American business blind to continent’s advantagesComment on this story
Washington aims to wake up US business to the opportunities in Africa with the landmark US-Africa Leaders Summit this week, as China and Europe lead the way on the fastest-growing continent.
As many as four dozen African leaders, and hundreds of businessmen with them, will for their part be looking to see if US investors and traders can move beyond old stereotypes of a continent mired in conflict and corruption and recognise its huge potential.
It will be the first time the US has hosted a gathering of African heads of state, and it follows similar efforts by China, Europe and Japan, all eyeing the continent’s natural wealth and a market of about 350 million middle-class Africans.
“They aren’t looking for handouts, but they want US companies to come and get involved,” said Amadou Sy, a Senegalese expert at the Brookings Institution in Washington. “The goal is to say the US has a strategy toward Africa.”
Charlotte Florance of the Heritage Foundation acknowledged the US was late in the game. Even so, “the pie is certainly growing, and I think there is still plenty of space for US investors and exporters,” she added.
US President Barack Obama, who has taken more than five years in office before hosting the summit, clearly wants US businesses to recognise that Africa is beginning to take off.
“I think America can be central in moving Africa into the next stage of growth and integrating it into the world economy in a way in which it’s benefiting the people of Africa and it’s not just a source of natural resources,” he told The Economist.
Top US business chiefs, including the heads of Coca-Cola, IBM and General Electric, will take part in key sessions with the visitors.
The question, though, is whether African leaders and businessmen will see American businesses as truly interested in more than Africa’s oil and minerals, which have heavily dominated economic relations.
They also need to see if Washington will compete with China’s cold mercantile approach, and the more aggressive wooing by European nations with long-standing ties to the continent.
But Washington is still moving too slowly, say critics, and US businesses, except for the very largest companies, remain under-informed and too hesitant to mount a powerful challenge. “We’re behind companies from China and elsewhere. We need to play catch-up here,” former diplomat Witney Schneidman, a fellow at the Brookings Institution, said.
Schneidman said that the big problem for American businesses was that they did not know Africa, what was happening politically, what the business environment was, who could be the local partners.
“Most Americans cannot answer those questions. In Europe, they can answer those questions. Asia, they can pretty much answer those questions,” she said.
The centrepiece of US efforts is the 14-year-old African Growth and Opportunity Act (Agoa), a preferential trade instrument that supports exports from 39 sub-Saharan African countries.
But even the US trade representative, the top foreign trade official, says the act has not achieved much outside boosting oil exports from a handful of countries. Moreover, it must be renewed every five years, and Africans complain it holds them to near impossible standards of governance.
The summit will include a full day of discussions on Agoa today. But critics say Agoa needs expanding or replacement with something more like the free trade pacts the EU is striking with African regions. – Sapa-AFP