America must up its game in Africa
It has been eight years since America last hosted an African Leaders Summit. China has been hosting its Forum on China-Africa Cooperation every three years. The recent U.S. summit should commence an intensified focus on Africa — not just to catch up with other nations and to show America’s heart, but to avoid foregoing mutually beneficial opportunities.
Recent steps towards greater coordination among Africa’s more than 50 nations is encouraging. As barriers for commerce among countries within Africa are reduced, the attractiveness for investing in Africa increases. Now is the time for America to focus more intently on Africa, not only on security matters, but economically — not just as a source of raw materials, but for opportunities across the economic spectrum.
Africa is on a path to be a quarter of global population by 2050 and 39 percent by 2100, yet it attracts only 3 percent of global foreign direct investment (FDI). Despite the good work of government programs like Power Africa and Prosper Africa, America ranks fourth in FDI after China, Russia and the UAE, just barely ahead of Italy.
The United States economy is 11 times the size of Italy’s.
If America’s FDI in Africa were just three times that of Italy, the United States would be the leading investor in the continent. In trade with Africa, America’s share is only a fraction of the European Union’s and also trails China.
America needs to up its game in trade and investment support.
Collaboration in support of AfCFTA
The World Bank says that the African Continental Free Trade Area (AfCFTA) agreement that recently came into force “connects 1.3 billion people across 55 countries with a combined gross domestic product valued at US$3.4 trillion.” It observes that “It has the potential to lift 30 million people out of extreme poverty,” but “achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.”
This makes the recent agreement to cooperate between the AfCFTA Secretariat and the United States so important. AfCFTA’s openness to annual high-level engagement with the United States and quarterly meetings of technical working groups is welcome. If America can in any way facilitate increased trade between countries on the continent, it would be highly beneficial to all parties. It would lead to expanded markets and potentially new agreements on investments, competition, and intellectual property. This in turn will make investing in Africa more attractive — and greater investment is key to lifting millions out of poverty.
The primary U.S. trade agreement with Africa, the African Growth and Opportunity Act (AGOA), expires in 2025. African countries whose manufacturing sectors have gained from easier access to the American market are anxiously watching whether Congress is on board for a renewal.
The Trump administration signaled a preference for reciprocal bilateral trade relations rather than nonreciprocal agreements like AGOA.
Biden administration officials point to the need to “increase the utilization rates, particularly among smaller and less-developed countries, as well as ensure that the program’s benefits fully reach all segments of society.” They suggest linking AGOA and AfCTA.
Given the growing opportunities for tapping a unifying continent of consumers and the degree to which America lags in engaging Africa, the question should not be whether a continent-wide trade agreement is renewed, but in what form.
Kenya trade agreement
The first African country to reach the final four in the World Cup is the only country with whom America has a trade agreement — Morocco.
Kenya, the only African country currently in bilateral trade talks with the United States, views an agreement as a path to not losing market access if AGOA is not extended. Negotiations begun in the Trump administration and launched anew in July seek to address a wide range of important issues. Yet the Biden administration is unwilling to address tariffs, even though AGOA currently provides relief.
Offering even less than what is provided today would be a step towards forfeiting the continent — and the opportunities it holds — to other nations.
Infrastructure investments support
Under the banner of the G7’s Global Partnership for Infrastructure and Investment, the United States is providing infrastructure investment support. This support has been focused on food security, renewable energy and healthcare.
The associated projects benefit the host nations.
The process with which they are delivered enhances the rule of law.
Projects help establish commercial ties that are mutually beneficial.
Much of this investment support is provided in a manner that returns net revenue back to American taxpayers.
Yet America also lags in infrastructure support. It is woefully behind in supporting Africa’s critical minerals resources. Its neglect of investment in ports has opened the door for China, which can also use them to support a global naval presence.
Perhaps most harmful to America’s economic and geopolitical success is falling behind in digital security.
The administration launched the Digital Transformation with Africa program to “expand digital access and literacy and strengthen digital enabling environments across the continent.” This supports needed infrastructure and human capital, but also the development of regulatory frameworks that “promote competition, innovation, and investment” while sustaining “an open, interoperable, reliable, and secure digital ecosystem.”
To compete with China, however, America must go further.
The Chinese government has heavily subsidized 5G telecommunications companies like Huawei as they have gained global dominance. This not only precludes economic opportunities for Western providers but leaves Africa vulnerable to Chinese spying because China’s manufacturers are subject to its extensive data access laws.
Many African governments wish to lessen their dependence on China and leverage cutting-edge western technology. To help them achieve vendor diversification through Open RAN, a flexible and cost-competitive alternative to Huawei, America and its allies should provide financial support for the procurement of technology from trusted vendors in telecommunications and cybersecurity.
Actions the United States takes today will shape its relationship with a continent whose population will rival Asia’s by the end of the century.
America must embrace Africa with mutual respect to capture the mutually beneficial opportunities it holds.
Mark Kennedy is Director of the Wahba Institute for Strategic Competition at the Wilson Center for International Scholars. He is a U.S. Air and Space Forces Civic Leader, president emeritus of the University of Colorado, and former U.S. Representative (2001-07) from Minnesota. He served as a trade advisor under both President George W. Bush and President Barack Obama.