Top Five Reasons Why Africa Should Be a Priority for the United States

7/30/2019 Top Five Reasons Why Africa Should Be a Priority for the United States

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Top Five ReasonsWhy Africa Should Be

a Priority for theUnited States

M c 2 0 1 3

John P. BanksGeorge Ingram

Mwangi Kimenyi

Steven oker

Witney Shneidman

Yun Sun

Lesley nne Warner


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About the Brookings Africa Growth Initiative

For Arica to achieve transormative progress, policy solutions must come rom Arican sources. Te Ari-

ca Growth Initiative brings together Arican scholars to provide policymakers with high-quality research,

expertise and innovative solutions that promote Arica's economic development. Te Initiative also collab-

orates with research partners in the region to raise the Arican voice in global policy debates on Arica. Our

mission is to deliver research rom an Arican perspective that inorms sound policy, creating sustained

economic growth and development or the people o Arica.


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Top F iv e Reasons aFRica should Bea pRioRiTyFo RThe uniTed sTaTes

aFRica GRowTh iniTiaTive aT BKIGS

II I

Table of contents

Introduction: Why Africa Matters to the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Mwangi Kimenyi

Advancing Peace and Security in Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Lesley Anne Warner

China in Africa: Implications for U.S. Competition and Diplomacy . . . . . . . . . . . . . . . . . . . . . . . . 6

Yun Sun

Key Sub-Saharan Energy Trends and their Importance for the U.S. . . . . . . . . . . . . . . . . . . . . . . . 8John P. Banks

Transforming the U.S.-Africa Commercial Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Witney Schneidman

U.S. Development Assistance and Sub-Saharan Africa: Opportunities for Engagement . . . . . 14George Ingram and Steven Rocker


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1

Introdution: Why fria Matters to theUnited StatesMwangi Kimenyi, Senior Fellow and Director, Africa Growth Initiative, Brookings Institution

For over a decade now, the continent o Arica,

especially sub-Saharan Arica, has undergone a

major transormation. In 2000, Te Economist

reerred to Arica as the Hopeless Continent. Tis

nickname was based on an evaluation o the many

disadvantages that characterized the continent:

poverty and disease, cycles o conict, military anddictatorial one-party states, etc. Despite large en-

dowments o natural resources, the continents eco-

nomic perormance was dismal as a result o poor

macroeconomic management and a hostile environ-

ment or doing business.

In 2011, Te Economist reerred to Arica as the

Rising Continent and a March 2013 issue o the

magazine contained a special report reerring to A-

rica as the Hopeul Continent. Tese days, Ari-

ca is variously reerred to in positive terms such asemerging, rising and hopeul. Tis positive view o

Arica is justiedsub-Saharan Arica is the host o

some o the astest growing economies in the world.

Tis growth is not just due to rising commodity

prices but is also driven by a more vibrant private

sector supported by an improved business climate.

Tere have also been dramatic improvements in

governance and economic management. Te region

has seen major improvements in various sectors o

the economy, especially in services. Te inormation

technology revolution has become an important as-pect o the new Arica, particularly in terms o mo-

bile technologies. As a result o these developments,

Aricas middle class is now growing rapidly, and the

continent has become a major market or consum-

er goods. While sub-Saharan Arica still aces many

development challenges, it is a ar cry rom the one

described byTeEconomistin 2000. Arica is indeed

on the path to claiming the 21st century.

With the dramatic changes that have taken place

over the last decade, sub-Saharan Arica has become

increasingly important to the rest o the world. In

the past, relationships or many Arican countrieswere dominated by the ormer colonial powers. o-

day, new players have begun to engage Arica in a

big way. Notably, China and India are investing in

the continent, and increasingly Russia, Brazil, ur-

key, Iran and many others have increased their en-

gagement with Arica both diplomatically and com-

mercially. Te increased interest in Arica by these

new actors has been due to the realization that Ari-

ca has much to oer.

In many respects, the United States has been slowto seize the opportunities availed by the new Arica.

While the American private sector has begun to take

advantage o some o these opportunities, the scope

o engagement by American businesses is still small

in scale. Likewise, the U.S. governments engage-

ment has not changed much. But Arica matters to

the United States, a reality that will only grow more

important as the continents economies and gover-

nance structures continue to transorm. While it is

indeed true that Arica benets rom American en-

gagement, it is also true that the U.S. benets romArican engagement.

Te ollowing brieng papers in this collection are

meant to touch on only some o the reasons why A-

rica matters or United States as well as strategic op-

portunities or U.S. engagement in the region. Tese


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bries ocus on ve key issues: national security, Chi-

na, energy, trade and investment, and U.S. develop-

ment assistance.

In preparing these papers, the Arica Growth Ini-

tiative hopes to contribute to a better understand-

ing o Arica or U.S. government policymakers. Anappreciation o the act that engaging with Arica

benets both the United States and Arica should be

the oundation or U.S. oreign policy toward Arica.

We believe that a better understanding o the many

reasons why Arica matters to the U.S. should help

American policymakers take a more positive view o

the region in their oreign policy decision-making.

Lesley Anne Warner highlights why Arica mattersor U.S. national security. Warner asserts that the

security o Arican countries is interlinked to broad-

er global security. Tereore, proactive engagement

with Arica in securing peace and security is vital

or the mutual benet o both Arica and the United

States.

Yun Sun examines the increasing role o China in

Arica and the need or the United States to be more

engaged in the region vis--vis China. She argues

that the U.S. must take this opportunity to engagemore substantively with Arican countries in order

to mitigate some o the environmental and human

rights consequences o Chinas no strings attached

approach to Arica. Sun also highlights opportuni-

ties or joint U.S.-China collaboration in order to

advance common goals in the region.

