Cook. The 34-year-old from Long Beach, Calif., raised $100 million from American investors to buy up South African businesses. This summer he will move his family to Johannesburg. “I’m like a kid in a candy store,” he says.
Like most newly opened markets, South Africa is becoming a mecca for American consultants. Harold Jackson, who opened a Johannesburg branch of his Atlanta public-relations firm last year with two Afrikaner partners, now represents the country’s largest clothing manufacturer. For other entrepreneurs, grand visions have yet to be translated into a clear business strategy. Lindi Yeni, for instance, is an African dance teacher in Houston who has plans to open a dance studio in South Africa but is vague about how to pay for it.
Without a plan, South Africa’s obstacles can be daunting. Financing is scarce. Business regulations are byzantine. A rebounding economy has its drawbacks: local competitors catch up fast. And the ANC’s embrace may grow cooler if it appears Americans are muscling out Africans. Still, most of the pioneers seem willing to take the risk. No wonder. They’re bound for a boomtown, where, for a change, the only thing that will make them stand out in a crowd is success.
