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U.S.-Africa summit garners over $17 bln in investment pledges

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U.S.-Africa summit garners over $17 bln in investment pledges

U.S.-Africa summit garners over $17 bln in investment pledges
Bloomberg Philanthropies and the U.S. Department of Commerce co-hosted the first-ever U.S.-Africa Business Forum on Tuesday, August 5, 2014 in Washington, D.C. Photo credit: Mike Bloomberg | USAfricaBusinessForum.org

African leaders on Tuesday called for a deeper economic relationship with the United States, hailing investment pledges totaling more than $17 billion at a Washington summit as a fresh step in the right direction.

U.S. and African companies and the World Bank pledged new investment in construction, energy and information technology projects in Africa at the U.S.-Africa Business Forum, including several joint ventures between U.S. and African partners.

“The United States is determined to be a partner in Africa’s success,” President Barack Obama said in a speech at the forum. “A good partner, an equal partner, and a partner for the long term.”

The U.S. president also urged African officials to create conditions to support foreign investment and growth.

“Capital is one thing, development programs and projects are one thing, but rule of law, regulatory reforms, good governance, those things matter even more,” he said.

African leaders said they were optimistic of becoming full partners in a relationship worth an estimated $85 billion a year in trade flows, as U.S. business leaders eyed opportunities in the region, home to six of the world’s 10 fastest-growing economies – even if they might be late to the party.

“We gave it to the Europeans first and to the Chinese later, but today it’s wide open for us,” said the chief executive of General Electric Co, Jeff Immelt, who on Monday announced $2 billion to boost infrastructure, worker skills and access to energy.

Tanzanian President Jakaya Kikwete said Africa wanted to move away from a relationship of “aid donor and aid recipient” to one of investment and trade.

Kikwete told the forum that with Obama and senior officials encouraging the business community “to take Africa seriously, I think this time we will make it.”

More than 90 U.S. companies participated in the forum, part of a three-day summit which has brought almost 50 African leaders to the U.S. capital, including Chevron Corp, Citigroup Inc, Ford Motor Co, Lockheed Martin Corp, Marriott International Inc and Morgan Stanley .

Many already have a foothold in the region, which is expected to have a larger work force than China or India by 2040 and boasts the world’s fastest-growing middle class, supporting demand for consumable goods.

The Coca-Cola Co said it would invest $5 billion with African bottling partners in new manufacturing lines and equipment, as well as safe water access programs, over six years, and the chief executive of IBM, Ginni Rometty, said the IT giant would plow more than $2 billion into the region over seven years.

Still, Aliko Dangote, the president of Nigeria’s Dangote Group, whose operations include cement making, flour milling and sugar refining, said nothing works without adequate power.

Dangote signed an agreement to jointly invest $5 billion in energy projects in sub-Saharan Africa with Blackstone Group funds, also calling for the U.S. Export-Import Bank to remain open to support African companies buying U.S. goods.

The World Bank, which committed $5 billion to support electricity generation, estimates that one in three Africans, or 600 million people, lack access to electricity despite rapid economic growth expected to top 5 percent in 2015 and 2016.

Obama took part in a discussion with corporate chief executives and government leaders at the event, also attended by U.S. Commerce Secretary Penny Pritzker as well as former President Bill Clinton and former New York Mayor Michael Bloomberg.

“These deals and investments demonstrate that the time is ripe to work together as partners, in a spirit of mutual understanding and respect – to raise living standards in all of our nations and to address the challenges that impede our ability to develop closer economic bonds,” Pritzker said.

African telecoms billionaire Mo Ibrahim encouraged U.S. businesses to invest in Africa and make money, but also said they should “pay their taxes.”


Remarks by the President at the U.S.-Africa Business Forum

Extracts from US President Barack Obama's speech at the U.S.-Africa Business Forum on 5 August 2014, Washington, D.C.

So we are here, of course, as part of the U.S.-Africa Leaders Summit – the largest gathering any American President has ever hosted with African heads of state and government. And this summit reflects a perspective that has guided my approach to Africa as President. Even as Africa continues to face enormous challenges, even as too many Africans still endure poverty and conflict, hunger and disease, even as we work together to meet those challenges, we cannot lose sight of the new Africa that’s emerging.

We all know what makes Africa such an extraordinary opportunity. Some of the fastest-growing economies in the world. A growing middle class. Expanding sectors like manufacturing and retail. One of the fastest-growing telecommunications markets in the world. More governments are reforming, attracting a record level of foreign investment. It is the youngest and fastest-growing continent, with young people that are full of dreams and ambition. 

Last year in South Africa, in Soweto, I held a town hall with young men and women from across the continent, including some who joined us by video from Uganda. And one young Ugandan woman spoke for many Africans when she said to me, “We are looking to the world for equal business partners and commitments, and not necessarily aid. We want to do [business] at home and be the ones to own our own markets.” That’s a sentiment we hear over and over again. When I was traveling throughout Africa last year, what I heard was the desire of Africans not just for aid, but for trade and development that actually helps nations grow and empowers Africans for the long term.