John Banks discusses the importance o Aricasenergy needs or U.S. oreign policy. Specically,

Banks explores why helping Arican countries ex-

pand their access to energy and manage their new

oil and natural gas resources is critically important

or U.S. national security and economic interests.

Witney Schneidman discusses the importance o

Arica or U.S. trade and investment. He empha-

sizes the need to extend the Arican Growth and

Opportunity Act beyond its 2015 expiration date

and proposes some new initiatives that could helpAmerican rms invest in and do more business

across the Arican continent.

U.S. development assistance orms a major part

o U.S.-Arica relations. George Ingram and Steven

Rocker stress that U.S. development assistance to

Arica serves a number o key U.S. humanitarian,

national security and economic goals, and recom-

mend several strategies or the U.S. government to

better utilize and direct its oreign assistance to the

region.


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dvaning Peae and Seurity in friaLesley Anne Warner, Research Fellow, Center for Complex Operations, National Defense University

The pRioRiTy

In a complex and globalized security environment,

having strong and capable partners on the Arican

continent to tackle transnational challenges advanc-

es U.S. national security interests. In this regard, the

growing capabilities o Arican countries to respondto regional security challenges are an asset to the

United States. Globally, Arican nations account or

10 out o the top 20 contributors to United Nations

peacekeeping missions. Furthermore, Arican coun-

tries and the regional organizations to which they

belong are starting to play a larger role in leading

peacekeeping operations on the continent through

the Arican Union Mission in Somalia (AMISOM),

the AU-UN Hybrid Operation in Darur (UN-

AMID) and the possible Arican-led International

Support Mission in Mali (AFISMA).

Tese positive developments aside, U.S. eorts to

advance peace and security in Arica ace several

challenges. Unable to monitor, interdict and pros-

ecute predatory actors in their sovereign territo-

ries, many Arican countries ace localized security

challenges that hold the potential or global reach.

ransnational organized crime such as the illicit

arms trade and narcotracking empowers predato-

ry actors and increasingly corrupts government and

military ocials in West Arica. Piracy and armedrobbery at sea in the Gul o Guinea and o the coast

o Somalia aect local livelihoods and are detrimen-

tal to global maritime commerce. Violent extrem-

ist organizations (VEOs)such as al-Qaida in the

Islamic Maghreb, Ansar Dine, and the Movement

or Unity and Jihad in West Arica (all in northern

Mali), al-Shabaab in Somalia, and Boko Haram in

Nigeriajeopardize human security and threaten

to ignite communal violence. As demonstrated by

Ansar al-Sharias September 2012 attack on the U.S.

consulate in Benghazi, VEOs pose a threat not only

to the security o U.S. partners in the region, but also

to U.S. citizens. Intrastate conict remains a securi-ty challenge, with countries like the Central Arican

Republic, the Democratic Republic o the Congo,

Mali and Sudan presently acing new phases o un-

rozen, previously unresolved conicts. And while

Cte dIvoire, Liberia and Sierra Leone have transi-

tioned rom war to peace, similar transitions remain

ragile in Libya, Somalia and South Sudan.

whyisiT impoRTanTFoRThe u.s.?

Te peace and security o the Arican continent isincreasingly important to the United States or sev-

eral reasons. First, the security o Aricans and o

the countries in which they reside can have an im-

pact on global security and U.S. interests. Arican

governments incapable o maintaining sucient

control over their territories or o ullling the basic

needs o their populations can create a permissive

environment or criminal or terrorist networks. Sec-

ond, since the establishment o the U.S. Arica Com-

mand (AFRICOM) in 2008, the United States is

playing a greater role in Arican securityperhapsin spite o the Department o Deenses recent eorts

to rebalance toward Asia. One o the cornerstones o

U.S. military engagement in Arica entails assisting

Arican countries in the management o their own

security challenges through partner capacity build-

ing. In an era o declining deense budgets, working


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with Arican countries in addressing security chal-

lenges on the continent is an eort to prevent con-

ict and share the cost o global security. In princi-

ple, this cooperation ultimately enhances the United

States ability to ensure its own national security. Fi-

nally, rom a whole o government perspective, the

security o Arican countries can either support orundermine U.S. investment in other sectors such as

trade, good governance, health and education.

The oppoRTuniTyFoRThe u.s.

Te United States ability to advance peace and se-

curity on the continent is contingent on the conver-

gence o interests with Arican partners and their

willingness to work with the United States on mu-

tual security challenges. Accordingly, Congress and

government agencies should consider the ollowingsteps:

1. Rebalance U.S. engagement with Arican

countries so that it is more proactive than

reactive. Te United States requires a more

holistic approach to Arican securityone

that does not solely lie within the domain o

the Department o Deense. Eorts to pre-

vent and mitigate conict cut across agen-

cies and ofen address some o the root caus-

es o conict in Arica. I the United States isever to depart rom responding to one crisis

afer another in Arica, it is imperative that

Congress better resource agencies that have

prominent roles in conict prevention, such

as the State Department and USAID.

2. Establish multi-year unding authorities

or building partner capacity programs.

Moving away rom episodic engagements

with Arican countries towards sustained

security partnerships will require that theauthorities that govern security cooperation

become more exible and streamlined. Tis

move should help improve the planning o

U.S. military engagement on the continent

and work towards acilitating interagency

coordination.

