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Africa’s Business Steadily Growing With United States

Botswana, a landlocked country in the centre of southern Africa, will host the 15th U.S.-Africa Business Summit in Gaborone from July 11-14 which is highly expected to strengthen further United States economic cooperation with Africa. It will also be a follow-up on some of business pledges taken at the last mid-December African leaders summit in Washington. At that meeting, U.S. President Joe Biden allocated $55 billion for various investment projects across Africa.

Holding the U.S.-Africa leaders’ summit and business forum last December in Washington was an important step in signaling simultaneously Africa’s importance and advancing the U.S.-Africa relationship. The fact that more than 40 African presidents and Heads of State attended the three-day event is a clear signal of the breadth and depth of the existing potentials for the United States and Africa to have a much stronger and more strategic economic partnership. 

Florizelle Liser, CEO of the Corporate Council on Africa, which is a leading reputable American business association, was upbeat on several initiatives for the continent she referred to as ‘future business partner’ and confirmed the summit will host a high-level U.S. government delegation including include senior officials from key agencies responsible for supporting and promoting the U.S.-Africa economic relationships.

Botswana has been a great partner over the years and has been a leader in both political and economic governance, says Florizelle Liser. The United States government and private sector leaders, together with African political and corporate business leaders, have been working consistently over these years to share insights on critical issues and policies influencing the U.S.-Africa economic partnership.

She characterized the summit as a platform to highlight the progress made across sectors of Africa’s economy, including expanding opportunities in agriculture, industry and manufacturing, technology, health, agribusiness, tourism and financial services. United States is keen on training and supporting youth and women entrepreneurs also form serious aspect of the agenda for collaboration. According to her, these are drivers for economic development and growth, and for creating employment benefiting the people of both the United States and Africa.

“We have seen tremendous interest from the private sector – many impressive corporate sponsors. What is most energizing to me is seeing the enthusiasm among both U.S. and African small and medium sized enterprises (SMEs),” Florizelle Liser said. The SMEs constitute more than half of members, and have achieved tremendous growth through engagements and opportunities offered during the past summits.

“We’re seeing more and more American companies looking to expand existing operations into more African markets, while other American companies come to the continent for the first time,” she underlined. As companies are looking for more opportunities, they are increasingly aware of all the legal and regulatory actions African governments have made to enhance business conditions on the ground – though there is still much room for improvement.

Most U.S. enterprises are banking to explore the single continental market, the African Continental Free Trade Agreement (AfCFTA). As a corporate project initiated by the African Union (AU), it has the potential to unite more than 1.3 billion people in a $2.5 trillion economic bloc. It has the potential to generate a range of benefits through supporting trade creation, structural transformation, productive employment and poverty reduction. The AfCFTA opens up more opportunities for both local African and foreign investors from around the world.

Florizelle Liser emphasized the need to seriously work a lot more ambitions in developing the existing potential through initiatives such as the African Growth and Opportunity Act (AGOA), Prosper Africa and the work done under its umbrella by a number of U.S. government agencies like the Development Finance Corporation (DFC), the U.S.-Export-Import Bank, the Departments of State, Commerce, Agriculture and Energy, USAID and USTR to name a few. The goal should be to increase U.S.-Africa trade and investment tenfold.  

Beyond that, there is always scope for the U.S. government to sharpen the tools it uses to promote trade and investment, reducing the time it takes to approve investment and export finance programs, while working with companies to adapt approaches to support evolving opportunities like infrastructure finance. Most importantly, however, U.S. and African companies need more opportunities to connect through the CCA. 

While African governments and companies certainly have an ever-increasing range of potential partners, there is a tremendous advantage in dealing with the United States public and private sector. On the government side, there are major benefits from the more than $9.5 billion in grants (not loans) the Millennium Challenge Corporation (MCC) has made to 24 African countries.  DFC, Eximbank, and USTDA are financing loans and supporting projects in key sectors important to Africa’s development. Simply put, there are broader and longer-term benefits to partnering with the United States government and to seeking expanded presence of American businesses in Africa.

Reports further indicate that Corporate Council on Africa, as the leading U.S. business association focused on connecting business interests between the United States and Africa, has assisted the government in contracting deals close more than 800 two-way trade and investment deals across 47 African countries for a total estimated value of over $18 billion, and the American private sector has closed investment deals in the continent valued at $8.6 billion since 2021.

Secretary-General of the African Continental Free Trade Area Secretariat, Wamkele Mene, advised: “The next wave of investment in African markets must focus on productive sectors of Africa’s economy in order to drive the continent’s industrial development in the decades to come.”

At the previous events, Mene highlighted the significant progress that has been made in advancing the AfCFTA – with 40 countries that have now ratified the agreement, Phase 1 covering trade in goods and services concluded, and 86% of the rules of origin completed. He noted that “AfCFTA has unlocked value chains for – especially US investors – in key sectors such as pharmaceuticals, automobiles, agro-processing, and financial technology.”

In some previous presentations at the business gathering, it was explicitly noted that more African countries need to sign on to the Paris Agreement to tackle climate change as it is important that all countries work together to address global climate change. Other United States officials acknowledged energy poverty in Africa and noted that improving energy access in Africa is paramount to the U.S. government as it continues to invest in electricity systems in Africa through initiatives like Power Africa.

Noticeably, United States officials and the White House administration and other structured NGOs have emphasized the significance of Africa’s voices, pushed specifically for skilled African-Americans to handle various aspects of bilateral challenges and called for expanding economic tentacles into Africa.

On the other hand, African leaders have built strong relationships with their diaspora over the years, especially with people who are successful in sports, education, business, science, technology, engineering and other important fields that the continent needs in order to fully build its potential linkages and meet development priorities. These people help connect the United States and Africa by using a lot of different sectors to their advantage.

Beyond engagement with Biden administration, African leaders express the vision, dynamism and humility to engage with their diaspora. They are excelling in sports, academia, business, science, technology, engineering and all those other sectors that the continent needs to beef up to optimize its potential and meet development priorities. In addition, it is in Africa’s high interest to embrace them within the context of their development needs.

As explicitly reiterated at the mid-December African leaders gathering, the overarching message was to focus on deepening and expanding the long-term U.S.-Africa partnership and advancing shared priorities, amplifying African voices to collaboratively meet this new emerging geopolitical era’s defining challenges.

The African Union (AU) spearheads Africa’s development and integration in close collaboration with the individual countries on the continent, with the Regional Economic Communities and African citizens. With its vision to accelerate progress towards an integrated Africa, it works closely with United States. The AU has its representative office facilitating and coordinating activities and business interest in Washington. The White House and the Biden-Harris administration have been prioritizing comprehensive multifaceted relationships with various countries across Africa.

Source: Modern Diplomacy