Agoa’s 10th anniversary

Ambassador Ron Kirk spoke at the opening ceremony of the Ninth U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum last week, better known as “the AGOA Forum.” In attendance werecabinet ministers and senior officials from the 38 sub-Saharan African countries that benefit from the African Growth and Opportunity (AGOA) trade preference program, as well as representatives of African regional economic communities, the American and African private sector, and civil society.

During his remarks, Ambassador Kirk observed that AGOA has helped support African economic development by opening the U.S. market to a greater diversity of African products, including value-added and processed goods.“President Obama and this Administration are committed to a partnership with Africa that is commensurate with Africa’s vital and growing role in the global community, and that reflects past, present, and future ties between African nations and the United States,” said Ambassador Kirk. “The progress and potential of African economies are reflected in reduced inflation, lowered trade barriers, growing intra-African trade, rising foreign capital flows into Africa, and the creation of substantial new business opportunities.”

Enacted into law in 2000, AGOA is the U.S. government’s trade preference program for Africa.

Ambassador Kirk said trade between the United States and Africa has more than doubled during the first decade of AGOA.

“I think AGOA has been a success by any measure. Two-way trade between the U.S. and Africa usually ranges between $64 and $70 billion a year. Exports from Africa to the United States have, in some cases, quadrupled, and our U.S. exports to Africa have doubled,” Kirk said.

While AGOA over the last 10 years has led to increased trade between Africa and the United States, it has yet to achieve its full potential.

US officials have been frank in some of the shortcomings of AGOA.

US officials were frank about its failures. Hillary Clinton, secretary of state, told delegates: “We all know, despite the best of intentions, Agoa has achieved only modest results and has not lived up to the highest hopes of a decade ago . . . Petroleum products still account for the vast majority of exports to the United States and we have not seen the diversification or growth of exports that Agoa was supposed to spur.

Making clothing is often the first step on the road to prosperity for developing countries. But while African textile and garment exports to the US under Agoa rose by 52 per cent by 2009, according to a report by the US government accountability office, they were still barely more than 1 per cent of total US imports. An initial burst of exports was not sustained, and was concentrated in a small number of countries including the middle-income nations. Part of the reason is the breadth and depth of the agreement, shaped by political pressures in Washington. Economists say even a more generous programme would have struggled to overcome the real constraints to African exports, which are more to do with infrastructure and other supply-side problems on the east side of the Atlantic than trade barriers on the west. In the case of Agoa, the US Congressional Black Caucus pressed hard to focus the scheme on the continent. But the US clothing and textile industry lobbied to circumscribe the garment provisions to shield itself from competition.

The “rules of origin” – which determine how many inputs from other countries African nations can use to make exports to the US – are generous compared with other trade preference schemes, such as those for the European Union. But US clothing manufacturers insisted on more stringent rules for garments. The rules require special congressional renewal in 2012, three years earlier than the rest of the programme. Such political uncertainty restricts investment in garment production in Africa.

More generally, development experts say the scheme also shows the limits of what can be done with trade policy. Todd Moss, a fellow at the Center for Global Development in Washington, says: “Market access to the US was originally seen as the big problem. But what became clear was that lack of infrastructure at the African end was far more important.”

In many African countries production costs are raised by expensive and intermittent power supply, weak transport infrastructure and corruption. African garment manufacturers struggle to compete against powerhouses such as China.

Ron Kirk, US trade representative, says: “We have textiles that flood in to the US from all our preference programmes. I don’t know if the answer to Africa’s long-term growth is yet more textiles.”

Secretary of State Clinton was in attendance also. She delivered some remarks.

Secretary Clinton said, “I must say that my trip across Africa last summer offered me an opportunity to meet with leaders and citizens from all walks of life. And for me, that visit was a really important turning point, because coming as it did on the heels of President Obama’s very important speech in Ghana, it was a reaffirmation of this Administration’s commitment to appreciate Africa even more fully in its promise and its potential for the future.”

She continued, “Under President Obama’s leadership, the United States is taking a new approach in Africa rooted in partnership, not patronage. That means we are looking for sustainable strategies that help nations build capacity and take responsibility, that give people the tools they need to help themselves and their communities, that empower problem-solvers at the local and regional levels, be they entrepreneurs, NGOs, or governments themselves. We are also working to integrate our trade and development strategies with greater emphasis on bottom-up, locally driven solutions, fostering regional markets within Africa, boosting trade and aid effectiveness, and working with partner governments to promote structural reforms and gradual market liberalization.”

