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Thursday, 04 July 2013 15:21

Growth: US Keen on Working with Africa

Obama_africa_1By Barack Obama*

WASHINGTON, July 04, 2013 (State Dept) - In our global economy, our fortunes are linked like never before. Growth and opportunity in Africa can mean more growth and opportunity in the United States. This is not charity; this is self-interest. That's why a key element of my engagement with Africa has been to promote trade and investment that can create jobs on both sides of the Atlantic. I believe we can accomplish that, because we've got an enormous opportunity to unleash the next era of African growth.

Africa is home to many of the world’s fastest-growing economies. Sectors like retail, telecom and manufacturing are gaining speed. In East Africa, over a decade, the region's economy quadrupled. The world is investing in Africa like never before. In fact, we're close to reaching a historic milestone where foreign aid to Africa is surpassed by foreign investment in Africa. That's great news.

 

That growth is changing lives. Poverty rates are coming down. Incomes are going up. More Africans are joining a growing middle class. African consumers are spending more and creating new markets where we can all sell our goods.

 

I see Africa as the world’s next major economic success story. The United States wants to be a partner in that success. That's why OPIC has tripled its investments in Africa, from hospitals in Ghana to biomass power generation right here in Tanzania. We launched a campaign to encourage more American companies to do business here. We've increased the value of our financing and support for trade and investment dramatically -- to more than $7 billion.

 

Over the past decade, under the African Growth and Opportunity Act, African exports to the U.S. have surged, and support jobs across the continent. Our exports to Africa have tripled -- with Caterpillar, for example, from my home state of Illinois, selling mining trucks to Mozambique. Boeing is selling airplanes to Kenya -- Kenya Airways. American-made solar-powered water treatment systems sold in Senegal and Cameroon, they're supporting jobs back in Pennsylvania.

 

So we're making progress, but a lot more work has to be done. There's a lot of untapped potential. The entire GDP of sub-Saharan Africa is still less than $2 trillion -- which is about the same as Italy. Our entire trade with Africa is about the same as our trade with Brazil or South Korea -- countries with a fraction of Africa's population. Of all our exports to the world, only about two percent goes to Africa. So I know we could be doing much more together.

 

Ways where we can make progress

First, to keep our trade growing, we need to renew AGOA. We've also got to make some decisions about how we can make it more effective. Today, the vast majority of our trade with Africa is with just three countries -- South Africa, Nigeria and Angola. We need to broaden that. We need to make sure more Africans are taking advantage of the opportunity to export to the United States. One of the best ways to do that is to make sure more African goods can compete in the global marketplace. That means more opportunities for small and medium-sized companies, and entrepreneurs, and merchants and farmers, including women.

 

Let me be candid -- improving AGOA is not going to be enough. The real answer to unlocking the next era of African growth is not in Washington, it's here in Africa.

First of all, African governments are going to have to take the lead -- not because the United States says so, but because that's what works best. For those willing to do the hard work of the necessary reforms to create a vibrant market economy and business environment, the United States is going to be a steady and eager partner.

 

So, for example, the vast majority of Africans working in agriculture, that's potential that has not been fully tapped. So we need country-led plans that can attract private capital so we're boosting the income of small farmers, which can fuel broad-based economic growth and lift 50 million Africans from poverty, putting some money in the pockets of the agricultural sector -- small farmers, small shareholders. Suddenly, you've got customers for a whole range of products, and that gives additional opportunities for African manufacturers or telecom companies or insurance.

 

For the overwhelming number of Africans who are young, we've got to make sure they've got skills and the networks and the capital to realize their ambitions. That's one of the reasons I'm announcing the expansion of my Young African Leaders Initiative, so we're investing in the next generation of African leaders in government and non-profits, but also in business.

 

We know that it has to become easier to do business in Africa but we need to tear down constraints. It still takes way too long -- too many documents, too much bureaucracy -- just to start a business, to build a new facility, to start exporting.

