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November's Last Word

Steve McDonald

By Steve McDonald

So, here we are.  We have weathered one of the most divisive American election campaigns in recent memory.  What does this mean for Africa?  Current signals coming from high level administration officials are that the President will pay a great deal more attention to Africa in his second term than he did in his first.  The White House is already beginning to plan for a major Africa trip that will most likely be scheduled in the spring of 2013.  While dates and countries are far from being set, a great deal of thought will go into this trip in terms of what the focus will be, and what signals or messages the President wants to impart. Even though the trip alone will be an important statement, the key is going to be in finding the substance behind the rhetoric and fanfare.  No doubt, as Africa welcomes back the first U.S. President of direct African heritage, the ceremony and celebration will be exceptional.  However, if the June 14, 2012 Presidential Policy Directive (PPD) on Sub-Saharan Africa continues to maintain its status as the ruling policy document towards the continent, not much will change.

There were four strategic priorities contained in the PPD: (1) strengthening democratic institutions; (2) spurring economic growth, trade, and investment; (3) advancing peace and security; and (4) promoting opportunity and development.  As we often hear, "The devil is in the details."  In fact, these are the same four pillars put forward back in 2008 during Obama's campaign, and they have been the ruling doctrine informing African policy for the past four years.  We all want democratic institutions, peace and security, opportunity, development, and economic growth for Africa.   But what can we do to add some teeth into these ideals and, more important, what policy initiatives have a chance of gaining traction?

There is one directive spelled out by the President, that of spurring economic growth through trade and investment in Africa, which does catch the attention of U.S. policymakers and the average American. This, in part, addresses lingering questions surrounding global leadership and domestic economic recovery that took center stage during the campaign.  If U.S. Government policy can focus on a comprehensive, coordinated economic plan for U.S. involvement in Africa, it would help creates jobs and increase revenue for Americans, while concurrently assisting Africa in its own economic progress and thereby promoting stability, peace, and development.  In the end, this might be the only issue around which international partnerships, or at the very least cooperation, can be formed.

The area of trade and investment is one of the few around which bipartisan coalitions can be formed in our current polarized political atmosphere.  While the U.S. has had the African Growth and Opportunity Act (AGOA) and the Millennium Challenge Grants – both ending in 2015 – along with a number of other initiatives to spur investment, the country has been very risk adverse in committing to investment in Africa.  The U.S. has had nothing equivalent to the Chinese Forum on China/Africa Cooperation or the European Partnership Agreements.  No comprehensive economic policy has been vetted or proposed.

This is an area in which the Africa Program of the Wilson Center is taking initiative to convene an inclusive group of stakeholders from Congress, the Administration, private sector, and key advocacy and NGO groups to begin to fashion such a comprehensive and cooperative policy.  The objective would be to encourage interagency cooperation, such as unleashing the enormous financial power of agencies like OPIC and the Export-Import Bank to back investment flows to Africa; or to institutionalize a forum of U.S. multinational corporations and major financial entities like investment banks and firms, insurance companies, pension funds and equity funds to create avenues to foster investment in risky, yet high return, investments prevalent in Africa.

The Corporate Council on Africa (CCA) is already doing a remarkable job in promoting private sector attention to this issue.  In fact, USAID has already formed a Private Capital Group for Africa Partners' Forum made up of investment banking and private capital groups, to begin to marshal their resources for the support of small and medium enterprises in Africa and foster "greater investment that supports key development objectives in Africa."  Congress recently passed the "American Jobs Through Greater Exports to Africa Act of 2012," which was designed to double U.S. exports to the region.  The focus of both the Executive and Legislative branches remains sectorally and geographically limited, relying too much on bilateral or regional initiatives, like the recent USAID focus on the East African Community. However, while the U.S. Trade Development Agency, Commerce Department and other agencies continue to labor within their own silos, they are missing the opportunity to develop a more efficient, coordinated approach that will better serve to promote U.S. trade throughout Africa.

With vast economic potential and relative stability of modern Africa, along with an increasingly modern, sophisticated, urbanized market and professional/entrepreneurial class, investors from OECD countries, China, India, Japan, Brazil, and Turkey have begun to move in big time.  The U.S. private sector is just beginning to catch on, being made more comfortable by reports like those of McKenzie Global Institute and Renaissance Capital group which paint Africa as the place where all the "smart money" is being invested.  As a second term Obama Administration and still-divided Congress start to look at opportunities for policy priorities, they should look no further than the need to fashion a comprehensive, coordinated economic policy on Africa.  Working with the African Union, the UN Economic Commission on Africa, the World Bank and the African Development Bank,  as well as African and U.S. government and private sector stakeholders, there could be no more positive or profitable nail to hang the U.S. policy hat on and create that level playing field with China and Europe about which both candidates have campaigned – a truly win-win situation for all stakeholders.


About the Author

Steve McDonald

Steve McDonald

Former Director, Africa Program, Woodrow Wilson Center
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Africa Program

The Africa Program works to address the most critical issues facing Africa and U.S.-Africa relations, build mutually beneficial U.S.-Africa relations, and enhance knowledge and understanding about Africa in the United States. The Program achieves its mission through in-depth research and analyses, public discussion, working groups, and briefings that bring together policymakers, practitioners, and subject matter experts to analyze and offer practical options for tackling key challenges in Africa and in U.S.-Africa relations.    Read more