Obama Administration Announces Campaign to Encourage Investment in Africa

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Africa open for business

Africa is open for business

AFRICANGLOBE – President Obama sent his acting Commerce Secretary Rebecca Blank to Africa to announce his administration’s new “Doing Business in Africa” campaign, which will feature two-way trade missions and shows, training American development leaders on working in Africa and holding a series of Africa Global Business Summits in the U.S. during 2013.

Many observers have interpreted Blank’s Africa trip—the first to Africa made by a U.S. Commerce Secretary in a decade—of the Obama administration’s commitment to greater engagement in Africa during his second term.

At an event in Johannesburg to launch the campaign, Blank said President Obama believes Africa can be “the world’s next major economic success story.”

“He’s absolutely right. Africa is home to six of the 10 fastest-growing markets in the world,” she said in her remarks. “Economic growth in this region is predicted to be strong–between 5 and 6 percent–in coming years. And–most important–millions of Africans are finding a path from poverty to greater security, opportunity, and prosperity.”

Blank said, “For decades, people around the world have talked about doing business in Africa. But today, it’s real. It’s happening. And Africa is rising as a result.”

Blank reminded an audience of leaders from across the continent that Obama got the ball rolling just months after his inauguration in 2009 when he traveled to Ghana and called for a deepening of the relationship between Africa and the U.S. in government, business, and other sectors.

The Commerce Department’s DBIA initiative outlined five areas of intervention, including:

  • The training of officials at Export Assistance Centers, in the US, as well as commercial service officers around the world on specific African markets and sectors, while offering ongoing information about the new opportunities arising on the continent.
  • Empowering the ‘African Diaspora’ in the US with tools to trade and invest in Africa.
  • Working with organisations such as the Corporate Council on Africa and the Business Council for International Understanding to launch a series of ‘Africa Global Business Summits’ in the US during 2013, at which ambassadors and commercial service officers would provide insight to business on specific African prospects.
  • Partnering with the State International Development Organisation to train American economic development leaders on doing business in Africa.
  • And, organising two-way trade missions and shows for African and American companies and business leaders.

Currently, U.S. trade with Africa accounts for only 2.6 percent of the U.S.’s total trade with the world.

Africa Growing

“The economies of Africa are among the world’s fastest growing, and this economic expansion—partly a result of our long-standing investment in Africa—provides an opportunity to lift millions out of poverty and foster long-term stability,” Obama said in a letter he sent with Blank to be read to African leaders. “Our challenge is to ensure these gains continue and spread, and to enable American companies and the African Diaspora to obtain the support they need to take advantage of these new trade and investment opportunities.”

“Many American entrepreneurs and business leaders are unaware of the tremendous trade and investment prospects in Africa or face challenges establishing business relationships in the region. The DBIA campaign seeks to change this by increasing awareness about key sectors and markets in Africa and opportunities to expand trade activities. The initiative promotes enhanced financing opportunities to bolster American exports and provides trade counseling and advocacy for entrepreneurs who want to tap into these growing and dynamic markets. The strategy also aims to further engage the African Diaspora community living in the United States to improve our commercial and economic ties with Africa.

Earlier this year, Secretary of State Hillary Clinton used a gathering of world leaders in Rio to announce a project that may have enormous implications for the residents of the African continent: The U.S.-Africa Clean Energy Finance Initiative. The U.S. will capitalize the initiative with an initial grant of $20 million to fund clean energy projects in Africa, with an expectation of an investment of hundreds of millions dollars more from other U.S. agencies and the private sector.

“Clean energy is something that we all say we’re for,” Clinton said. “We have given lots of speeches about it, but now is the time for us to act. And we know that as Africa is lifting off economically, with some of the fastest growing economies in the world in the midst of what is still a very precarious global economy, that clean energy will bring new jobs, create new livelihoods, support education, new businesses, healthier and more productive lives, as well as reducing the emissions that contribute to climate change. And we think that is a winning formula.”

Clinton presented sobering statistics about Africa’s inadequate infrastructure, stating that just one in every four African households has access to electricity—on a continent with vast geothermal resources in the East, the world’s largest hydropower resources in the middle, and usable bright sunlight across the continent.

“That is 600 million men, women, and children living without power that can’t turn on the lights, can’t use a machine in a factory,” Clinton said. “Now why does this gap exist? It is not a technological hurdle. We know how to harness that energy and deliver it to the homes and businesses across Africa. It is because investors in this space often see obstacles and risks that stop them from investing in clean energy in Africa. Too few projects even make it past the initial planning stage. So even though all of the pieces are there—energy sources, technology, know-how, high demand—the investments that would bring all of that together have yet to materialize.”

Clinton also provided the crowd with a short U.S. history lesson to put the African dilemma into perspective.

“I want to say a word about my own country, because I think often times people believe that somehow all of this just happened in the United States or other places that have reliable power supplies,” she said. “In my own country, it took government support, starting in the 1930s, to create institutions that would provide exactly the kind of incentives and guarantees to extend electricity into rural areas in the United States that we’re talking about for Africa. We did not finish electrifying the continental United States until, I think, the mid or late 1960s. So it was a 30, 40-year project. But we stayed with it, and we kept fine tuning what was needed—rural electric co-ops and other kinds of incentives and guarantees.”

 

By; Nick Chiles