3. Address the decient capabilities o A-

rican law enorcement personnel. Te

training o oreign law enorcement per-

sonnel by the United States is restricted by

Section 660, an amendment to the Foreign

Assistance Act o 1961. Yet, in terms o pro-

viding security or individuals and commu-nities in Arica, police orces are ofen the

sof underbelly o Arican security sectors.

Congress should either revisit restrictions

against U.S. engagement on police reorm

or should work with European allies to

remedy this capacity gap.

4. Continue to support regional and sub-re-

gional mechanisms or confict resolu-

tion. Although the Economic Communi-

ty o West Arican States (ECOWAS) hastaken the lead in responding to the crises

in Mali, its eorts have been impeded by

limited crisis response planning capabili-

ties, accompanied by the insucient mili-

tary readiness o several troop-contributing

nations. Tese deciencies demonstrate

several opportunities or U.S. assistance to

regional and sub-regional organizations.

5. Use ongoing insecurity in the Sahel as an

impetus to re-evaluate the scope o U.S.military engagement on the continent.

Te crisis in Mali and the diculties aced

by Arican militaries in responding demon-

strate that U.S. engagement with Arican

militaries may be necessary but insu-

cient or stability. Moving orward, the U.S.

should ensure that its engagement in Arica

bolsters non-military pillars o stability and

prioritizes deense sector reormeven i

these eorts occur at the expense o tactical

or technical military capacity-building pro-grams in the near term.


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FuRTheR ReadinG

Downie, R., & Cooke, J. G. (2011).A More Strategic US Approachto Police Reorm in Arica. Center For Strategic and Interna-tional Studies (CSIS). http://csis.org/les/publication/110414_Downie_PolicyReormArica_Web.pd.

U.S. GAO. (2010). Deense Management: Improved Planning,raining, and Interagency Collaboration Could Strengthen DODsEforts in Arica. Report GAO-10-794. Washington, DC. http://www.gao.gov/products/GAO-10-794 .

Hooper, C. W. (2012). Going arther by going together: buildingpartner capacity in Arica.Joint Force Quarterly, (67), 8., http://www.ndu.edu/press/lib/pd/jq-67/JFQ-67_8-13_Hooper.pd.

Ploch, L. (2010).Arica Command: US strategic interests and the

role o the US military in Arica. DIANE Publishing. http://www.as.org/sgp/crs/natsec/RL34003.pd.

Te White House. (2012, June). U.S. strategy toward Sub-Saha-ran Arica. Washington, D.C. http://www.whitehouse.gov/sites/

deault/les/docs/arica_strategy_2.pd.

U.S. Arica Command (2013, March 7). 2013 Posture Statement:statement o General Carter Ham beore Senate Armed ServicesCommittee. Washington, D.C. http://www.armed-services.sen-ate.gov/statemnt/2013/03%20March/Ham%2003-07-13.pd.

Warner, Lesley Anne. (2013, February 5). Capacity-build-ing key to AFRICOMs mission, World Politics Review. http://www.worldpoliticsreview.com/articles/12689/capacity-build-ing-key-to-aricoms-mission.
http://csis.org/files/publication/110414_Downie_PolicyReformAfrica_Web.pdfhttp://csis.org/files/publication/110414_Downie_PolicyReformAfrica_Web.pdfhttp://www.gao.gov/products/GAO-10-794http://www.gao.gov/products/GAO-10-794http://www.ndu.edu/press/lib/pdf/jfq-67/JFQ-67_8-13_Hooper.pdfhttp://www.ndu.edu/press/lib/pdf/jfq-67/JFQ-67_8-13_Hooper.pdfhttp://www.fas.org/sgp/crs/natsec/RL34003.pdfhttp://www.fas.org/sgp/crs/natsec/RL34003.pdfhttp://www.whitehouse.gov/sites/default/files/docs/africa_strategy_2.pdfhttp://www.whitehouse.gov/sites/default/files/docs/africa_strategy_2.pdfhttp://www.armed-services.senate.gov/statemnt/2013/03%20March/Ham%2003-07-13.pdfhttp://www.armed-services.senate.gov/statemnt/2013/03%20March/Ham%2003-07-13.pdfhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.worldpoliticsreview.com/articles/12689/capacity-building-key-to-africoms-missionhttp://www.armed-services.senate.gov/statemnt/2013/03%20March/Ham%2003-07-13.pdfhttp://www.armed-services.senate.gov/statemnt/2013/03%20March/Ham%2003-07-13.pdfhttp://www.whitehouse.gov/sites/default/files/docs/africa_strategy_2.pdfhttp://www.whitehouse.gov/sites/default/files/docs/africa_strategy_2.pdfhttp://www.fas.org/sgp/crs/natsec/RL34003.pdfhttp://www.fas.org/sgp/crs/natsec/RL34003.pdfhttp://www.ndu.edu/press/lib/pdf/jfq-67/JFQ-67_8-13_Hooper.pdfhttp://www.ndu.edu/press/lib/pdf/jfq-67/JFQ-67_8-13_Hooper.pdfhttp://www.gao.gov/products/GAO-10-794http://www.gao.gov/products/GAO-10-794http://csis.org/files/publication/110414_Downie_PolicyReformAfrica_Web.pdfhttp://csis.org/files/publication/110414_Downie_PolicyReformAfrica_Web.pdf


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china in fria: Impliations for U.S.competition and DiplomayYun Sun, Visiting Fellow, Africa Growth Initiative and John L. Thornton China Center, Brookings

Institution

The pRioRiTy

China is an increasingly important player in the pol-

itics, economic development and security o Arica.