Secretary Clinton also spoke to the challenges confronting Africa. The Secretary said, “AGOA was founded on the premise that export-driven growth would provide Africa with sustainable economic development and wider prosperity. Today, we still believe in the value of exports, but we better understand that the development of domestic and regional markets is a necessary prerequisite to taking full advantage of global opportunities. Many of Africa’s major challenges — from inadequate infrastructure to political instability to corruption — also present opportunities for market-based solutions, creative partnerships, and responsible government action.”

In closing, Secretary Clinton said, “Everyone understands that opportunity and responsibility go hand-in-hand. That tomorrow’s future depends upon today’s choices. The United States can and will be a partner. We’re here for the good times and the bad. We want to work toward the day when every child born in Africa has the opportunity to live up to his or her God-given potential. That is our goal and that is our pledge.”

Her full remarks can be seen here.

Although Agoa hasn’t lived up to its full potential, none the less it still has been good for Africa.

Agoa has helped to encourage the diversification of Africa’s trade with the United States. What has happened under AGOA is we have a number of stories in terms of the increase in non-oil trade. That has doubled in the 10 years of AGOA. And, in the meantime, U.S. exports to Africa have also grown.

It  has created more than 300,000 jobs in Africa and also brings in about $300 billion in export earnings and nearly $30 billion in non-oil exports to Africa at a minimal cost to United State (US) taxpayers.

This will only go up, increase trade and economic opportunity for both the US and African nations, especially with the renewed interest and understanding of the Obama administration, which has doubling US exports as one President’s main goals.

Secretary Clinton meets with Nigerian Foreign Minister

Secretary of State Hillary Rodham Clinton met with Nigerian Foreign Minister Henry Odein Ajumogobia in the Treaty Room at the Department of State in Washington, D.C., on August 5, 2010.  Here are some of her remarks.

Nigeria is a key strategic partner, not only in Africa but globally. It is Africa’s most populous nation, its largest democracy, a significant contributor to peacekeeping efforts across the continent, a crucial partner for economic growth, trade and direct investment with the United States. About one million Nigerians live, study, and work in the United States, providing important people-to-people connections. So today I want to reaffirm how much we value our relationship with Nigeria and how much we both, I believe, can benefit from closer cooperation.

“When I visited Nigeria last year, I saw firsthand the strength and determination of the Nigerian people, their absolute commitment to achieving a stable and democratic future even amidst a lot of challenges. We were saddened by the illness and passing of their president earlier this year, but encouraged by the timely and peaceful succession of President Jonathan. The Nigerian people deserve a responsible government that rejects corruption, enforces the rule of law, respects human rights, and works on behalf of the betterment of the Nigerian people. That is the driving principle behind the U.S.-Nigerian Binational Commission. We are focusing on four critical areas: good governance and transparency, energy reform and investment, regional security and the Niger Delta, and food security and agriculture.”

In closing, the Secretary said, “[W]e are making a lot of progress together, and we’ll continue to work with Nigeria. Nigeria will be celebrating 50 years of independence October 1st. And we applaud the Nigerian people for all that you have accomplished during the past 50 years. We want to work with you to build on the success so that it becomes even more of a success story.”

Full transcript here.

President Obama hosts forum with young African leaders

Last week was a remarkable week. Known as “Africa week”,  three major Africa-related programs were held: The President’s Forum with Young African Leaders, the Africa Growth and Opportunity Act Forum, and the African Women’s Entrepreneurship Program.

I will first cover the President’s forum.  It was a town hall style event with 115 young leaders from across Africa.  The president addressed the questions and concerns of young people from across the continent.

President Obama spent an hour talking with some of the young leaders of African civil society, in an unprecedented forum in the East Room of the White House.

He called Africa “the youngest continent,” and said that because a large percentage of Africans are under 30-years-old, his administration especially needs to reach the continent’s young people.

“If all you are doing is talking to old men like me, then you are not reaching the people who are going to be providing the energy, the new initiatives, the new ideas,” said President Obama. “And so we thought that it would be very important for us to bring the next generation of leaders together.”

The talks come as civil society and private sector leaders from more than 40 sub-Saharan countries had three days of talks in Washington, with 17 of these countries celebrating 50 years of independence in 2010.

Michelle Gavin, the senior director of African affairs at the US National Security Council, said the meetings are in keeping with the spirit of Obama’s remarks when he visited Ghana, west Africa last year.

