US-Africa Summit: Big opportunity or just another talk-shop?
- J Brooks Spector
- 28 Jul 2014 (South Africa)
The US-Africa Leaders Summit that may bring together as many as fifty African heads of government in Washington with Barack Obama is due to start in a few days. J. BROOKS SPECTOR takes a look forward to some of the issues and events – and what it may all mean.
Kicking off on 4 August, and running for two more days, will be the US-Africa Leaders Summit. US President Barack Obama has invited the heads of state from fifty African nations to a massive pow-wow in Washington, DC to discuss the state of America’s relationship with the continent – and to look to a way forward for strengthening these ties. A key question, of course, is whether this will just be a feel-good, look-good exercise and excuse for a big group photograph or if some real, important outcomes can flow from this get-together. Without question there are some real issues and topics up for some serious discussion, debate, and deliberation – and maybe even a decision or two that affects the fates of millions. Or not.
It is important to place this upcoming event into the bigger context of the American engagement with Africa that has been shaping up under the Obama administration since it took office. Back when Obama made his 2009 presidential trip to sub-Saharan Africa and had spoken to an audience in Ghana, he had argued that, for the future, if Africans took more responsibility for their own fates, they would find a willing partner in America, rather than just a role as a perpetual dispenser of aid or as a nation that is always parachuting in to solve the continent’s problems. It seemed he was drawing on the theme of Ralph Waldo Emerson’s famous essay, “Self-Reliance” – a 19th century transcendentalist philosophical essay that has had considerable influence on Obama throughout his political career.
In Accra, Obama had argued the new “partnership must be grounded in mutual responsibility and mutual respect… We must start from the simple premise that Africa’s future is up to Africans.” Obama added that Africa’s future would not derive from the “giants like Nkrumah and Kenyatta who will determine Africa’s future… Instead, it will be the young people brimming with talent and energy and hope who can claim the future that so many in previous generations never realised.” Obama added, “We must first recognise the fundamental truth that you have given life to in Ghana: Development depends on good governance… And that is a responsibility that can only be met by Africans.”
Even as he had made the usual, ritual pledges of additional aid, Obama had also argued “the true sign of success is not whether we are a source of perpetual aid that helps people scrape by - it’s whether we are partners in building the capacity for transformational change.” Besides stressing the importance of open governance and democratic regimes, he had also argued that trade and investment must be promoted with open markets in order to improve living standards and incomes across the continent. Finally, Obama added that inter-and intra-state conflict must be ended because they serve as “a millstone around Africa’s neck” and that “we must stand up to inhumanity in our midst. It is never justified – never justifiable to target innocents in the name of ideology.”
Some things obviously take time. Despite a well-publicised and frequently stated Obama administration turn to the East and away from Europe, it took nearly three years after his first public evocations of a new Africa policy in Accra, it took until June 2012 before the Obama White House formalised its set of ideas on Africa into a policy declaration, “A New US Strategy Toward Sub-Saharan Africa”.
As the White House explained in this policy, it “provides a proactive and forward looking vision grounded in partnership. The new strategy sets forth four strategic objectives, as described below, and commits the United States to elevate its efforts on the first two of these four pillars: strengthening democratic institutions and spurring economic growth, trade and investment.” Two years later, the upcoming US-Africa Summit can be seen as a logical outgrowth of this policy statement, along with a variety of economic, financial aid and investment meetings that have taken place in between the Ghana speech and the upcoming summit.
In response to this Obama administration effort to define a coherent American continent-wide Africa policy initiative, some more cynical critics have argued this increasingly focused initiative was simply a smokescreen for an older style of building and consolidating political influence – but just under another name. Alternatively, it was either an American grab at Africa’s abundant mineral wealth (with the government sanctioning and sheltering various business interests); that it was an attempt to secure petroleum reservoirs for America for the future; that it was a way of extending the American securitisation and militarisation of its policy efforts aimed at Africa; or, finally, it was simply a way of offsetting the growing Chinese (and perhaps Indian) influence on the continent in a new 21st century “scramble for Africa”.
