Amplifying U.S.-Africa Trade, Investment, and Economic Relations: From Obama to the Next Administration
On the eve of the 2016 U.S.-Africa Business Summit and as President Obama prepares to leave office, the Wilson Center and Brown Capital Management examined the Obama legacy on U.S.-Africa business and economic relations, and explored what U.S.-Africa business and economic relations might look under a Clinton or Trump administration.
Amplifying U.S.-Africa Trade, Investment, and Economic Relations: From Obama to the Next Administration
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On Tuesday, September 13, the Wilson Center Africa Program hosted a panel discussion on “Amplifying U.S.-Africa Trade, Investment, and Economic Relations: From Obama to the Next Administration,” as part of the Brown Capital Management Africa Forum series. The event featured three speakers – Mr. Walé Adeosun, a member of the President's Advisory Council on Doing Business in Africa (PAC-DBIA) and the Founder and Chief Investment Officer at Kuramo Capital Management; Ambassador Johnnie Carson, an advisor to the Clinton campaign and former Assistant Secretary of State for African Affairs at the U.S. Department of State; and the Honorable Joseph Schmitz, an advisor to the Trump campaign and former Inspector General at the U.S. Department of Defense – who reflected on U.S.-Africa economic engagement under the Obama Administration and shared views of what U.S.-Africa business and economic relations might look under a Hillary Clinton or Donald Trump administration, including key strategies and focal points for economic and business engagement, and how they would fit into broader U.S.-Africa relations in the post-Obama era.
Congresswoman Jane Harman, President, Director, and CEO of the Wilson Center, provided welcoming remarks, expressing her gratitude to Brown Capital Management for enabling a forum to address serious public policy conversation on such critical issues – in this case, on U.S. presidential leadership on Africa. Mr. Eddie Brown, Wilson Center Cabinet Member and Chairman, CEO, and Founder of Brown Capital Management, followed with remarks on the idea and goals behind the Africa Forum, in particular its role in providing the opportunity to elevate the visibility of issues in Africa and U.S.-Africa relations, particularly on trade and investment issues, in the United States.
Dr. Monde Muyangwa highlighted the significance of the event and the context of the discussion. As President Obama prepares to leave office after 8 years, it is important to reflect on what his administration has accomplished, identify the key challenges faced by U.S.-Africa economic relations, and assess his Africa legacy. In November, the United States will hold presidential elections, which will result in a major handover of U.S.-Africa policy. However, on the campaign trail, discussion of Africa has been largely absent from both candidates, which made this discussion particularly timely, offering the opportunity to hear from the two campaigns on their visions for U.S.-Africa relations and economic engagement in the post-Obama years.
Dr. Muyangwa provided an overview of where U.S.-Africa relations have come from, stating that for many years, U.S.-Africa relations had been defined by what she terms “negative issues” – humanitarian crises, conflict, and insecurity. Under this construct, economic and development issues remained largely on the periphery of U.S. engagement with the continent. Upon President Obama’s election in 2008, U.S.-Africa economic relations were still in the early stages of development, with AGOA being the centerpiece. During his tenure, President Obama sought to move U.S.-Africa economic engagement more centrally into the framework of U.S.-Africa relations, establishing and expanding key programs including the U.S.-Africa Business Forum, the Doing Business in Africa Campaign, the President’s Advisory Council on Doing Business in Africa, the Department of Commerce and USTDA 20x20 Initiative, Power Africa, the African Women’s Entrepreneurship Program (AWEP), as well as the 10-year reauthorization of AGOA by Congress. However, as Dr. Muyangwa mentioned, President Obama’s re-positioning of U.S.-Africa economic relations has not been without its detractors, and thus a realistic assessment is necessary.
Mr. Walé Adeosun kicked off the substantive discussions with an assessment of U.S. business and economic policy towards Africa under the Obama Administration, sharing his perspectives from a business and commercial viewpoint. Reflecting on Dr. Muyangwa’s remarks about the absence of conversation of Africa on the campaign trail, Mr. Adeosun noted a parallel pattern in the business community, where positive growth rates in African economies are acknowledged but little is acted upon. Mr. Adeosun highlighted that the potential returns are much higher in frontier markets than in developed markets, where growth rates are low or stagnant. However, it has been a challenge for investors to get a sense of the attractiveness of the return on investment in Africa because of a perception of risk and a lack of publicity about commercial successes.
One of the key accomplishments by President Obama and the PAC-DBIA has been to reduce this risk perception gap, which has kept many U.S. entities from investing capital in Africa markets. Particularly encouraging were the President’s trips to Africa during his presidency, which signaled a confidence in engaging with African countries; holding the first U.S.-Africa Business Forum in Washington, DC in 2014, with the second iteration to be held in New York City in September 2016 (bringing together 50 African presidents in the financial capital of the world); and re-authorizing AGOA. Successes are also being realized from the President’s action on the recommendations of the PAC-DBIA, which outlined three focus areas for development: infrastructure (primarily in energy and transportation); vocational and skills training, through programs such as the Young African Leaders Initiative (YALI); and deepening U.S. commercial dialogue and engagement. Despite challenges, primarily due to the timing of the President’s entrance into office during the recession, Mr. Adeosun remained positive about the President’s impact in Africa and expressed his desire for the next administration to maintain the momentum established.