“We’re partners, but we’re not the drivers,” Gavin told reporters at the State Department, recalling Obama said the future of Africa is up to Africans themselves.

“And the real drivers are African youth. It’s the lion’s share of the society. And they’re going to determine what the next 50 years will bring,” Gavin said.

The president encouraged the young leaders to stand up for democracy.

“If you are part of an organization where you have professed democracy, but women do not have an equal voice in your organization, then you are a hypocrite,” said Mr. Obama.

President Obama addressed questions about Africa’s most troubled countries – Zimbabwe and Somalia.
Sidney Chisi, who founded the Youth Initiative for Democracy in Zimbabwe, raised a concern about abuses committed by his country’s president.

“Robert Mugabe is still using the rhetoric of sanctions, racism, property rights abuse and human rights abuse, in violation of the rule of law,” said Sidney Chisi.  Mr. Obama said he is “heartbroken” by the situation in Zimbabwe – a country, he said, that should be the “breadbasket of Africa.”

“I think Mugabe is an example of a leader who came in as a liberation fighter, and – I am just going to be very blunt – I do not see him serving his people well,” said President Obama.  The president said he would like to increase diplomatic and economic ties with Zimbabwe.  But he said he fears that doing so would entrench Mr. Mugabe’s rule.

The leader of the Somali Youth Leadership Forum, Abdi Najma Ahmed, then asked whether Americans are prepared to give financial and moral support to those working for democracy in Somalia.

“And being part of the diaspora that went back to risk our lives in order to make Somalia a better place – especially with what we are going through right now – how much support do we expect from the U.S.,” asked Abdi Najma Ahmed.
Mr. Obama responded by saying that Americans and the U.S. government desperately want Somalia to succeed.

“I think you will have enormous support from the people of the United States when it comes to trying to create a structure and framework in Somalia that works for the Somali people,” said Mr. Obama.  He said American and Somali interests intersect, which he also said is true of other African nations.

Shamima Muslim, who hosts a radio program in Ghana, said her listeners sometimes question the U.S. commitment to its relationships in Africa.  “Is America committed to ensuring a partnership that might not necessarily be beneficial to America, but [is] truly beneficial to the sovereign interests of the countries that we represent,” asked Shamima Muslim.

Mr. Obama replied that the interests of the United States and Africa often overlap, and that America has a huge interest in seeing development across Africa.

“We are a more mature economy and Africa is a young and growing economy,” he said. “And if you can buy more iPods and buy more products and buy more services and buy more tractors from us, that we can sell to a fast-growing continent, that creates jobs here in the United States of America.”

The president also took questions from young leaders from Mali, Liberia, Mozambique and Malawi.

He said that while corruption is still widespread in some African countries, the continent is on the move, thanks to its inspiring young people.

In his speech in Accra, Ghana, last year, Obama told African audiences of the need to advance entrepreneurship, education and the use of technology to help integrate Africa more fully into the global economy. Africa’s share of world trade is less than 2 percent, and Africa’s tremendous wealth in natural resources has not translated into greater prosperity for its people.

The Obama administration is dedicating significant resources to address some of these challenges. The $3.5 billion food-security initiative called Feed the Future helps 12 African-focus countries in modernizing their farm sectors. And the United States is working with African partners to maximize economic development and trade through the African Growth and Opportunity Act (AGOA), which is holding its annual meeting at the same time as the young leaders’ forum.

“These steps are about more than growth numbers on a balance sheet. They’re about whether a young person with an education can get a job that supports a family; a farmer can transfer their goods to market; an entrepreneur with a good idea can start a business,” Obama said. “It’s about the dignity of work; it’s about the opportunity that must exist for Africans in the 21st century.”

The United States has helped foster Africa’s trading capacity through AGOA. U.S. imports and exports from the 38 AGOA-eligible nations totaled $104.52 billion in 2008, a 28 percent increase from the previous year. Complete trade figures for 2009 are being compiled, but give an indication of another good year, according to the U.S. Commerce Department.

But Obama also said in Accra that the future of Africa is up to Africans. “The U.S. government’s role in [the young leaders’ forum] is as a convener, encouraging networks between young American and African leaders, and pursuing lasting partnerships on behalf of our common security and prosperity,” the White House said. “This dialogue and follow-up events in Africa will help the U.S. government better assess how to support Africa’s own aspirations going forward.”

