The recent US-Africa Forum was a serious signal to the East that US endeavours to secure a dominant position for Business Interest in Africa.
Mike Bloomberg the former mayor of New York, owner of Bloomberg Inc with net worth of US$ 44 billion alongside Penny Pritzker the Secretary of Commerce hosted the much anticipated and “sold-out” US-Africa Business Forum that portrays cosmic enthusiasm to re-explore lucrative and aggressive interest in Africa. Recently the west was reluctant and practised drawbacks towards business interest in Africa and this move seems like a re-capture of key its position. The aim was to bolster trade, investment, finance, infrastructure, power, energy, agriculture, consumer goods and ICT.
In SADC we have witnessed the drawbacks of currency from Angola and Zimbabwe and literally their withdrawal of oil corporations in Nigeria and Angola to focus on their domestic supplies. The emerging focus on Africa is tantamount because US has the world’s strongest financial market and maximum number greenfield investors. The AGOA agreement for Sub-Sahara Africa was extended for 10 years in 2015, however it is holistically not efficient for trade liberalization because it exploits some markets and enforces stringent conditions, for example the chicken imports in South Africa, car industry trade and tighter controls in others. We must be vigilant of the degree of tolerance over one-sided policies that undermine our business morale. The US must consider the variance in the geometry of Africa and standards because there are cost and technical factors that widen the trade gap.
The forum was attended by 29 African heads of state and delegates from 44 countries and more than 150 CEO’s from US corporations. I was wondering why much of the African private sector was not represented, so we can avoid creating “political-prenuers”. Most state officials do not share the opportunities with the wider public which usually end-up in the hands of their closest associates. The world is reaching a downturn in trade and there are thresholds for exploring resources and Africa seems to be a panacea for that. African wealth potential lies in unexplored resources and security woes in conflict zones. Somewhere in the private discussions there must have been offers for such resources and debt to finance more infrastructure. We need investment but we also need a coherence in transparency measures to avoid a situation similar to Angola where oil is dominated by one family, a scenario boosted Chevrons size. Remarkably our countries paddle back in poverty while the west maintain the ivy league status quo. Its not what we do, it’s how we do it, and Penny’s appealed for private sector collaboration ad I quote: “But government efforts alone are not sufficient. If we are going to grow the U.S.-Africa relationship, the business community is an essential partner.” The forum mobilized US$ 9.1 billion in trade and investment to support African business sector and announced US$ 33 billion worth of interest in deals. Last year China pledged US$ 60 billion investments interest for Africa over the next three years and another 500 million US$ was raised this year (2016). China also established a China Africa Development Fund worth US$ 2.9 billion.
According to the Department of Commerce the proposed deals where: Caterpillars expansion in Africa worth US$ 1 billion, Wind Power generation in Senegal by OPIC worth US$ 331 million, Kupanda Capital funding for online fashion trends, Electricity for Kenya, Coca Cola’s US$ 5 billion expansion plans to build more than 30 bottling plants (too much coke). Namibia has interest in energy, property, fishing, etc. Africa must highlight trade in food security and agricultural projects because we eat food and not money “Amen”. As reported by Brookings website the Department of commerce has doubled its presence in Africa by establishing new offices in Angola, Tanzania, Ethiopia, Mozambique and expanded its role in Africa Development Bank and Ghana. I strongly believe the move is to create jobs on both continents and we have to note that the NAFTA and TPP trade agreements are other contemporary US priorities.
Sadly, Goods exported from Africa to the USA declined by 51% in 5 years between 2011 and 2015. There is a 45% increase in American exports to Africa and this mean the cumulative 5-year trade balance weights badly for Africa as we import more from USA than we export to USA. Mostly due to oil and other commodities, subsequently US and Canadian companies export their commodities from Africa directly to China. The trade deficit in 2015 alone was worth ZAR 7 Billion in America’s favour. “Mind you, the trade surplus in 2011 valued R 448 billion in Africa’s favour, then how did trade tumble down to a rock-bottom level by losing R 349 billion worth of trade in 5 years.” The business forum has to weight offensive interest to competently regain favourable trade stability to avoid continental revenue loses. In conclusion I applaud President Barack Obama’s exit doxology to rescue his home continent from its deepening de-industrial blackout. God bless.
Rodney Dan-Ao !Hoaeb is a Trade and Investment Researcher Committed to seeing a radical economic shake-up in Namibia.