US-Africa summit: Washington plays catch-up

File photo: Toru Hanai

File photo: Toru Hanai

Published Aug 3, 2014

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Washington - 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 steal a march on the world's 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 ever the United States has hosted a gathering of African heads of state, and it follows similar efforts by China, Europe and Japan - all eyeing Africa's natural wealth and a market of some 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 United States 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.

President Barack Obama, who has taken more than five years in office before hosting 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, which has 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 Europeans with longstanding ties to the continent.

But Washington is still moving too slowly, say critics, and US businesses, except for the very largest companies, remain underinformed and too hesitant to mount a powerful challenge.

“We're behind companies from China and elsewhere. We need to play catch-up here,” said former diplomat Witney Schneidman, a fellow at the Brookings Institution.

The big problem for American business, said Schneidman, is that they don't know Africa - what is happening politically, what is the business environment, 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.

“Our lack of knowledge about the continent is a real inhibition to our ability to move forward.”

The centerpiece of US efforts is the 14-year African Growth and Opportunity Act (AGOA), a preferential trade agreement that supports exports from 39 sub-Saharan countries.

But even the US trade representative, the top foreign trade official, says it 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, on Monday. But critics say AGOA needs expanding or replacement with something more like the free trade pact deals the Europeans are striking with African regions.

“That raises the prospect that here we are extending AGOA, a non-reciprocal program, while the EU is putting a reciprocal program that works to the detriment of US interests,” said Schneidman.

With little political support for a broader AGOA shakeup, the Obama administration has pressed more recent initiatives that businessmen say do hit the right notes: Power Africa and Trade Africa, under the US Agency for International Development, work to bring together businesses, finance and officials on both sides for deals.

Power Africa aims to get US businesses involved in Africa's highest priority for development, expanding electricity generation.

“Obama got the agenda right,” said Stephen Hayes, president of the Corporate Council on Africa, a Washington business grouping.

“The goals may be modest, but he got the right goals. Power should be one of the highest priorities in African development.”

Florance says that by coming here, Africa's presidents and prime ministers are saying that their door is still open to Americans, whatever the push from China and Europe.

“African governments... want options now,” she said. - Sapa-AFP

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