 

As part of our partnership for growth, we're working with countries like Tanzania and Ghana to make sure rules and regulations are encouraging investment, not scaring it away. If we can synchronize regionally between countries so that there is some standardization of how business gets done, that's helpful too, because then people don't have to try to figure out and unlock a different bureaucracy and a different system, different paperwork for even the most routine tasks.

 

We know that strengthening good governance is good business as well -- and this is something that I've been emphasizing. No one should pay a bribe to start a business or ship their goods. You should have to hire somebody's cousin who doesn't come to work just to get your job -- get your business done. You shouldn't have to do that.

 

As part of our global effort against corruption, we're working with countries across Africa to improve governance, enhance open government, uphold the rule of law. Trade will flow where rules are predictable and investment is protected.

 

We also know that unleashing Africa's economic potential demands more access to electricity. That's how businesses keep the light on. That's how communities can literally connect to the global economy. More than two-thirds of the people in sub-Saharan Africa have no access to electricity, even as Africa's potential to produce energy is vast. That's unacceptable in 2013.

 

That's why I announced Power Africa -- our initiative to double access to electricity in sub-Saharan Africa. I thank the African Development Bank for its partnership, as well as many companies that have stepped up with commitments. Those who are involved in this process continually tell us the problem is not going to be private-sector financing. The problem is going to be getting the rules right, creating the framework whereby we can build to scale rapidly. That's what we're committed to doing.

 

We're starting with countries that are making progress already with reforms in the energy sector -- Tanzania, Ethiopia, Kenya, Nigeria, Ghana, Uganda, Mozambique and Liberia. With a focus on cleaner energy, we will initially add 10,000 megawatts of new electricity generation, which expands electricity to 20 million homes and businesses.

 

We also know that many of the greatest opportunities for growth are often in markets right next door, right across the border. But if it's easier for you to sell to Europe than it is the folks right next door, we've got a problem. That's a constraint on Africa development and growth. It should not take longer to ship products between African countries than it does to ship to Europe. A company like Ford shouldn't have to transport cars to Kenya from South Africa by airplane because it's so expensive or unreliable to do it by road or by rail. So you've got to create a situation which is easier to trade within Africa.

 

I'm announcing a new initiative -- Trade Africa -- to boost trade with and within Africa, starting with the East African Community. As part of this effort, we'll negotiate a regional investment treaty with the EAC. We'll launch a new program to facilitate trade by focusing on moving goods across borders faster and cheaper. We'll work with the countries involved to modernize customs, move to single more efficient border crossings, reduce bottlenecks, reduce the roadblocks that stymie the flow of goods to market.

 

We're focused on specific goals. So moving goods faster between ports like Dar es Salaam and Mombasa to Burundi and Rwanda in the interior; or reducing the wait times that truckers endure at the border; increasing East African exports to the United States under AGOA by 40 percent and not simply increasing trade within East Africa -- doubling it. That's our aim. Those are the goals we're setting for ourselves under Trade Africa and here in East Africa. We intend this to be the foundation for similar progress regionally that we can do across the continent in years to come.

 

Finally, we're going to sustain our efforts. My Commerce Secretary, Penny Pritzker, will lead a major trade mission to Africa in her first year. My Treasury Secretary and my Energy Secretary will come to the region as well. We will bring American investors and businesses together in a major conference on doing business in Africa. Other American trade missions next year will focus on forging new partnerships in agriculture and energy and infrastructure. So, across the board, we want to step up our game.

 

I want to make sure we're doing everything we can to encourage the new growth we're seeing across Africa, and more trade between our countries. That's what your companies represent. That's what the incredible young men and women from across Africa represent.

 

If people across this continent are just given a chance, if they're just empowered with the skills and the resources and the capital -- and government is accelerating and advancing their opportunities as opposed to it being an impediment -- they can achieve extraordinary progress. That's what I believe.

 

That's why the United States is going to keep investing in efforts that unleash that potential and its greatest natural resource, which is its citizens. When we do, I'm absolutely convinced it won't just mean more growth and opportunity for Africa, it will mean greater prosperity for the United States and indeed the world.

*By Barrack Obama
President of the United States of America.


 
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