The explosion in Chinese involvement with Africa is of particular concern to policy-makers here for strategic reasons. Credit: Kit Gillet/IPS

By Jim Lobe
WASHINGTON, Aug 3 2014 (IPS)

Despite worsening crises in Ukraine, Gaza, and elsewhere in the Middle East, the administration of President Barack Obama hopes next week to focus at least some more positive attention on Africa.

The U.S.-Africa Leadership Summit, which will bring presidents, prime ministers, and other top officials of some 50 African nations here, is designed to demonstrate Washington’s continued interest in the continent, particularly in matters affecting its pocketbook.“This is really a very high-profile photo-op to better position U.S. stakeholders to compete for the continent’s natural resources." -- Emira Woods

In speeches and briefings leading up to the three-day meeting, whose centrepiece will be Tuesday’s U.S.-Africa Business Forum, U.S. officials have highlighted the economic opportunities offered by increased trade and investment in Africa.

“(W)e hope to see increased U.S. investment as one of the Summit’s key outcomes,” said Assistant Secretary of State for African Affairs Linda Thomas-Greenfield at the Atlantic Council Thursday in previewing the Summit whose theme is “Investing in the Next Generation”.

“When we talk about the fact that most of the world’s fastest-growing economies are in sub-Saharan Africa, we’re also seeing a burgeoning middle class of African consumers and an expanding market for U.S. direct investment. This means enormous growth opportunities for American business and new jobs for Africans and Americans,” she told the group.

Washington is being playing economic catch-up in Africa, a region where its military engagement has grown far more quickly, largely due to its efforts to counter the proliferation of radical Islamist groups in North Africa, Somalia, and the Sahel.

As noted by the Council on Foreign Relations recently, the U.S. has gone from a leading trading partner with Africa “to being far surpassed by the European Union and China.”

The EU’s trade over the last decade has more than doubled to more than 200 billion dollars last year, while China’s trade with the continent has mushroomed from some 10 billion dollars in 2000 to more than 170 billion dollars in 2013.

By contrast, U.S.-African bilateral trade has actually declined – from about 100 billion dollars in 2011 to only 60 billion dollars last year.

Most of that trade consisted of imports from Africa – mainly oil and other natural resources — while exports to the continent have largely stagnated at around 20 billion dollars annually over the past five years, despite the rapid growth of the continent’s consumer market extolled by Thomas-Greenfield and featured in a front-page analysis in the New York Times earlier this month entitled “Africans Open Fuller Wallets to the Future.”

The explosion in Chinese involvement with Africa is of particular concern to policy-makers here for strategic reasons, although they routinely go to great lengths to insist that they welcome Beijing’s commitment to promoting development in the region.

“President Obama has made clear that we welcome other nations being invested in Africa infrastructure, and, frankly, China can play a constructive role in areas like developing African infrastructure,” Benjamin Rhodes, Obama’s deputy national security adviser, told reporters earlier this week.

At the same time, Obama himself offered words of warning appeared designed to resonate in some African nations that have witnessed recent protests over Chinese labour practices.

“(M)y advice to African leaders is to make sure that if, in fact, China is putting in roads and bridges, number one, that they’re hiring African workers; number two, that the roads don’t just lead from the mine, to the port, to Shanghai,” he told The Economist magazine.

All but a handful of the region’s heads of state have been invited, and most, including the presidents of the region’s two economic powerhouses, South Africa and Nigeria, are expected to attend.

Omitted were Zimbabwean President Robert Mugabe, the subject of U.S. diplomatic sanctions, Sudanese President Omar Al-Bashir, who has been indicted for crimes against humanity by the International Criminal Court (ICC), as well as the leaders of the Central African Republic (CAR), Eritrea, and the Western Sahara, which, despite its membership in the African Union (AU) is occupied by Morocco, a close U.S. ally.

Despite his indictment by the ICC, Kenyan President Uhuru Kenyatta was included, in part because Nairobi is seen as a “key regional partner” of Washington’s, according to Rhodes.

Sierra Leone President Ernest Bai Koroma and Liberian President Ellen Sirleaf Johnson, the region’s only female head of state and a long-standing Washington favourite, will reportedly be staying home in order to deal with the Ebola outbreak which has killed more than 700 people in recent weeks and which U.S. officials hope will not overshadow the “good news” of African economic growth and opportunity that the Summit will spotlight.

Given his African roots, Obama’s 2008 election spurred hopes that he would give the region unprecedented attention.

During his first term, however, he spent less than one day there – in Ghana – and offered no major new initiatives, although he maintained multi-billion-dollar funding levels for – and eased restrictions on — George W. Bush’s highly popular President’s Emergency Plan for AIDS Relief (PEPFAR). He also played a key role in securing independence for South Sudan and supporting UN and AU peacekeeping efforts across the region, especially in Somalia.

Last summer, he travelled to Senegal, South Africa and Tanzania where he unveiled his “Power Africa” programme – an initiative designed to increase access to electricity to some 20 million households and businesses in six countries by leveraging some 14 billion dollars in private investment from seven billion dollars in federal aid and guarantees.

Congress has yet to authorise the programme, and officials hope next week’s Summit will boost its prospects, as well as those for the renewal of the African Growth and Opportunity Act (AGOA), a trade initiative launched under Bill Clinton that provides duty-free access for some 6,000 products from sub-Saharan Africa. It is due to expire next year.

In addition to the Business Forum, Obama will participate with the other leaders on panels at the State Department Wednesday covering investment, “peace and regional stability” and “governing for the next generation.”

The Summit will also include an all-day conference at the National Academy of Science Monday for civil-society representatives, an event that was added to the agenda in response to criticism from human-rights, development, and anti-poverty activists here who complain that the Summit is too heavily weighted toward business interests.

