Analysis of African Iron and Steel Market for Wuhan Iron and Steel Corporation (WISCO)’s Possible Entry: Preliminary Screening and Final Selection Statistical Scoring Model

Abstract

This paper described the second part of my PhD research project where African Iron and Steel Market was investigated to support the decision of the entry of Wuhan Iron and Steel Corporation (WISCO) into African Market. The data used are the same as previous study, observations of macroeconomic variables, such as GDP per capita, the index of consumer prices, import iron, the real effective exchange rate, the number of urban population, imports and exports total made on 19 African countries for a period that spans from 2008 to 2012. The countries concerned are: Algeria, Burkina Faso, Ivory Coast, Egypt, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Senegal, Seychelles, South Africa, Tanzania, Togo, Tunisia, and Zambia. The empirical study in this paper is divided into two parts: the first part is preliminary screening and the second part is the final selection statistical scoring model. In the first part, the preliminary screening was made by ranking the panel data by political stability variable as it was the main decision criteria of WISCO’s international market selection into the African Iron and Steel Market. We sorted our 19 Africa countries for our study by political stability and absence of violence/terrorism percentile value 2013 from the largest to smallest and selected the first 10th rank. The 10 countries that were selected to the next step of our study from our preliminary screening were: Mauritius, Seychelles, Zambia, South Africa, Senegal, Tanzania, Malawi, Mozambique, Togo and Morocco. In the second part of the empirical findings, we analyzed African Iron and Steel Market following the steps of our final selection statistical inverse coefficient of variation scoring model. We started by analyzing statistical inverse coefficient of variation of every variable in the demand side, in supply side, and then, we analyzed the final score made by every country and suggested a final selection. Our analysis of the final score concluded that the five countries that would be suggested to Wuhan Iron and Steel Corporation (WISCO) were: first, Togo with a final score of 70.20, second, Tanzania with a final score of 18.63, third, Morocco with a final score of 15.58, fourth, Senegal with a final score of 14.57, and fifth, Mozambique with a final score of 13.68. WISCO then can choose from these five suggested countries to enter into African Market.