Follow Through on Africa

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President Barack Obama deserves praise for hosting the first ever U.S.-Africa Summit last week. Yet if this summit’s flurry of activities — which brought some 50 African leaders to Washington, D.C. — are to amount to genuine achievement, the United States will need to match words with deeds. Renewed American efforts to promote trade and develop infrastructure in Africa would be a good place to start.

By the numbers, greater U.S. investment in Africa makes sense. The continent boasts seven of the decade’s 10 fastest growing economies in the world, and its total gross domestic product now exceeds $2 trillion. What’s more, Africa is home to more than 1 billion people, and its population is expected to double by 2050.

While only 2 percent of U.S. exports currently go to Africa, this modest amount of trade already supports 250,000 jobs in the United States. Yet senior U.S. officials see even greater commercial potential in the continent. “As Africa’s middle class continues to expand,” Secretary of Commerce Penny Pritzker said, “we hope to see our export numbers expand, too.”

As part of long-term U.S. efforts to expand trade and commerce with Africa’s nations, two initiatives will be essential.

First, Obama and Congress urgently need to reauthorize and update the African Growth and Opportunity Act of 2000 , a bipartisan Clinton-era initiative that offers trade benefits to partner nations that implement positive reforms and policies. As the Heritage Foundation’s Brett Schaefer and colleagues wrote, “[The act] offers duty-free access to the U.S. market for a wide variety of African products from countries that are making progress toward market-based economies, democracy, the rule of law, eliminating corruption, lowering barriers to trade and investment, reducing poverty, improving health and education, and improving human rights.”

African leaders pressed Washington for a 15-year renewal of the act, which is set to expire in September 2015, at last week’s summit. A timely renewal will make it more effective — in business, product certainty and long-term planning are key to attracting customers.

As Rep. Chris Smith, R-N.J., noted, the African Growth and Opportunity Act is also in need of expansion; currently the benefits apply mostly to petroleum products and minerals. Indeed, the White House and Capitol Hill should work to modernize the law to advance a broad range of U.S. interests. As Schaefer and company argue, Washington should ensure that an updated version of the act “enhances the current economic partnership beyond a trade preference arrangement, encourages African economic integration, and sets the stage for a future free trade agreement (FTA) between the U.S. and the region.”

Second, Obama should work with Congress to fully implement Power Africa, a program to help modernize the continent’s electrical infrastructure. The initiative aims to increase access to at least 20 million homes and businesses by committing over $7 billion in financial support for investment in Africa’s energy sector.

During the summit, Obama announced that private companies pledged an additional $14 billion in energy and other infrastructure investments. Indeed, the president sees Power Africa as a key to attracting American investment in Africa. But while the House of Representatives has passed implementing legislation for Power Africa, the Senate still hasn’t.

Power Africa, if implemented, will help the estimated 590 million people in sub-Saharan Africa without access to electricity, as well as grow opportunities for business. However, Power Africa alone won’t solve Africa’s infrastructure problems. Indeed, McKinsey Global Institute projects that Africa will need $2.6 trillion in infrastructure investment — including highway, water and telecommunications — by 2030.

In a worrisome development, the president has undermined Power Africa with new emissions regulations linked to climate change. Just last year, the Obama administration announced that it would discourage construction of coal plants in foreign countries through multilateral development institutions.

Moreover, a law requiring the Overseas Private Investment Corporation, one of the implementing institutions of the Power Africa initiative, to drastically reduce greenhouse gas emissions from its projects has been on the books since 2009. As Sen. James Inhofe, R-Okla., noted, this law makes it “much more difficult for U.S. firms to help bring Africa on the grid quickly and cost-effectively.”

To spur economic growth more rapidly, President Obama should revise his strict policy on coal project financing and allow Africa to get on the grid faster. The White House also should consider ways to encourage more public and private infrastructure development beyond the electrical grid, with the aim of bridging the continent’s yawning gaps in transportation, telecommunications and other sectors.

Beyond the numbers, improving Africa’s economies can help combat the continent’s growing terrorism challenges. Terror groups have multiplied as largely unemployed youth populations in the region proliferate and weapons unsecured after the fall of former Libyan President Moammar Gadhafi flow through black markets.

U.S. efforts to grow trade and infrastructure with Africa could be critical to preventing terrorism from further metastasizing on the continent. As J. Peter Pham of the Atlantic Council’s Africa Center observed, “Poverty doesn’t make people violent, but it can drive young men who have nothing to do to look for things to do.” Indeed, increased opportunity and prosperity in Africa can help to drain the swamps of hopelessness and despair on which violent extremists feed.

From supporting American jobs to countering the causes of terrorism in Africa, increased American investment can help advance security, prosperity and, over the long term, human dignity on the continent. With the right policies, the United States can empower nations in Africa to move from being foreign aid partners to foreign trade partners. But getting those right policies in place will require Obama and Congress to do more than just lead. They’ll have to follow through.

Mission Statement

The Foreign Policy Initiative seeks to promote an active U.S. foreign policy committed to robust support for democratic allies, human rights, a strong American military equipped to meet the challenges of the 21st century, and strengthening America’s global economic competitiveness.
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