Historically, China has prioritized strong diplomatic

relations and political ties with Arican states with

an ideological aspiration anchored on the solidarityamong the Tird World countries.1 However, since

2001, Chinas pursuit in the continent has rapidly

expanded into the economic arena, ocusing on A-

ricas rich natural resources to uel Chinas domestic

economic growth.

Chinas growing economic presence in Arica is

hardly altruistic and is guided by the principle o

mutual benets to both sides. Under the rame-

work o resources or development, Beijing mo-

bilizes its vast state nancial resources to investbroadly in inrastructure projects across Arica and

extract natural resources in return. Moreover, these

investments generate multiple layers o benets or

China, including contracts or Chinese service com-

panies, the relocation o labor-intensive, heavy-pol-

lution industries rom China, political avors ex-

tracted rom Arican governments on oreign policy

issues at multilateral orums such as the United Na-

tions, and a positive international image o China

being a responsible stakeholder. Tese motivations

are particularly true in explaining Chinas interestsin resource-poor Arican countries.

Tis strategy most likely will continue in the oresee-

able uture. In July 2012, China doubled its 2009 com-

mitment to provide $20 billion in nancing to Arica

to urther its strategic blueprint in the next three years.2

Te contemporary analysis o Chinas role in Arica

is dramatically split. Dragon-slayers emphasize Chi-

nas selsh quest or Aricas natural resources and

how it sabotages international eorts to keep unpal-

atable Arican regimes in check. On the other hand,

panda-huggers applaud Chinas contribution to A-

ricas economic development through inrastructureprojects and revenue creation. Neither reects the

nuanced, complicated nature o what China means

or Arica. China enjoys unique nancial and politi-

cal advantages in promoting Aricas growth but ne-

glects the governance, airness and sustainability o

such development. Tereore, the short-term benet

China provides to Arica is intrinsically awed and

has long-term negative consequences.

Meanwhile, along with Chinas enhanced role in A-

rica is the reality that the U.S. is being increasinglyedged out o the continent politically and econom-

ically. o compete with the Chinese presence and

to counter the negative consequences o Chinas

approach, the U.S. must become more engaged in

Arica with eective strategies. Chinas unique ap-

proach also has tremendous implications or the

U.S. role in global governance and the uture o its

Arican partners.


Chinas approach to Arica represents a undamental

challenge to U.S. interests in promoting democracy,

good governance and sustainable development in A-

rica. Chinese unding ows to Arica with no strings

attached, such as requirements on transparency,

anti-corruption, environmental protection, human


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development and better governance. Chinese play-

ers in Arica exacerbate the problems through their

active endorsement and participation in the awed

process. Tereore, Beijing oers an easy alternative

to the principled or disciplined development assis-

tance rom the West and multilateral nancial insti-

tutions, and undercuts the latters eort to addressthe systematic and institutional deciencies o Ari-

can countries and to promote long-term sustainable

development and democratic systems.

Furthermore, Chinas engagement in Arica has pro-

ound geopolitical implications or the U.S. global

strategy. As the U.S. rebalances to the Asia-Pacic

region, China has identied increasing hindrances

in its strategic advancement in East Asia and the

Pacic. In response, China is shifing its attention

westward to South Asia, the Middle East and Aricato expand arenas or its political and strategic inu-

ence. Tese areas are seen as the most promising by

Beijing given the stagnant or declining U.S. involve-

ment. Especially in Arica, China is looking beyond

the traditional pursuit o economic benets and as-

pires to increase and solidiy its strategic presence

through enhanced political, economic, diplomat-

ic and academic resources. Te ailure to perceive

and prepare or Chinas moves would be dangerous,

unwise and potentially detrimental or the United

States in the near uture.


Given Chinas involvement in Arica, there is an

even greater need or the U.S. to engage and coop-

erate with China or its own national interests and

global agenda, such as security and governance. Not

engaging China in Arica could undercut and even

nulliy U.S. objectives given Chinas approach. Co-

operation on security issues, like South Sudan, most

likely will not excite China in that China believes

the U.S. might ask Beijing to carry a disproportion-

ate share o economic and political responsibility.

Furthermore, China worries that a U.S.-China/G-2approach to Arican security issues might alienate

Chinas traditional riendship with Arican coun-

tries since China preers bilateral or multilateral ap-

proaches.

Meanwhile, there are key issues on which the U.S.

could and should ocus. Te U.S. needs to raise its

concerns and request that China adjust its invest-

ment and assistance policies toward Arica through

the Arica consultation under the U.S.-China Strate-

gic and Economic Dialogue. Te U.S. needs to bettercoordinate with China on providing aid, technology

and technical support in the elds o health care, and

medical and agricultural assistance. Furthermore,

inside Arica, the U.S. needs to mobilize its politi-

cal, diplomatic and sof power inuences to mitigate

the negative impact o the mercantilist approach o

China. Last but not least, a conscious education-

al eort should be made to help Arica achieve the

long-term vision about the consequences o Chinas

myopic development model.

endnoTes

1 Hu Jintao visit eight Arican countries and deepened riend-ship with the Arican continent, [],Xinhua News Agency, Feb 10, 2007

2 Jane Perlez, With $20 Billion Loan Pledge, China StrengthensIts ies to Arican Nations, New York imes, July 19, 2012


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Key Sub-Saharan Energy Trends and theirImportane for the U.S.

