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US must try to bridge divide between Africa’s economic innovators and its political class

AP Photo/Themba Hadebe
U.S. Treasury Secretary Janet Yellen, left, listens as South Africa’s Minister of Finance Enoch Godongwana makes his opening remarks during their meeting at the National Treasury in Pretoria, South Africa, Thursday, Jan. 26, 2023, part of her South Africa visit. AYellen is on a 10-day tour of Africa, part of a push by the Biden administration to engage more with the world’s second-largest continent.

It is said that character is revealed by how one responds to adversity — that it is life’s setbacks that create the opportunity for renewal, and in other cases, and unfortunately, an excuse for retreat. I found this especially true observing the impact of the COVID-19 pandemic in Africa.

From September of 2020, when airports across Africa re-opened from the initial surge, I hit the road, often in a state of perpetual anxiety of being quarantined at a military hospital, or — worse — getting really sick and unable to return home. Then when normalcy returned last year, I lost count of the international conferences I attended with colleagues in the frenzy of return to in-person events on the continent.

I had the opportunity to see firsthand how different actors — governments, politicians, private sector, civil society and Africa’s international partners — responded to the challenge.  

My main takeaway was that Africa’s private sector — particularly its young innovators — met the moment, in contrast to the political class, which atrophied, and the international donor community, which at times aided and abetted the dysfunction.

It is my hope that the Biden administration learns from the pandemic response as it implements the substantial commitments it made during last year’s US-Africa Leaders Summit, which brought together more than 40 African presidents with President Biden, congressional leaders, U.S. diplomats, business leaders, and the African diaspora, for a reset with the continent.

Here’s why.

The pandemic accelerated changes in citizen behavior, and the private sector met them on their level of need and ability to pay. African companies created thousands of new products and services at price points that could be absorbed through economies of scale enabled by innovation. This development was made possible by more than a decade of dedicated investment in home-grown technology solutions to community-based challenges.

And the global capital markets, led by the United States, responded. During 2021, African tech startups raised a record nearly $5 billion, much higher than the global average. This included companies like Interswitch, Paystack and Flutterwave, part of Nigeria’s fintech revolution, and entrepreneurs changing the face of healthcare delivery in Africa.

The crisis also showcased the nimbleness of Africa’s public-private partnerships, including financial institutions like the African Finance Corporation and the African Export-Import Bank, which moved in to fill the financing gaps for vaccines and brought liquidity to depressed economies.

In contrast, the majority of African governments only got further mired in corruption. In too many countries there was government scramble to profit personally from COVID aid, only deepening the wounds of the pandemic.

The health emergency also was used to consolidate power, big-man style. With the world’s attention drawn elsewhere, particularly after Russia’s invasion of Ukraine, the continent saw a spike in military coups, and the spectacle of a Central African President extending his 43 years in office. Effortlessly.

Africa’s donor nations did not help matters by channeling funds and goods solely through public health facilities, while relaxing accountability measures to monitor their use. Little effort was made to bring in Africa’s private sector, even though in the United States vaccine development and distribution heavily relied on such a public-private partnership.

It’s not sustainable to have an African governing class continue to narrow the democratic space and crowd out its private sector, particularly when the imperative to generate employment and create economic opportunity on a continent of 1.3 billion — where by 2050 one in every fourth person on Earth will be African — is all but an existential threat to the planet.

As the Biden administration prepares to deliver on its 2022 Summit commitments — it needs to consider how its policies, funding, programs, and engagements feed the continent’s innovators — and starve out its political dysfunction. It needs to be willing to ask some hard questions:

  1. 20 years later, does it still make sense for our billions of healthcare dollars for PEPFAR to run solely through public health facilities with poor track records of patient retention? And without consideration for how these drugs can become part of a supply chain that addresses other chronic illnesses on the continent?
  2. As the U.S. Trade Representative considers the reauthorization of the African Growth and Opportunity Act (AGOA) set for 2025, shouldn’t we be aligning our bilateral framework with the ambitions of the African Continental Free Trade Area (AfCFTA) which has the potential to boost to economic output of $29 trillion by 2050 and to lift 30 million people out of extreme poverty? Are we considering fiscal incentives for U.S. investors to participate in the value addition of critical commodities, like we did for textiles 23 years ago?
  3. What about the U.S. Agency for International Development (USAID)? Can we supercharge USAID Administrator Samantha Power’s 25 percent commitment to the localization in Africa spending?
  4. As for the $55 billion promised for Africa over the next three years announced at the summit? What is the administration’s plan to get it appropriated through the Republican-led House? How can new monies be directed to de-risk investment for American companies so that the private sector, along with the African Diaspora, can be a force multiplier for scarce U.S. government resources?

I am hopeful that that these questions will being considered as the Biden administration executes on its summit commitments and unleashes its parade of Cabinet officials to the continent, the capstone of which will be a visit by Biden himself later this year.

K. Riva Levinson is president and CEO of KRL International LLC, a D.C.-based consultancy that works in the world’s emerging markets, award-winning author of “Choosing the Hero: My Improbable Journey and the Rise of Africa’s First Woman President.”

Tags Accountability Africa African Continental Free Trade Area African entrepreneurs African Export-Import Bank African Growth and Opportunity Act African tech startups Biden coronavirus pandemic Corruption COVID-19 pandemic COVID-19 vaccines Joe Biden Pandemic response PEPFAR Political corruption Private Sector public-private cooperation Public-Private Partnerships Samantha Power US-Africa Leaders Summit US-Africa policy USAID

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