- POSTED: 05 Aug 2014 10:24
US and African political leaders and corporate chiefs will get down to business Tuesday (August 5) as Washington hopes an historic summit will trigger a surge in trade and investment between the two sides.
WASHINGTON: US and African political leaders and corporate chiefs will get down to business Tuesday (August 5) as Washington hopes an historic summit will trigger a surge in trade and investment between the two sides.
The first day of the historic US-Africa Leaders Summit, the largest such meeting ever held in Washington, saw American officials chiding their guests over democratic reform and civil rights. But now President Barack Obama and titans of US commerce and industry will try to convince their counterparts that America is as determined to take part in Africa's growth story as China or Europe.
Monday saw talk of promoting civil rights, dealing with the surging threat of Ebola in West Africa and specific challenges like fighting global warming and trade in protected wildlife. But Tuesday's program confronts the reality that China has brushed all such issues aside to establish itself as Africa's fastest growing partner and that the European Union is quickly fashioning free-trade agreements with regional African blocs.
Secretary of State John Kerry was straightforward on Washington's aims Monday. "I say unabashedly: We want and we will work hard to get more American companies to invest in Africa. We also want more African companies to invest here in the United States, and there's no reason that they shouldn't," he said.
US FALLING BEHIND
China, Europe, Japan and even India have beaten the United States to the punch, holding leaders' summits marked by billions of dollars of deals and, in China's 2012 example, US$20 billion in loans for African governments.
Africans say Americans are bound to old stereotypes of the continent and more risk-averse than their competitors. Sudan-born telecoms tycoon Mo Ibrahim, one of Africa's first billionaires, underscored the challenge.
"I'm actually a little bit amazed that all those Africans I met on the plane ... are coming all the way here to America to tell the very smart, well-informed American business people that 'guys, you know what, there is a good opportunity in Africa'. They should do some homework," he said. "Everywhere in Africa there are Chinese business people, there are Brazilian business people. None of us went to Brazil, or to Asia or to China to tell them, look, come and invest in Africa. They found out themselves and they come and invest."
The program on Tuesday will see the Africans wooed by Obama, Kerry and former president Bill Clinton, as well as scores of chief executives of companies like General Electric, Coca-Cola or Walmart. "The growth is real and now," said GE chief Jeffrey Immelt on Monday. "There is no reason why US business can't catch up."
But even US officials acknowledged that the main infrastructure for US-Africa trade, the 2000 African Growth and Opportunity Act, has done little but smooth the way for oil exports from Africa to the United States, and only represents a fraction of China's trade with the continent.
"It's clear that the Africa of 2014 is not the Africa of 2000," US Trade Representative Michael Froman told a gathering of top African economic officials and business people Monday. "Many of you are moving away from unilateral preferences and entering into agreements with trading partners such as the European Union which provide for reciprocal access. Going forward, we cannot think about AGOA in isolation."
Obama acted Monday to demonstrate the US commitment with the announcement of a new top-level inter-agency steering group, to be led by a senior official of the White House's National Security Council, to coordinate efforts to build trade and investment.
But honing program targets and eliminating bureaucratic barriers will only go so far. The real challenge, analysts and African businessmen say, is getting US business to shed their historical wariness of doing business in the continent and to recognise the growing opportunities, including a huge African middle class.
"They've see the track record we have, of not really being on top of these things," said Charlotte Florance, an Africa expert at the Heritage Foundation.
Stephen Hayes of the Corporate Council on Africa, a US business group, said the private sector meetings on Tuesday could go far to get US business people more interested. "From the standpoint of the US, we need CEOs to be more engaged," he said. "For America to be able to compete for the long term, with China and others, they are going to require partnerships."