John P. Banks, Nonresident Fellow, Energy Security Initiative, Brookings Institution

The pRioRiTy

The countries o sub-Saharan Arica are conronted

with a conuence o energy challenges and oppor-

tunities directly relevant or U.S. oreign policy and

economic interests.

Te rst challenge is the lack o access to aordable,

modern orms o commercial energy. Te Interna-

tional Energy Agency (IEA) estimates that there are

590 million people in sub-Saharan Arica, mostly in

rural areas, without access to electricity, represent-

ing nearly 6 in 10 people in the region.1 In addition,

700 million people, or 70 percent o the population,

rely on traditional, non-commercial sources o en-

ergy, such as biomass, or cooking.

Second, with the exception o a ew oil-producingstates, sub-Saharan Arican countries do not have

large domestic energy resources, relying on imports

o energy or over 65 percent o total energy use.2

Te IEA recently estimated that the region spends

more on oil imports ($18 billion) than it receives

in international aid ($15.6 billion),3 with attendant

negative impacts on trade balances, debt and GDP

growth.

Tird, signicant new discoveries have prompt-

ed the IEA to anoint sub-Saharan Arica the newrontier in global oil and gas.4 Countries such as

Cameroon, Ghana, Equatorial Guinea, the Repub-

lic o the Congo, Kenya, anzania and Uganda are

emerging as potentially major new producers o oil.

Tere have also been discoveries o large oshore

natural gas resources in Mozambique and anzania,

prompting plans to develop East Arica into a ma-

jor exporter o liqueed natural gas. South Arica is

estimated to have signicant shale gas resources as

well.


Failure to expand energy access, reduce energy im-

ports, diversiy energy sources and manage new-

ound oil and gas wealth or the benet o society,

especially the poor, directly impacts U.S. interests.

Humanitarian Interests

Tere is a clear moral imperative or the U.S. to play

a leading role in expanding energy access or hun-

dreds o millions o people in the region. Helping to

lif people out o energy povertycreating digniedliving conditions and expanding economic oppor-

tunityis consistent with our democratic values.

National Security Interests

Energy poverty undermines economic develop-

ment, ueling political instability and the creation o

ailed states that can harbor our enemies and threat-

en our allies. Indeed, there is a strong correlation be-

tween political stability and electrication rates. A

joint eort o the Fund or Peace and Foreign Policymagazine, the Failed States Index indicates that 15

o worlds 20 most vulnerable states are in sub-Sa-

haran Arica, many with electrication rates below

20 percent. Among them are countries conronted

with the emergence o non-state terrorist groups or

undergoing violent civil strie such as Niger, Chad,


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Somalia and the Democratic Republic o the Con-

go. Mali, currently in the midst o battling a radical

Islamic threat, has a rural electrication rate o just

15 percent.5 Without commercial energy to support

economic growth and modernization, the pathway

to jobs and the middle class or hundreds o millions

o young people will be stymied, sowing growingdissatisaction.

Te emergence o new oil and gas producers in the

region presents potential benets or U.S. national

security interests, i this new-ound wealth is man-

aged appropriately. Oil and gas resources not only

can provide energy and revenues or local use, but

also can help stabilize oil and gas prices by diversi-

ying and enhancing available supplies or region-

al and global markets. Several countries could also

potentially become oil suppliers to the U.S., urtherdiversiying the sources o U.S. imported oil.

Economic Interests

Te energy trends described above oer trade and

investment opportunities or U.S. businesses. In the

area o expanding electricity access, there is a large

potential market or o-grid and mini-grid decen-

tralized power solutions, especially in rural sub-Sa-

haran Arica where electrication rates are well be-

low the global average. Te IEA estimates that mosto the capacity deployed in this area will be renew-

able, clean energy technologies.6 For cooking acili-

ties, there is also an opportunity to capture a market

now satised by traditional and dirtier orms o en-

ergy with advanced cook stoves based on commer-

cial energy sources. Furthermore, the emergence o

new oil and gas producers oers investment oppor-

tunities or U.S. rms in exploration, production and

related services, and inrastructure development.


Energy needs to play a more prominent role in U.S.

policy toward sub-Saharan Arica. Tis enhanced

role could be achieved by utilizing and leveraging

existing programs and institutions to incorporate

more sub-Saharan Arican countries, and expand-

ing nancial resources available to target the energy

sector. Some specic opportunities or urther en-

gagement include:

1. Operationalize a greater sub-Saharan o-cus within the Department o States new-

ly-ormed Bureau o Energy Resources,

created to address three strategic pillars o

energy strategy: energy diplomacy, energy

transormation and energy poverty.

2. Continue and expand nancial support

or energy access initiatives in sub-Saha-

ran Arica through the Overseas Private

Investment Corporation, the U.S. reasury,

USAIDs Development Credit Authorityand the Millennium Challenge Corpora-

tion, as well as through multilateral entities.

3. Promote the strengthening o institutions

and governance especially related to the

development o hydrocarbon resources,

utilizing the Department o States Energy

Governance and Capacity Initiative and

U.S. participation in the Extractive Indus-

tries ransparency Initiative.

4. Support and promote U.S. energy invest-

ment, trade and technology and knowl-

edge transer in the region with a ocus

on renewable technologies or mini-grid

and o-grid solutions, and sustainable oil

and gas development, utilizing institutions

and programs such as: (a) Global Alliance

or Clean Cookstoves; (b) Department o

States Unconventional Gas echnical En-

gagement Program; (c) U.S. rade and De-

velopment Agency; (d) U.S. Export-ImportBank; (e) the Department o Commerces

Doing Business in Arica program; and

() bilateral and regional trade and invest-

ment agreements.