As President, I’ve made it clear that the United States is determined to be a partner in Africa’s success – a good partner, an equal partner, and a partner for the long term. (Applause.) We don’t look to Africa simply for its natural resources; we recognize Africa for its greatest resource, which is its people and its talents and their potential. (Applause.) We don’t simply want to extract minerals from the ground for our growth; 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.

And since I took office, we’ve stepped up our efforts across the board. More investments in Africa; more trade missions, like the one Penny led this year; and more support for U.S. exports. And I’m proud – I’m proud that American exports to Africa have grown to record levels, supporting jobs in Africa and the United States, including a quarter of a million good American jobs.

But here’s the thing: Our entire trade with all of Africa is still only about equal to our trade with Brazil – one country. Of all the goods we export to the world, only about one percent goes to Sub-Saharan Africa. So we’ve got a lot of work to do. We have to do better – much better. 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 today. (Applause.)

So I’m pleased that in conjunction with this forum, American companies are announcing major new deals in Africa. Blackstone will invest in African energy projects. Coca-Cola will partner with Africa to bring clean water to its communities. GE will help build African infrastructure. Marriott will build more hotels. All told, American companies – many with our trade assistance – are announcing new deals in clean energy, aviation, banking, and construction worth more than $14 billion, spurring development across Africa and selling more goods stamped with that proud label, “Made in America.”

And I don’t want to just sustain this momentum, I want to up it. I want to up our game. So today I’m announcing a series of steps to take our trade with Africa to the next level.

First, we’re going to keep working to renew the African Growth and Opportunity Act – and enhance it. (Applause.) We still do the vast majority of our trade with just three countries – South Africa, Nigeria and Angola. It’s still heavily weighted towards the energy sector. We need more Africans, including women and small- and medium-sized businesses, getting their goods to market. And leaders in Congress – Democrats and Republicans – have said they want to move forward. So I’m optimistic we can work with Congress to renew and modernize AGOA before it expires, renew it for the long term. We need to get that done. (Applause.)

Second, as part of our “Doing Business in Africa” campaign, we’re going to do even more to help American companies compete. We’ll put even more of our teams on the ground, advocating on behalf of your companies. We’re going to send even more trade missions. Today, we’re announcing $7 billion in new financing to promote American exports to Africa. Earlier today, I signed an executive order to create a new President’s advisory council of business leaders to help make sure we’re doing everything we can to help you do business in Africa. (Applause.)

And I would be remiss if I did not add that House Republicans can help by reauthorizing the Export-Import Bank. That is the right thing to do. (Applause.) I was trying to explain to somebody that if I’ve got a Ford dealership and the Toyota dealership is providing financing to anybody who walks in the dealership and I’m not, I’m going to lose business. It’s pretty straightforward. We need to get that reauthorized. (Applause.) And you business leaders can help make clear that it is critical to U.S. business. 

Number three, we want to partner with Africa to build the infrastructure that economies need to flourish. And that starts with electricity, which most Africans still lack. That’s why last year while traveling throughout the continent, I announced a bold initiative, Power Africa, to double access to electricity in Sub-Saharan Africa and help bring electricity to more than 20 million African homes and businesses. 

Now, we’ve joined with African governments, the African Development Bank, and the private sector – and I will tell you, the response has exceeded our projections. It has been overwhelming. Already, projects and negotiations are underway that, when completed, will put us nearly 80 percent of the way toward our goal. On top of the significant resources we’ve already committed, I’m announcing that the United States will increase our pledge to $300 million a year for this effort. 

And as of today – including an additional $12 billion in new commitments being announced this week by our private sector partners and the World Bank and the government of Sweden – we’ve now mobilized a total of more than $26 billion to Power Africa just since we announced it – $26 billion. (Applause.) So today we’re raising the bar. We decided we’re meeting our goal too easily, Zuma, so we’ve got to go up. So we’re tripling our goal, aiming to bring electricity to more than 60 million African homes and businesses that can spark growth for decades to come. (Applause.)

Fourth, we’ll do more to help Africans trade with each other, because the markets with the greatest potential are often the countries right next door. And it should not be harder to export your goods to your neighbor than it is to export those goods to Los Angeles or to Amsterdam. (Applause.) So through our Trade Africa initiative, we’ll increase our investments to help our African partners build their own capacity to trade, to strengthen regional markets, make borders more efficient, modernize the customs system. We want to get African goods moving faster within Africa, as well as outside of Africa.

And finally, we’re doing more to empower the next generation of African entrepreneurs and business leaders – it’s young men and women, like our extraordinary Mandela Washington Fellows that I met with last week. And I have to say to the heads of state and government, you would have been extraordinarily proud to meet these young people who exhibit so much talent and so much energy and so much drive.

» Read the full speech here.

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