Those simpler economic determinist explanations can be relatively easily dismissed, not least because American self-reliance on petroleum and other energy resources, somewhat surprisingly, is now rapidly coming on stream, or because most of the new deals for mineral resources in Africa seem to be with companies other than American ones for a wide range of reasons. Moreover, the militarisation argument largely melts down for lack of any real, sustained, substantive American boots on the ground (although modest US military resources are dealing with irregular forces in Somalia and Uganda, as well as lesser commitments for surveillance in West African air space, just as long as that earlier Libyan disaster is left out of the overall equation). And absent a new and convincing rationale for a vital national interest to be served in Africa with the use of troops, there is virtually no American appetite for anything larger than these commitments, given the increasing antipathy by most Americans for additional foreign engagements abroad that involve troops - in almost any conceivable circumstances.
That largely leaves the justification of serving as a counter-weight to growing Chinese influence and impact on the continent. To that, while the Obama administration sometimes goes through verbal gymnastics to avoid pointing a direct finger at China as a despoiler of Africa, the it is, nevertheless, clear that the administration is taking great pains to insist American businesses should be able to secure an appropriate share of Africa’s future business on level playing fields of commercial competition.
There’s nothing much wrong with that – it’s a tough competitive world out there – and US businesses have as much right to bid on contracts, to supply goods and services, and to export intellectual property to Africa as anybody else does. As a result, there have been several high-profile investment conferences on the continent in the past several years to attempt to right the balance vis-a-vis the inroads of some very aggressive efforts by China to gain a firm upper hand in the commercial sphere. But there is good reason for America to want to do play hard in that game.
As analysts and investors alike have pointed out, one trope - “Africa – the hopeless continent” – has now been effectively replaced by a new one. This is the one that says: “Africa Rising”. Six of the world’s fastest growing economies are said to be African ones, and the continent is said to be on course to be the home for half a billion middle-class consumers in a decade or two – although it can be argued that this definition of middle-class is a fairly Spartan one in many ways. Regardless, there are enormous business opportunities, ranging from new educational technology to diesel locomotives and heavy-duty power generation equipment. (This is one of the hopes from a new US initiative, Energize Africa, designed to partner US companies and Africa’s various energy authorities for new and innovative power generation projects across the continent).
Looking specifically at foreign direct investment into this new Africa, a recent Brookings Institution study looked at FDI in Africa by various major investing nations. The report explained, “Since 2000, global FDI stock in sub-Saharan Africa has increased dramatically, from over $33.5 billion to $246.4 billion in 2012. According to analysis of UNCTAD’s Bilateral FDI Statistics (2014), the EU, China, Japan and the U.S accounted for approximately 54% of the stock of FDI in the region in 2012. South-South investment was also important and included partners such as South Africa (9%), Singapore (6%), India (5%) and Mauritius (5%).
“The stock of FDI in sub-Saharan Africa from the EU, China, Japan and the U.S. grew by nearly five times between 2001 and 2012, from $27.2 billion to about $132.8 billion. This growth was primarily driven by China, whose FDI grew at an annual rate of 53%, compared with 29% for Japan, 16% for the EU and 14% for the U.S.
“Five EU member countries —France (38%), the U.K. (31%), Germany (8%), Belgium (8%)—accounted for over 80% of the EU’s share of FDI stock in the region. While the EU is considered the largest of the four partners in terms of FDI stock, when the EU is disaggregated by country, the U.S. and France were the largest sources of FDI stock for sub-Saharan Africa in 2012 at $31 billion each, followed by the U.K. with $25 billion. Yet, even though the U.S. is one of the top contributors of FDI stock to sub-Saharan Africa, less than 1% (0.7%) of the U.S.’s global FDI stock abroad is destined for the region. The U.S primarily invests its $367 billion of FDI in Europe (55%), Latin America (13%), Canada (8%), and other developed countries such as Australia, New Zealand, Israel and Japan (13% collectively). Similarly, the EU and Japan direct only 0.8 and 0.2% of their FDI, respectively, toward sub-Saharan African countries abroad. China, on the other hand, invested 3.4% of its FDI stock abroad in the region in 2012.”
As currently planned, virtually every African head of state – save for leaders from Sudan, Eritrea, Zimbabwe, the Central African Republic and Western Sahara (a territory not recognised as a separate nation by the US) have been invited - and indications are that over forty will actually attend the sessions in Washington, once the meetings begin.
The program informally starts with six US government-sponsored “Signature Events” - for what the White House calls “in-depth conversations on some of the most pressing issues facing the U.S.-Africa partnership. These sessions will set the stage for the high-level discussions that President Obama will chair during the subsequent Summit leader meetings.”
