Africa: Land of Opportunity
As we look towards the future, it is clear that Africa is more important than ever to the security and prosperity of the international community and to the United States in particular,’ said President Obama during the unveiling of his new strategy for Africa.
According to an African Attractiveness survey by Ernst and Young, foreign direct investment projects grew by 27% in 2011 pushing Africa’s share of the world’s investment to almost a quarter, its highest so far. FDI inflows into Africa is now about $180bn and this is said to reach $150bn by 2015 with significant inflows into manufacturing, infrastructure-related and service sectors.
The new Strategy focuses on Africa’s economic potential and the President’s plans to work with Congress to develop preferential trade agreements with African countries while supporting the fight against al-Qaeda and its cohorts in Africa.
The Strategy aims to reach out to entrepreneurs through exchange programmes and will try and match US and Africa companies for business opportunities. This will encourage the US and Africans to do business together and would provide an opportunity to help revive the flagging US economy.
This new focus on Africa comes as China’s presence in Africa continues to grow through investment and trade. China is now Africa’s largest trading partner surpassing the US and traditional European partners. Trade ties between Africa and China exploded since 2000 leaping from $10bn to over $100bn.
Hilary Clinton, the US Secretary of State said at the Africa Growth and Opportunity Act (APGOA) forum in Washington that Africa was the ‘land of opportunity’. I want all of my fellow American citizens, particularly our business community, to hear this: Africa offers the highest rate of return on FDI of any developing region in the world’.
The Strategy for Africa is based on the premise that:
- Africa is a region of growing opportunity and promise for both Africa and America, their peoples and economies;
- Africa can be the world’s next major economic success story;
- Africa’s economies are among the fastest growing in the world, with technological change sweeping across Africa with tremendous opportunities in banking, medicine, politics and business; and
- Africa’s burgeoning youth population is changing economies and political systems in profound ways.
According to the Strategy, addressing the opportunities and challenges in Africa requires a comprehensive US policy that is proactive, forward-looking and that balances long-term interests with near-term imperatives.
The Strategy aims to achieve a balance of many initiatives on Africa that have been launched since Obama took office and would prioritise two key strands critical to the future of Africa: strengthening democratic institutions; and boosting broad-based economic growth through trade and investment.
Last month Obama announced a $3bn plan to boost food security and farm productivity in Africa. The scheme is designed to lift 50 million people, including in Africa out of poverty by linking up governments, civil society groups with the private sector.
Obama maintained former President Bush’s Emergency Plan for AIDS Relief which has improved life expectancy in Africa and will support lifesaving treatment for six million people by 2013.
The APGOA gives African exports duty-free access to the US market. Obama’s administration and business groups have urged the US congress to renew a key provision of the APGOA which is due to expire in September 2012. To continue to allow African nations to include goods produced with fabrics from third countries, so that expiration will not cost thousands of jobs or increase the cost of garments.
The Strategy commits Washington to encourage legal and regulatory reforms to spur investment and trade, improve economic governance and promote regional economic integration.
The US will also prioritise efforts to empower the next generation of African leadership with a pledge to extend beyond government but to broaden and deepen relationships between African and American people, businesses and institutions.
Africa is indeed a land of opportunity to echo President Obama and Hilary Clinton and being the home of six of the world’s 10 fastest-growing economies. Africa’s story of progress, rapid growth and economic vibrancy is helping to push record levels of investment from the East and now West.