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10

endnoTes

1World Energy Outlook 2012, International Energy Agency, 532

2 Data: sub-Saharan Arica, World Bank 2010

3 Fiona Harvey,Overseas aid to Arica being outweighed byhefy costs o importing oil, Te Guardian, April 1, 2012

4Oil and Gas Markets 2011, International Energy Agency, 240

5 Scaling Up Renewable Energy Program in Mali, SREP-MaliInvestment Plan, Republic o Mali, Ministry o Energy and Wa-ter, September 21, 2011

6 Special Excerpt: Energy or All: Financing Access or thePoor, World Energy Outlook 2011, International Energy Agen-cy, 2011, 26


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11

Transforming the U.S.-fria commerialelationshipWitney Schneidman, Nonresident Fellow, Africa Growth Initiative, Brookings Institution

The pRioRiTy

Tis 113th session o the U.S. Congress has an op-

portunity to transorm U.S. trade and investment

relations with Arica.

A key issue is the extension o the Arican Growthand Opportunity Act (AGOA), now set to expire in

September 2015. Te Obama administration and

key members o Congress have pledged to work or

an early extension o AGOA which, presumably,

means that the legislation would be extended within

the next 22 months. Tis extension needs to occur

or a number o reasons.

For one, the Arican market is not on the radar

screen o the American business community. In act,

the U.S. is eectively ceding the Arican marketplaceto companies rom China, India, Brazil, Russia, ur-

key, the European Union and elsewhere.

Apart rom the natural resource sector and some

recent investments by major companies such as

GE, Symbion, Wal-Mart, Microsof and Proctor &

Gamble, only 1 percent o U.S. oreign direct invest-

ment worldwide is in Arica, and hal o this is in

extractive industries.1

At the same time, U.S. exports to Arica were justover $22 billion in 2012, or about 2 percent o U.S.

exports worldwide. While the volume may be small,

these exports support more than 100,000 jobs in the

United States.2 Not only is this trade transorming

the U.S.-Arican commercial relationship into a

more genuine partnership, it raises the immediate

question o how to accelerate U.S. trade and invest-

ment with Arica so that more American workers

and companies derive a direct benet.

As Senator Chris Coons writes in the preace to his

March 7, 2013 report, Embracing Aricas Econom-

ic Potential, Engagement with Arica is critical toAmericas economic interests in the years ahead.

Meeting Aricas growing demand with American

goods and services will strengthen our economy, help

U.S. businesses grow and create jobs here at home.


Te U.S.s lack o attention to Aricas commercial

opportunity comes at a time when the region is

poised or an economic takeo. Six o the worlds 10

astest growing economies (according to data romthe International Monetary Fund or 2001-2010) are

in sub-Saharan Arica, and a middle class o nearly

350 million individuals, rivaling that o China and

India, has emerged across the continent.3 More-

over, according to the McKinsey Global Institute, by

2020 Aricas consumersin areas such as nancial

services, tourism, telecommunications and retail

are projected to contribute more than ve times as

much revenue to the regions economic growth as

the natural resource sector.

A key element o Aricas economic growth has been

an improvement in governance. While leaders in

some countries continue to remain in oce too long,

and Freedom House has ound that the percentage

o partly ree countries in sub-Saharan Arica has

grown rom 43 percent to only 47 percent between


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12

2002 and 2012, the increased requency o elections

has led to an expansion o democracy across the con-

tinent. In addition, the emergence o civil society, so-

cial media and, in many countries, a robust press has

contributed to greater accountability o government

ocials at the national, state and local levels.


In extending AGOA, thereore, Congress needs to

make it more balanced so that the U.S. is doing as

much to support the expansion o American trade

and investment on the rapidly changing continent

as it does to support Arican exports to the U.S.

From the perspective o the 40 Arican AGOA ben-

eciary countries, the extension o the legislation

represents a critical opportunity to strengthen anddeepen their commercial relationship with the U.S.

o achieve that objective, several critical questions

need to be addressed: Why have only an estimated

300 o the eligible 6,400 product lines been utilized;

why have only a small group o countries benetted

rom the export o apparel and manuactured prod-

ucts; and what other products should be added to

make AGOA more relevant to Arican producers

and manuacturers?

Tere are other issues. Rosa Whitaker, ormer assis-

tant U.S. trade representative or Arica, estimates

that AGOA has created 300,000 new jobs in bene-

ciary countries.4 How can this number be increased?

AGOA was never intended to be permanent, so how

ar past 2015 should the legislation be extended:

ve years, 10 years, longer? And is it time to grad-

uate certain countries, such as South Arica, or can

AGOA be a stepping stone to a more mature trading

relationship, as it was intended to be?

Te AGOA Forum that is tentatively scheduled to be

held in Ethiopia at the end o May 2013 provides an

important opportunity or the U.S. and Arican na-

tions to exchange recommendations on how AGOA

can be strengthened.

AGOA continues to be the cornerstone o the

U.S.-Arican commercial relationship but it must do

more to help U.S. companies win market share on

the continent. As Congress begins deliberations on

how to strengthen AGOA, here is one suggestion:

Since its inception, USAID has played a critical rolein providing resources or trade capacity building,

including the $200 million Arican Global Compet-

itiveness Initiative, rom 2006-2011, and, more re-

cently, the Arican Competitiveness and rade Ex-

pansion Initiative. Tis support is vital to the trade

hubs in Ghana, Botswana and Kenya, and the satel-

lite oce in Dakar, and it has been critical in assist-

ing Arican businesses exporting to the U.S. under

AGOA.