On 1 August, there will be a session entitled “Faith Works: Honouring the Contributions of the Faith Community to Peace and Prosperity in Africa”, followed by the Civil Society Forum, and sessions entitled Investing in Women, Peace, and Prosperity, Investing in Health: Investing in Africa's Future, Resilience and Food Security in a Changing Climate, and Combating Wildlife Trafficking. These sessions are not, however, designed for the actual gaggle of African heads of state descending on Washington. Rather, ministerial level and other senior level officials will attend these events.
In addition, US Trade Representative (effectively the US foreign trade minister), is scheduled to host a ministerial session on the African Growth and Opportunity Act (AGOA). Meeting at the World Bank, “African and U.S. trade officials will discuss the future of the AGOA program and U.S. plans to pursue renewal of AGOA legislation.” In addition, the Senate Foreign Relations and House Foreign Affairs Committees will host a welcome reception for African leaders on Capitol Hill that afternoon as well.
AGOA, of course, is US law that allows thousands of African products tariff-free entry to the US. Under this, South Africa has been a prime beneficiary of this unilateral determination. The law comes up for renewal, change or expiry in 2015, and the Obama administration has publicly stated its strong support for passage of a new version of the law. Accordingly, this summit could be a prime opportunity for African leaders to make their case this unilateral concession is not a one-way benefit. The argument is that AGOA means jobs and more prosperous Africans live in more stable societies; they will have bigger incomes that allow them to purchase more American-created goods and services; and that development can encourage further US investment in Africa to support that virtuous circle of economic growth yet further.
But, given the sense that the US economy is only slowly recovering its pre-financial crisis mojo, any indication African nations are resisting US exports (such as that little US chicken parts export to South Africa difficulty) may not sit so well with some members of Congress, especially as they face an election later this year. There is also some discussion that perhaps South Africa should now graduate from this duty-free status, given its economic circumstances.
Over the weekend, the South African government, in a public statement, strongly endorsed renewal of AGOA, saying, “The Africa Growth and Opportunities Act (AGOA) is a non-reciprocal preferential scheme, which applies only to US imports from eligible Sub-Saharan Africa. AGOA was signed into law in 2000 and originally intended to run until 2008, however amendments in 2004 extended the deal until 2015. African governments are strongly in favour of extending AGOA, while US President Barack Obama has offered his endorsement, saying that it represented good business for both Africa and America. Minister Davies says AGOA is the cornerstone of bilateral relations between the United States and Sub-Saharan Africa (SSA), as it provides the sole platform between the US and SSA to discuss ways and means to deepen trade and investment relations.”
Returning to the summit schedule, on 4 August, a US-Africa Business Forum, hosted by America’s Department of Commerce and Bloomberg Philanthropies will focus on how to strengthen trade and financial ties between the United States and Africa. Obama, together with Commerce Secretary Penny Pritzker and (former) Mayor Michael Bloomberg will participate in this meeting. The forum is designed to “intensify efforts to strengthen trade and financial ties between the United States and Africa and seek to create partnerships that will promote trade, accelerate job growth, and encourage investment. The Forum will focus on U.S. private sector engagement in Africa in the areas of finance and capital investment; infrastructure; power and energy; agriculture; consumer goods; and information and communication technology. African leaders will engage with business executives from both sides of the Atlantic to engage in conversations about successes and solutions to increase trade with and invest in Africa.”
Pritzker is on record as saying that as many as $900 million worth of deals between American companies and African nations are due to be announced formally during this summit.
Later that night, the inevitable glitzy White House dinner will bring every one of the visiting African leaders together the Obamas and other US leaders and celebrities over some fancy grub. Watch for Hollywood and TV stars, as well as various African American cultural, business and sports icons to put in appearances at this affair.
Then on the following day, the big boys (and a few girls) will have what the White House calls three “action-oriented sessions that will address issues of shared interest and mutual concern.” Session one is entitled “Investing in Africa’s Future”, which is scheduled “to discuss inclusive, sustainable development, economic growth, and trade and investment.
The second session is called “Peace and Regional Stability” and will be a “working lunch centred around shared concerns regarding peace and security, including a discussion of long-term solutions to regional conflicts, peacekeeping challenges, and combating transnational threats.”
