Investment and trade ties between the United States and Sub-Saharan African countries will significantly grow in the next few years, said a top US official Wednesday, launching a new campaign designed to entice American companies to invest in Africa.
President Barack Obama will pay more attention to Africa during his second term and spurring Africa’s economic development is a key component of his recently launched strategy towards the continent, says the official.
“We’ve had some major economic and financial challenges in the US over the last four years, and President Obama has really focused his energies in his first term on putting the US economy on a stable path towards prosperity,” said Acting US Secretary of Commerce Dr. Rebecca Blank responding to critics that say Africa was forgotten during Obama’s first term.
“He obviously has a longtime interest in Africa. He has roots in Africa, as you all know, and I actually rather expect that he is going to put quite a bit of focus on the African region,” added Blank predicting a more engaged Obama in his second term. Obama’s new strategy
Obama launched a comprehensive new strategy towards Africa last June. The new campaign dubbed “Doing Business in Africa” was launched earlier this week as part of the strategy.
The president says Africa is becoming a global player that America needs to forge closer ties with.
“As we look into the future, it is clear that Africa is more important than ever to the security and prosperity of the international community and to the United States in particular,” wrote the President in the new strategy.
While strengthening Africa’s weak democratic institutions and supporting its fragile peace and security, Obama wants US resources to also work in driving ties between American and African markets.
Booming Africa buys American
Since 2009, Obama is implementing an ambitious plan of doubling US exports by 2014. With six of the 10 fastest growing world economies found in Africa, the continent is a potential buyer of more American goods.
With many middle economies expanding in Africa, the continent could demand more quality in the goods it buys. This is where the US sees an opportunity to come ahead of Asian companies currently present on the continent on a large scale.
“Everything that I know historically about growing middle classes is that they demand increasingly good and higher quality products. And I, again, have every confidence that US-based businesses are going to be able to cater to that growing middle class and to build markets here,” said Secretary Blank to journalists she addressed via conference call from South Africa on Wednesday.
American consumers are also increasingly buying African products. Flowers, fruits, nuts, cocoa, footwear and wine, exports from Africa are being supported with duty-free and other incentives to enter US markets as part of benefits from the African Growth and Opportunity Act (AGOA) legislation.
The trade volume between US and Africa reached 95 billion dollars in 2011, an increase of 16 percent from 2010.
US merchandise exports to Sub-Saharan Africa during 2011 were 21.1 billion dollars, up 23 percent compared to 2010. Africa’s exports to the US similarly rose, by 14 percent to 74.2 billion during the period.
But the figures represent less than three percent of the US’ total trade with the world; a sign Africa has a long way to go before claiming a significant share from the world’s number one economy.
‘Doing business in Africa’
Experts say a leading reason why American companies are not trading with Africa is because they are “unaware of the tremendous trade and investment prospects in Sub-Saharan Africa.” They also often face challenges establishing business relationships in the region.
The newly launched ‘Doing Business in Africa’ campaign will make efforts to change this, say American officials.
Creating awareness about key sectors and markets in Africa, and offering training for American business leaders about the region’s potentials are included in the to-do list of the campaign.
In an effort to market the continent to American investors, a series of conferences Africa Global Business Summits will be organized in the US starting next year.
“These summits will bring US Ambassadors and commercial service officers from Sub-Saharan Africa back to the U.S. to share strategies and tips with entrepreneurs and business owners to help them successfully enter key markets,” said acting commerce secretary Blank of the initiative.
Kirubel Tadesse is a freelance journalist and Associated Press writer based in Addis Ababa, Ethiopia.