This article was originally published by American Ambassadors Live!, produced by the Council of American Ambassadors, on November 3, 2021. The Foreign Policy Research Institute republishes it with the organization and author’s permission. Introduction On the same day President Joseph Biden laid out his vision for global engagement at the U.S. State Department, he also extended greetings to the 34th Summit of the African Union (AU). That Africa popped up on the President’s radar screen so early in his administration is promising. In his remarks, the President sounded the right notes. He began by reinforcing the U.S. commitment to be Africa’s partner, underscoring the common fates of America and Africa and the need for Africa and America to “work together to advance a shared vision of a better future.” Among the details of that vision of a better future are “investing in democratic institutions and promoting human rights” and “ investing more in global health and defeating COVID.” It also means, he indicated, that the U.S. is standing ready to “engage in sustained diplomacy with the African Union to address conflicts across the continent.” That’s good news for Africa. On the other side, Africa is a great place to start as the Biden Administration works to reestablish America’s leadership position in the world. That’s because Africa is where the stakes are clearest and where America has substantial economic, geopolitical and military interests, as well as substantial competitive advantages. To appreciate what I mean requires seeing Africa less as a “problem” and more as an opportunity. The common narrative about Africa—though generally not expressed as crassly as it was by the 45th U.S. President—is substantively not much different than he characterized it. Whether it’s the evening news or policy forums, when the subject of Africa is raised, more often than not, the conversation is about disease, disaster or destruction. Does Africa have its problems? Yes, but what continent or country doesn’t. Africa, like most places, is more than the sum of its problems. There are 16 countries in Africa, with a combined population of close to a billion people, that have free-market economies and free elections. For the record, those 16 countries are Cape Verde, Ghana, Liberia, Senegal, Mali, Nigeria, Namibia, South Africa, Botswana, Benin, Malawi, Mozambique, Zambia, Mauritius, Kenya and Tanzania. The most profound evidence that those 16 countries are on the right track is that they are home to nearly 50 democratically retired heads of state and government. For the naysayers who may harp that democracy is “on life support” in Africa, the reality is that, for the overwhelming majority of Africans, democracy is alive and well. The same can be said for the economic front, as well. Since I served as President William Clinton’s envoy to Tanzania, the 16 countries I referenced earlier have had enviable growth rates, despite interruptions to that growth coming from events that emanated from outside the continent, viz. 9/11, the 2008 banking debacle, and COVID-19. Were it not for these catastrophic events, who knows what the growth rates of countries such as Tanzania, Ghana, South Africa or Nigeria would be. Africa has countries that are stable, with citizens who are productive. How America engages in Africa has the potential to impact its economic interests for years to come. As Africa increasingly expands its place in the global economy, the stakes relative to U.S. geopolitical interests will only increase. The time to do a reboot of America’s Africa policy is now, while the U.S. has the political capital to make a difference for Africa and itself. U.S. Economic Interests and Africa Africa’s “sweet 16” democracies, with close to a billion people, represent an impressive market worth tapping in a variety of ways. Despite the market disruptions over the past two decades, African cities such as Dar es Salaam, Johannesburg and Dakar are growing at a phenomenal rate. More growth requires more capital. There is certainly room for America to find a place in this space. The new U.S. International Development Finance Corporation is a good start, with a budget of $58.5 billion per year. Africa needs to invest somewhere in the neighborhood of $80 billion a year on infrastructure for the foreseeable future. The Biden Administration and Congress would do well to raise the ante. Other nations—including China, Japan, Germany, South Korea and Australia—are stepping up to fill the demand. As Africa’s economies and middle class continue to grow, there is a tremendous market for American consumer goods. Consumer and business spending in Africa is expected to top $6.6 trillion by 2030, up from $4 trillion in 2015. Again, not only China, but also nations in every other region of the world, are looking to fill the continent’s need for consumer goods. Africa is more than a potential American consumer market; it has the potential to be a manufacturing center to meet American consumer needs, as well. The issue of supply chains has been featured prominently in the news, particularly as tensions between the U.S. and China have escalated. Those tensions aside, now that the Chinese manufacturing sector has matured and costs are rising, Africa is the next best place to satisfy the supply-chain needs of the manufacturing sector. It has a wealth of young people and poverty, which translates into an available and willing workforce. Africa has demonstrated that it has the potential to become the world’s next factory. Mauritius, one of the early entrants in this space, created a manufacturing zone that has supplied products for the fashion industry in Europe and America. Tanzania is a recent entrant into this space. There’s a new manufacturing concern in Tanzania that’s producing 5,000 units per day. (That’s just one factory.) South Africa is the manufacturing venue of choice for Mercedes’ righthand-drive vehicles. So the potential is there. But U.S. companies have not come close to scratching the surface in terms of the opportunities. During the Clinton Administration, the U.S. passed the African Growth and Opportunity Act (AGOA), which provided trade preference for commodities and goods from Africa. While every U.S. Presidential Administration since then has extended the AGOA, not much has happened to provide other incentives (or push) for U.S. companies to leverage this advantage. As a result, China has displaced the U.S. as Africa’s number-one trading partner. There is too much money on the table for America not to become more competitive in Africa. Maybe better results can be realized by tweaking AGOA. Groups like the Corporate Council on Africa could provide valuable insights as to how to do this. Perhaps nothing more is required than for President Biden to provide the necessary leadership with a few strategically scheduled trade missions, along with prodding the Commerce Department and the U.S. Trade Representative to make Africa a higher priority. Whatever it takes for America to get competitive in the African marketplace, now is the time to get busy. Beyond the consumer market and manufacturing, there are also opportunities in the energy and mining sectors. Here again, the Chinese are ahead of others in the game. Whether it’s selling solar as an energy solution or closing commodity deals, the Chinese are way ahead of the U.S. Even in mining exploration, which I know something about, the U.S. is being outflanked by the Australians and Canadians. The U.S. needs to come up with strategies to incentivize U.S. capital markets to play in this space; this could start with funding and/or partnering with U.S. companies that want and should be a presence on the continent. The U.S. has declared minerals such as graphite to be strategic assets, as these are essential to the greening of the global energy supply, whether for battery technology or solar technology. Today the largest exporter of graphite is China. The world’s largest high-quality reserves are in African countries, particularly Tanzania.
Authors
- Published in
- United States of America