The final session will be named “Governing for a Next Generation” and “will allow for a candid conversation about the greatest challenges and opportunities for Africa’s continued political and economic progress and a specific focus on governance. This session will focus on how to enhance governance in order to deliver services to citizens, attract and prepare for increased domestic and foreign direct investment, manage transnational threats, and stem the flow of illicit finance.”
Beyond these events with officials, Michelle Obama, together with former First Lady Laura Bush and the Bush Institute (an independent think tank based in Dallas, Texas) “will host a day-long spouses symposium at the Kennedy Center focused on the impact of investments in education, health, and public-private partnerships.” There will also be a Congressional Black Caucus session entitled “ ‘A Dialogue with African CEOs,’ entailing panel discussions and networking with African business and political leaders, U.S. private sector representatives, and members of Congress.”
Moreover, there will also be meetings with the Young African Leadership Initiative – YALI – a group of hundreds of young Africans invited to the US for internships and such from around the continent, as a signature African initiative by the Obama administration as part of its focus on the next generation of African leaders. Inevitably, too, various groups with an interest in or about Africa located in Washington are gearing up to do something related to the upcoming summit as well for their own individual moments in the sun – and as a way to connect with new opportunities for business, advising or analysis.
Despite all this effort in the works, some critics of the upcoming US-Africa extravaganza argue that, as it is planned now, may end up being more flash than substance. Besides doing this event at the moment when many of America’s influentials are on vacation, rather than paying close attention to international developments, the absence of any one-on-one meetings between Obama and the various visiting African leaders will be read negatively – by the more status conscious African rulers - in contrast to the assiduous courting of individual African leaders during roughly equivalent China - Africa or European – African dialogues.
Further, the engagement with NGOs – a key element in improving democratic values, transparency and open governance - will not be part of the actual leaders summit but has, rather, been consigned to subsidiary meetings at a lower level. Moreover, the lack of specific deliverables on a state-to-state level, such as high profile investment projects, will also inevitably be viewed less than favourably in comparison to Chinese engagement.
To be sure, much will actually depend on the group dynamics of the meetings, the star power of the participation in the media, and the intensity of the Obama engagement with the various African leaders – albeit in a larger group. While it is impossible to factor in just yet, there is, however, the likely unfortunate competition from such disparate international relations crises as Ukraine’s growing civil conflict or that seemingly intractable and deadly Israeli – Hamas collision in Gaza. And, of course, too, there is always the possibility of a surprise announcement or two from the White House or from among the conferees, while they are in Washington. And much, too, will depend on the successes that various African leaders’ delegations may garner in side meetings or other events they participate in around the country, once the various leaders scatter from Washington. One thing is certain, however, this leadership summit seems to constitute a roll of the dice by the Obama administration to secure some part of a game-changing foreign policy and international economic policy legacy as his administration moves into its final two years in office. DM
Photo: U.S. President Barack Obama (2L) and U.S. first lady Michelle Obama (R) welcome South African President Jacob Zuma (L) and his wife Nompumelelo Ntuli to the opening dinner for G-20 leaders at the Phipps Conservatory on September 24, 2009 in Pittsburgh, Pennsylvania. EPA/Win McNamee/POOL AFP
- Fact Sheet: The New Strategy Toward Sub-Saharan Africa, the White House
- The United States and Africa in the Obama Era: New wine in old bottles, old bottles for a new beverage – Or a new label on an old brew? by the author for the Centre for Policy Studies
- The U.S.-Africa Leaders Summit: A Focus on Foreign Direct Investment at the Brookings Institution
- Has the White House Bungled a Historic Africa Summit? From Foreign Policy
- Congress May Decide the Fate of the Historic U.S.-Africa Summit | Commentary from Roll Call
- Conversation about the U.S.-Africa Leaders Summit at the National Endowment for Democracy
- U.S.-Africa Leaders' Summit from the MaryKnoll Order
- How to Roll Out the Red Carpet for Africa from Foreign Policy
- Obama’s Africa Summit Set to See $900m+ in Deals Announced at the Wall Street Journal
- Q&A: Pritzker and Bloomberg Discuss the U.S.-Africa Business Forum at the Wall Street Journal
- Africa: What's the Game Plan for U.S.- Africa Summit? At AllAfrica.com