Following Mr. Adeosun, Ambassador Carson and the Honorable Joseph Schmitz offered their remarks on a prospective Africa policy under their respective candidates.
Ambassador Carson began his remarks by reflecting on the legacy of the Obama Administration in Africa, noting the strong foundation of economic engagement which has targeted some of Africa’s most challenging economic problems and has introduced new programs and initiatives as outlined above. Under President Obama, U.S. engagement with Africa has gone significantly further than we have seen before, but there is much more that can and should be done. Looking forward, a Clinton administration is likely to build upon and expand the current focus on African economic policy initiatives and issues. Examining the candidate herself, Ambassador Carson highlighted Mrs. Clinton’s sincere interest in Africa, traveling to the continent on many occasions as First Lady, and continuing to demonstrate her dedication through her tenure as Secretary of State through her leadership in formulating policy in Africa, participating in all of the annual AGOA conferences and fighting for the extension of AGOA, and serving as the first Secretary of State to lead a trade delegation to Africa.
Looking forward, Ambassador Carson offered recommendations for the next administration: to increase our commercial representation across Africa; expand our trade hubs; expand the number of foreign commercial officers on the continent; increase the availability of experts from the agricultural sector to determine whether African agricultural products meet Americans standards for import into the United States; establish a position for a high level coordinator for Africa policy (probably at the Department of Commerce) equivalent to the level of U.S. Assistant Secretary of State in the Africa Bureau; expand support for the Overseas Private Investment Corporation; and revise the charter of the Millennium Challenge Corporation to allow for greater flexibility to provide grant to sub-national entities, for example to a Nigerian state.
In closing, Ambassador Carson noted that whatever we do in Africa must be resourced well, not only in terms of financial commitment, but also through a commitment of policy and people. There have been many achievements which should be applauded, he stated, but this should form the basis on which we launch rather than on which we rest.
The Honorable Joseph Schmitz began his remarks by outlining a number of trends currently being seen in Africa and in U.S.-Africa relations. While Africa is home to vast resources, both in terms of human capital and cultivatable lands, he noted, the continent has yet to realize its economic and social potential and continues to suffer from the challenges of endemic poverty. This extreme poverty has in turn fueled massive migration flows out of African countries, with large populations setting out in dangerous routes to European destinations. There also has been noteworthy economic growth, however – for example, 6 of the 13 fastest growing nations in the world are in Africa. However, this economic expansion is hampered by the fact that most exports are primary products, as opposed to finished, value-added products. The total value of imports and exports between the U.S. and Africa in 2015 was valued at $53.5 billion, compared to $700 billion between the U.S. and the European Union in the same year. As Mr. Schmitz noted, this underscores the overwhelming economic challenge that Africa continues to face despite billions of dollars of foreign assistance over the past 15 years.
Mr. Schmitz cited some noteworthy U.S. initiatives in Africa under President Obama, including AGOA and Power Africa, and noted that there is room to build on the currently limited U.S.-Africa trade relationship by building on these programs and other initiatives. In order to promote the growth of African economies and create the necessary conditions for economy growth and development, Mr. Schmitz highlighted the following key objectives: building civic society and strengthening the rule of law; promoting democratic governance and institutions; supporting market economies; bolstering education and health systems; promoting electrification; and curbing corruption. Mr. Schmitz emphasized that there is too much at stakes for both Africans and Americans not to do all that we can in order to improve the conditions that allow for an extensive increase in mutually-beneficial trade. To expand on U.S.-Africa economic engagement under a Trump administration, Mr. Schmitz highlighted the prioritization of “smart” trade and aid; working to make Africa great even as we strive to make America great again; and continuing to vigilantly strive to eliminate corruption in both Africa and Washington.
This issue of corruption and aid elicited remarks from all speakers, and while the panelists agreed that corruption is a global problem not limited to African governance, there was a divergence of opinion on prevalence and implications for U.S. policy and economic engagement. Mr. Schmitz remarked that corruption is one of the main reasons that growth of African economies have been unable to keep up with the increase in population, undermining the pillars of social and economic development and the rule of law, discouraging private investment, and hampering growth. He highlighted the need for the next administration to be uncompromising in the management of aid policies, exhibiting zero tolerance in the face of corruption and withholding foreign assistance when necessary.
Mr. Adeosun emphasized the global nature of corruption and the strong trend towards democratization and improvements in governance on the continent. The narratives of corruption and Africa as a passive recipient of aid are outdated, he continued. Africa holds great potential for wealth generation, and he suggested policies focused on creating an enabling environment for international trade and investment.
Launched in September 2015, the Brown Capital Management Africa Forum provides a premier platform for substantive and solutions-oriented dialogue on key trade, investment, and development issues in Africa, and in U.S.-Africa relations. Convening business leaders and policymakers, as well as subject matter experts from the United States and Africa, the Brown Capital Management Africa Forum sponsors a series of public events designed to support the development of economic engagement and policy options that advance mutually beneficial economic relations between Africa and the United States. The Brown Capital Management Africa Forum is made possible by the generous support of Brown Capital Management.
This event will was livetweeted and webcast. Follow the Africa Program Twitter account @AfricaUpClose and catch up on the conversation.
Mr. Walé Adeosun, CFA
Honorable Joseph E. Schmitz
Ambassador Johnnie Carson
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, including our blog Africa Up Close, 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