Te problem is that the U.S. government providesvirtually no support or American businesses seek-

ing to trade or invest in Arica.

Te Foreign Commercial Service o the Commerce

Department, which should be playing a lead role,

has been reduced to a skeletal presence in Arica

and has ocers only in Kenya, Nigeria and South

Arica (the Pentagon now has U.S. troops in ve A-

rican countries: Djibouti, Seychelles, Ethiopia, Ken-

ya and Niger). Increasingly, U.S. embassies are play-

ing a more active role, and one o Hillary Clintonsmost important legacies as secretary o state was to

integrate commercial statecraf into core U.S. diplo-

matic responsibilities.

Given the size, complexities and dierences among

the many markets on the continent, the U.S. govern-

ment has to do a better job supporting American

companies in Arica, a market with which they have

little experience. China has an estimated 155 com-

mercial attachs in the region, or more than three

per country in sub-Saharan Arica. Other countriessuch as Brazil, India, Russia and urkey have dra-

matically increased their commercial presence on

the continent as well.5

o address the situation, Congress should encour-

age USAID to restructure trade hubs as U.S. trade


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13

and investment centers that would work as closely

with American companies coming into the Arican

market as they do supporting Arican companies

exporting to the U.S. under AGOA. Te trade and

investment centers should utilize oreign service

nationals throughout sub-regions to keep U.S. com-

panies inormed o market developments, amongother services. Te cost to sta these centers to work

with U.S. companies would be minimal, and com-

panies could pay or services. A restructuring o the

trade hubs would signicantly enhance the ability o

American companies to win market share through-

out the continent.

Tere are other critical issues to consider, such as

local content requirements, regional integration and

tax incentives or U.S. companies to invest in Aricas

productive sectors. A good place to start, however,would be to help American businesses understand

the complexitiesand opportunitieso the Ari-

can market. As Senator Coons writes, Now is the

time to invest in economic engagement with Arica.

endnoTes

1 Vivian C. Jones and Brock Williams, U.S. rade and Invest-ment Relations with sub-Saharan Arica and the AricanGrowth and Opportunity Act, Congressional Research Ser-vice Report RL31772, November 14, 2012

2

U.S. Export Fact Sheet, U.S. Department o Commerce, In-ternational rade Administration, May 2011 Export StatisticsReleased July 12, 2011

3 Ncube, Mthuli, C. L. Luumpa, and D. Vencatachellum. TeMiddle o the Pyramid: Dynamics o the Middle Class in Ari-ca.Arican Development Bank, unis, 2011

4 Witney Schneidman and Zenia A. Lewis, Te Arican Growthand Opportunity Act: Looking Back, Looking Forward,Brookings Institution, June 2012

5 Mwangi S. Kimenyi, Economic Statecraf: Increasing Amer-ican Jobs through Greater U.S.-Arica rade and Investment,estimony, U.S. Senate Committee on Foreign Relations, July

25, 2011


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14

U.S. Development ssistane and Sub-Saharanfria: pportunities for EngagementGeorge Ingram, Senior Fellow, Development Assistance and Governance Initiative, Brookings

Institution

Steven Rocker, Project Coordinator, Development Assistance and Governance Initiative, Brook-ings Institution

The pRioRiTy

otal bilateral U.S. development assistance rom the

U.S. Agency or International Development (US-

AID) and the State Department to sub-Saharan A-

rica nearly quadrupled rom roughly $1.94 billion

in FY2002 to an estimated $7.08 billion in FY2012.1Te rapid uptick in U.S. development assistance

to the region was largely driven by global health

spending, specically the Presidents Emergency

Plan or AIDS Relie (PEPFAR), which concentrates

HIV/AIDS resources primarily to 14 countries, 12

o which are in sub-Saharan Arica.2

Currently, USAID operates 27 bilateral and regional

missions in sub-Saharan Arica, which in FY2012

provided bilateral assistance to 47 sub-Saharan Ari-

can countries. Te Arica regions top ve recipientso U.S. assistance in FY2012 were Kenya, Nigeria,

Ethiopia, anzania and South Arica.3

Beyond global health, the U.S. is the leading donor

o humanitarian aid to sub-Saharan Arica, particu-

larly in the area o emergency ood aid.4 Te Obama

administration has also made assistance to agri-

culture sector development a key priority in recent

years through its Feed the Future program, a global

hunger and ood security initiative.

In June 2012, President Obama signaled his devel-

opment priorities toward the region with the release

o the White Houses U.S. Strategy toward Sub-Saha-

ran Arica. Economic growth, ood security, public

health, women and youth, humanitarian response

and climate change are explicitly listed in the Obama

Strategy as U.S. priority areas to urther accelerate

development progress in the region.


U.S. development assistance unds programs on the

ground in ways that bring government agencies andAmerican organizations and businesses into collab-

orative activities with Aricans who are trying to lif

their countries onto a higher plane o social, politi-

cal and economic development. Te region warrants

sustained U.S. engagement or a range o humani-

tarian, national security and economic reasons.

Humanitarian interests

As a clear sign o Americas moral leadership around

the globe, the U.S. has historically been and remainsthe leading donor o humanitarian assistance to the

region. In response to the Horn o Arica drought

and subsequent amine in the summer o 2011, or

example, U.S. emergency ood aid programs provid-

ed $740 million to Ethiopia, Kenya, Somalia, South

Sudan and Sudan (according to the U.S. State De-

partment). It is ully consistent with American val-

ues to continue to respond vigorously and generous-

ly to emergencies in the region.