“There’s no doubt that this is a continent that is rising in economic terms,” said Emira Woods, an Africa specialist at the Institute for Policy Studies here. “But it’s also rising in terms of inequality and environmental damage, and these aren’t on the main agenda.

“This is really a very high-profile photo-op to better position U.S. stakeholders to compete for the continent’s natural resources, particularly in oil, gas, mining, and biofuels, without regard to the basic human needs of its people at a moment when they lack even the basics of a health-care infrastructure that can effectively halt the spread of the Ebola virus,” she told IPS.

Jim Lobe’s blog on U.S. foreign policy can be read at Lobelog.com.

Edited by: Kitty Stapp

The writer can be reached at ipsnoram@ips.org

Textiles are one of the key sectors to benefit from the African Growth and Opportunity Act (AGOA). Credit: Kristin Palitza/IPS

By Ramy Srour
WASHINGTON, Oct 1 2013 (IPS)

With a key U.S.-Africa trade agreement up for renewal in 2015, advocates on all sides of the issue say current policies are rife with shortcomings that leave many African businesses out in the cold.

Since its enactment in 2000, the African Growth and Opportunity Act (AGOA) has sought to create trade opportunities for small- and medium-sized African businesses by helping them export their products to the U.S. market.“The greater challenge is to get those key commodities such as sugar and cocoa products to access the U.S. market.” -- Kimberly Elliott of the Centre for Global Development

But policymakers and activists alike are currently increasing focus on AGOA’s failures at empowering Africa’s poorer communities, and whether the act can be tweaked by 2015.

“AGOA has been successful, but only within its limited parametres,” Kimberly Elliott, a senior fellow and expert on trade policy and globalisation at the Centre for Global Development (CGD), a think tank here, told IPS. “The bill has been relatively effective in removing U.S. barriers to African trade, but it hasn’t addressed the fundamental competitiveness issue in Africa.”

And while U.S. exports to Africa have tripled over the last decade, “only as little as 1.3 million jobs have been created on the African continent since the enactment of AGOA,” Ambassador Michael Froman, the U.S. trade representative, recently warned.

According to the U.S. Department of State, “African exports under AGOA have more than quadrupled since the programme’s inception. In 2012, AGOA-eligible countries exported nearly 35 billion dollars in products to the United States duty free under AGOA.”

Limited reach

One of the obstacles to a truly successful outcome for AGOA has been its focus on only some sectors of the economy – including oil exports – to the detriment of those sectors with a more immediate impact on poorer segments of society. That includes the agricultural sector, the single most important for African communities.

“Outside of clothing and other few sectors, U.S. tariffs were already quite low prior to AGOA,” Elliott says. “The greater challenge is to get those key commodities such as sugar and cocoa products to access the U.S. market.”

So far, agricultural products have been excluded from the AGOA framework because of U.S. domestic regulations. This seems to be the biggest bump on AGOA’s road to decreasing poverty in Africa.

“There aren’t that many sectors benefiting from AGOA, apart from textiles,” Zenia Lewis, an analyst on economic development in Africa at the Brookings Institution, a Washington think tank, told IPS. “And unfortunately, the sector that has reaped most of the benefits has been the oil industry.”

According to recent estimates, oil exports cover nearly 90 percent of goods leaving African shores.

At the same time, AGOA has managed to open the U.S. market to the growing African textile industry. Many are today touting as a key AGOA success story the recent boom in Kenyan textile exports to the United States, to companies such as Victoria’s Secret and Macy’s.

According to the most recent estimates, Kenya was the United States’ 103^rd-largest supplier in 2011, with a total of 382 million dollars’ worth of imported goods, a nearly 23 percent percent increase from 2010.

“So far,” CGD’s Elliott says, “this has been AGOA’s best result when it comes to the poorer segments of African producers.”

Sheri Berenbach, president of the U.S. African Development Foundation (USADF), a federal agency, told IPS, “It is important to recognise that one of the most important constituencies of AGOA are the small local and marginalised communities. USADF has been very supportive of AGOA and trade, because a quarter of the producers that we support are small local groups that are now deeply involved with exports to the United States.”

USADF offers development grants to small African businesses seeking to access the U.S. market. Berenbach says such opportunities can have a direct impact on poverty. “Most of the work in Africa is about dealing with the weakest part of the African economy, the impoverished communities,” she says.

Deprivation

As the bill is set to expire, a broad cross-section of interests are looking to 2015 and providing recommendations on how to improve AGOA. They suggest that the bill’s ineffectiveness to date may not be entirely a result of hidden trade barriers.

“AGOA can’t reach those many African communities that aren’t involved in the production process, simply because of domestic restrictions and a lack of adequate infrastructure,” Mwangi S. Kimenyi, the director of the Africa Growth Initiative at the Brookings Institution here, told IPS.

A recent poll by Afrobarometer, an independent research organisation, finds that almost half of Africans still perceive themselves as being poor. Based on polls conducted in 34 countries, the survey shows that at least 20 percent of Africans still feel deprivation with respect to their most basic needs such as food, water and medicines.

One way to do address this, some suggest, would be to include a provision in the next version of AGOA that would provide assistance to small-scale African traders to build their skills at dealing with international trade concerns. USADF’s Berenbach calls this a “trade capacity-building”, or TCB, component.

“Including a strong TCB component would enable even the smaller producers to be more productive and trade effectively, so that we can really use trade to achieve development,” she says.

At the same time, Brookings’s Kimenyi notes that many see AGOA as doing very little for U.S. companies seeking to invest in Africa. Many corporate interests will thus be looking to the debate leading up to the 2015 renewal as an opportunity to change this aspect of the trade agreement.