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President Obama announced billions of dollars in new public and private investment in Africa’s rapidly growing markets -- on everything from construction to banking to clean energy infrastructure -- at the U.S.-Africa Leaders Summit in Washington. Gwen Ifill talks to Chris Fomunyoh of the National Democratic Institute and Torek Farhadi International Trade Centre about the growing partnership.
We turn now to the U.S.-Africa Leaders Summit happening this week in Washington.
The main event today was a business forum, where leaders focused on what they see as a wealth of untapped opportunities in one of the world's fastest growing markets.
President Obama's appearance highlighted day two of the summit, as he announced billions of dollars in new public and private investment.
PRESIDENT BARACK OBAMA:
We want to build genuine partnerships that create jobs and opportunity for all our peoples and that unleash the next era of African growth.
That's the kind of partnership America offers. I want Africans buying more American products. I want Americans buying more African products. I know you do, too, and that's what you're doing here today.
U.S. companies plan to spend about $14 billion on everything from construction to banking to clean energy initiatives like wind and solar power.
Former President Bill Clinton, also appearing at the conference, played up business prospects in Africa. In 2000, he signed the African Growth and Opportunity Act. The measure aimed to expand U.S. trade with African countries while encouraging free markets. It is up for renewal next year.
Today, he said investment in the continent remains — quote — "a massive opportunity."
FMR. PRESIDENT BILL CLINTON:
In spite of AGOA, which I signed almost 15 years ago, and all the things that have been done since, it strikes me that we have only barely scratched the surface of what we could and should be doing there and that we're missing the boat.
African leaders also highlighted the need to lift up future generations.
Jacob Zuma is the president of South Africa.
PRESIDENT JACOB ZUMA, South Africa:
I think it is important for people to look at Africa and see that Africa is changing. There's a good story that is coming out of the continent of Africa.
Phuti Mahanyele is chief executive of the investment holding company Shanduka Group, based in South Africa.
PHUTI MAHANYELE, CEO, Shanduka Group:
Fifteen-to-25-year-olds in Africa make up 60 percent of the population of the continent today. And so a key issue is making sure that we have those people being educated to be able to contribute towards, you know, the continued growth of our economies on the continent.
A number of African nations, including Rwanda, Angola and Mozambique, have made major strides rebounding from years of violence and political strife.
The African development bank says the middle class across the continent expanded from 220 million people in 2000 to 350 million a decade later.
For more on the effort to recast the narrative from African struggle to success story, I'm joined by Christopher Fomunyoh of the National Democratic Institute. He's observed elections across the continent. And Torek Farhadi, a senior adviser at the International Trade Centre, focusing on African finance and business.
Chris Fomunyoh, today, the U.N. Development Program has said, in spite of all the success, that Africa is still the most — the sub-Saharan Africa still the most unequal region in the world. What difference will this new investment announced today from U.S. and U.S. enterprise make?
CHRISTOPHER FOMUNYOH, National Democratic Institute:
I think, you know, there is an expectation that these new investments are going to really focus on the African people themselves, and also that they would target some of the areas in which the continent is still lacking, notably in the area of manufacturing and industrialization, so that Africa can shift from an instructive — industrial-based economy to one in which manufacturing also creates jobs and employment opportunities for young Africans.
Torek Farhadi, I want to get back to that bit about the young Africans, because that's a huge demographic challenge.
Torek Farhadi, I want to talk to you a little bit about what the president said today, which is that only 1 percent going to — 1 percent of U.S. trade goes to sub-Saharan Africa. Why is the U.S. lagging in that?
TOREK FARHADI, International Trade Centre:
Well, so far, the U.S. has been focusing on other markets.
And could say that one of the reasons is that the African market was a more difficult market. First, we talk about Africa as one continent, but it's composed of 50 countries, so you have to negotiate country by country, and not as a government, but when a private enterprise goes in, in every country, they have to deal with another set of arrangements for their investments.
So, the second reason for that is Africa has been lacking in infrastructure. In order to ship something from West Africa to East Africa, sometimes, companies find it easy to put it on a ship and just surround Africa, through South Africa, and send it to another port from East Africa to West Africa, but by sea because the roads are not there.
So the opportunities are there as well, because there is quite a number of construction projects and infrastructure projects which have been identified, would need financing, and they would make a lot of sense now for Africa.
And so much of that financing, Chris Fomunyoh, comes — so far anyway — from China or from even E.U. countries, rather than from the U.S.
I think that's a realization amongst the many Americans, including Americans in the private sector, that the U.S. has been lagging behind in terms of taking advantage of the opportunities that exists on the continent and also building partnerships with the African private sector.
That's why, last year, when President Barack Obama during his trip launched Power Africa initiative that received a lot of encouragement. And I'm delighted to hear that during this summit, it is a promise to increase the number of countries that could benefit from Power Africa.
Which is expanding the electrical grid.
Exactly, which is expanding the electrical grid into rural areas of the continent, and that new resources are coming in, not only from the American private sector, but also from other countries that are beginning to buy into that initiative, notably Sweden.
So I think the U.S. government with regards to Africa is doing what governments ought to be doing, which is creating an enabling environment that can then allow the private sector both from the United States and from within the continent to really reach those opportunities.
Torek Farhadi, as this summit has gotten under way, there — in every setting so far this week, there has been a certain amount of defensiveness that so often when we talk about Africa, we talk about insurrection or we talk about disease or we talk about terrorism, and what they wanted to do this week was change the subject.
Are there success stories? Are there ways that different countries on the continent have been rebounding?
I think what happens today on the disease side or insurrections, those are surmountable challenges. Especially, the partnership that America can offer to Africa is an important one. America has a lot of soft power and goodwill in the eyes of the African people, almost in every country in Africa.
The African population are looking forward to do more business with America. For that, they have to bring their products up to the standards on what we import in America. And for that, I think the U.S. can make a major contribution in education in Africa.
After all, we heard that the demographic curve is such that the young people there are the future. And already we have a population of more than 300 million people who are middle-income. So the opportunity for business is there.
I think a partnership of reciprocity and access to markets and trade and investment would benefit all the parties. Angola has launched that very well since the last 15 years.
The African Growth and Opportunity Act, AGOA.
Exactly. That's what President Clinton was referring to, that he had signed AGOA in the year 2000, and now it's up for renewal in 2015.
Let me ask you Christopher Fomunyoh about Rwanda, Mozambique, Sierra Leone, the places which we have identified as rebounding. This demographic piece, how much of that has to do with their rebound?
Well, it has to do — I think the demographic piece contributes a lot to explaining how these countries have bounced back.
But I think it's also been a wave of governance or attachment to democratic governance across Africa that has given the continent a face-lift. Obviously, the narrative still needs to be fully written. And there are still countries that are struggling both in terms of economic development, as well as with democratization and putting in place institutions that can really guarantee that a lot of this worth that is generated through trade and investment can actually be spread to the African populations that really need it the most.
However, when you look back at what has transpired in the continent in the last 10 — in the past 10 to 15 years, there's been a lot of — there's a success story that can be told for most of Africa.
You have talked about Angola. Yes, Angola, half of the country is diamonds and the other half is oil. It had a civil war for over — for decades. But today it's bouncing back and it's doing very well.
Sierra Leone, a few years ago, Sierra Leone was involved, embroiled in a civil war. But, today, Sierra Leone is contributing peacekeepers to African efforts at peacekeeping in the Horn of Africa, notably in Somalia. So the youth bulge, which represents well over 60 percent of the population, really counts for a market today and also a market for Africa of tomorrow.
Chris Fomunyoh and Torek Farhadi, thank you both so much.
Thank you for having me.
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