National security interests

Continued terrorist activities in Somalia, the recent

insurgency in Mali, and the potential threat o Boko

Haram on Nigeriathe U.S.s largest trading partner

in sub-Saharan Arica5emphasizes that the U.S. has

important national security interests in the region.


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15

Development assistance rom the State Department

addresses U.S. national security concerns by und-

ing counterterrorism partnerships between the U.S.

and Arican militaries as well as training or Arican

soldiers to conduct peacekeeping missions in coun-

tries like Sudan, Somalia, the Democratic Republic

o the Congo and Liberia.

Economic interests

Sub-Saharan Arica is a region o great economic

promise. From 2001-2010, six o the astest grow-

ing economies in the world were in the region.6 In

act in 2011, oreign direct investment to sub-Sa-

haran Arica amounted to more than global bilat-

eral ocial development assistance in 2011.7 Oth-

er countries, including China, are recognizing and

acting on the increasing commercial opportunitiesin sub-Saharan Arica. A recent GAO report ound

that Chinas total trade in goods over the past decade

increased aster than and surpassed U.S. trade in the

region in 2009.8

whaTisThe oppoRTuniTyFoRThe u.s.?

1. Sustainable health systems: Te vast ma-

jority o U.S. global health assistance to

sub-Saharan Arica is used to nance the

delivery o health services, which is notsustainable in the long term. Greater ocus

needs to be directed to building sustainable

health systems so Arican countries can in-

creasingly meet their own needs.

2. Disaster preparedness and resilience: Te

U.S. is the leading donor o ocial human-

itarian aid to sub-Saharan Arica. Howev-

er, very little assistance is allocated toward

disaster prevention and preparedness.9 By

ocusing more resources and expertise to-

ward these areas, the U.S. could contribute

in the long term to achieving a reduction in

loss o lie and the need or large interna-

tional responses to disasters.10

3. Economic growth: Te U.S. should leverage

its assistance and other policies to stimulate

economic growth in sub-Saharan Arica.

Members o Congress and U.S. government

ocials should engage the Export-Import

Bank, Department o Commerce, Overseas

Private Investment Corporation, U.S. rade

and Development Agency and the U.S.

rade Representative to ensure that the U.S.

is providing a range o government policies

and programs to encourage equitable eco-nomic growth and commercial opportuni-

ties or U.S. businesses in the region.

4. Democratization and good governance:

Te U.S. needs to devote greater atten-

tion and support toward governance in

sub-Saharan Arica, including improving

governmental collection o revenues and

transparent budgeting as well as building

the capacities o civil society and legislative

bodies. In FY2011 and FY2012, U.S. globalhealth requests or sub-Saharan Arica av-

eraged $4.82 billion per year while unding

requests or rule o law and human rights,

good governance, political competition and

consensus-building and civil society under

the USAID-managed Development Assis-

tance account averaged only $75.73 million

over the same period.11


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16

endnoTes

1 Alexis Arie et al, U.S. Foreign Assistance to Sub-SaharanArica: Te FY2012 Request, Congressional Research ServiceReport R41840, May 20, 2011, 5

2 Sessions, Myra, Overview o the Presidents Emergency Plan

or AIDS Relie (PEPFAR) Center or Global Development

3 Congressional Budget Justication, Foreign Assistance Sum-mary ables, FY2013,15 http://www.state.gov/documents/or-ganization/185016.pd.

4 ed Dagne, Arica: U.S. Foreign Assistance Issues, Congres-sional Research Service Report RL33591

5 Arica, Oce o the United States rade Representative.http://www.ustr.gov/countries-regions/arica

6 Daily chart: Aricas impressive growth, Te Economist,

January 6, 2011. http://www.economist.com/blogs/daily-chart/2011/01/daily_chart.

7World Investment Report 2012: oward a New Generation oInvestment Policies, United Nations Conerence on rade andDevelopment, Geneva: United Nations, 2012; see also Devel-opment: Aid to developing countries alls because o global reces-sion, Organization o Economic Co-operation and Develop-ment, April 4, 2012

8 Government Accountability Oce. Sub-Saharan Arica:rends in U.S. and Chinese Economic Engagement February2013

9 Global Humanitarian Assistance. United States - CountryProle. Global Humanitarian Assistance.http://www.global-humanitarianassistance.org/countryprole/united-states.

10USAID Policy Framework 2011-2015. Washington: U.S.Agency or International Development, 2011.

11 FY2013 Congressional Budget Justication Foreign Opera-

tions Regional Perspectives Annex, 3-4
http://www.state.gov/documents/organization/185016.pdfhttp://www.state.gov/documents/organization/185016.pdfhttp://www.ustr.gov/countries-regions/africahttp://www.economist.com/blogs/dailychart/2011/01/daily_charthttp://www.economist.com/blogs/dailychart/2011/01/daily_charthttp://www.globalhumanitarianassistance.org/countryprofile/united-stateshttp://www.globalhumanitarianassistance.org/countryprofile/united-stateshttp://www.globalhumanitarianassistance.org/countryprofile/united-stateshttp://www.globalhumanitarianassistance.org/countryprofile/united-stateshttp://www.economist.com/blogs/dailychart/2011/01/daily_charthttp://www.economist.com/blogs/dailychart/2011/01/daily_charthttp://www.ustr.gov/countries-regions/africahttp://www.state.gov/documents/organization/185016.pdfhttp://www.state.gov/documents/organization/185016.pdf


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