In Ghana, Obama told Africans that “in the 21st century, capable, reliable and transparent institutions are the key to success — strong parliaments; honest police forces; independent judges; an independent press; a vibrant private sector; a civil society. Those are the things that give life to democracy, because that is what matters in people’s everyday lives.”

This year 17 nations across sub-Saharan Africa are celebrating 50 years of independence. Since the early 1990s, democracy has made significant strides. Democratic elections have been held recently in South Africa, Botswana, Namibia, Mauritius and Ghana, which illustrates the importance that Africans have placed on democracy and democratic values, the White House said.

The young African leaders also met with US Secretary of State Hillary Clinton, other government officials and civil society leaders.  This is what Secretary Clinton said about the importance of Africa.

I see Africa as a continent brimming with potential, a place that has so much just waiting to be grasped. Sixty percent of the population of Africa is under the age of 25. And that means that there’s a lot of work to be done to make sure that those young people are educated, are healthy, are motivated, are given the tools of opportunity. But it also means that Africa has not just the potential, but the promise of becoming a leader in innovation, in design, in creativity of all that you, your families, communities, and countries can become.”

The Secretary continued, “Across Africa, more citizens believe they now have the power and the duty to shape their own lives, to help their communities, to hold their governments accountable. So for all of the challenges, which we hear much about, I want to focus on these gains, because it is through this positive progress that we can motivate and incentivize even more to take place. And ultimately, it is up to you. The President and I very much believe in Africa’s promise and we can do what’s possible from afar to assist and to be front-row cheerleaders, if you will. But ultimately, it is up to you, and to citizens like you to make sure that we sustain and deepen the progress.“

This event comes at a time when Africa has seen its relationship enhanced both strategically and economically by Washington.

“We feel when you look at the continent of Africa and the strategic significance on a go-forward basis, in terms of resources and frankly from trade and other relationships, we see this as a great opportunity to reach out to young leaders from across the continent,” McHale told reporters.

I think it is a great opportunity where African Young leader would be inspired with the sublime democracy spirit from Washington that African needs to build their future to the coming generations, to defeat diseases, to fight terror & conflicts and wars a great move toward peace building eradicating Disease such as HIV/AIDS, Malira , USA always stands with other nations. The White House & the Department of State are playing a great role in bringing nations together into a great Human Harmony.

Here is video of the event.

Ghana to Host Joint Military Exercise Africa Endeavor

Ghana and the US Military through Africa Command will host the largest military communications interoperability and information sharing exercise in Africa from August 9-20, 2010 in Accra, Ghana.

In cooperation with the Armed Forces of Ghana and the support of the African Union (AU), U.S. Africa Command (AFRICOM) is sponsoring the largest military communications interoperability and information sharing exercise in Africa from August 9-20, 2010 in Accra, Ghana.

Africa Endeavor (AE) 2010 will bring together 36 African nations, two European partners, the AU, AU regional economic communities and the United States to plan and execute interoperability testing of command, control, communications and information systems of participating nations, as well as information exchange in support of future combined humanitarian, peacekeeping and anti-terrorism operations.

“AE 2010 encourages interoperability and information exchange among African nations via communications networks and subsequent collaborative links with the U.S., the AU, and African partners with common stability, security and sustainment goals, and objectives,” stated Army Brigadier General Robert Ferrell, director of Command, Control, Communications, and Computers Systems, U.S. Africa Command.

AE 2010 will be a culmination of the planning and hard work conducted during planning conferences throughout the past year. The AE Initial Planning Conference was held in Kampala, Uganda in January 2010; Mid-Planning Conference in Accra, Ghana in April 2010; and Final Planning Conference in Kigali, Rwanda in June 2010.

“Representatives from more than 30 nations have come together over the last several months to finalize the AE 2010 exercise agenda, testing schedule, technical details, and objectives,” said Ferrell. “This comprehensive and deliberate analysis among leaders, planners, and of course, the expert technicians from throughout Africa is a perfect demonstration of cooperation among nations that will lead to not just improved communication, but will set the stage for interoperability that will yield results long after exercise completion.”

AE 2010 is a key element of U.S. military’s theater security cooperation strategy, specifically in regional security. It further achieves the command’s goals of assuring military communications interoperability and facilitating information exchange across border and cultural barriers to meet peace and stability objectives.

Future operations in the African theater will involve the combined multinational militaries of several different nations. The interoperability of communications and computer systems between African nations will be critical to successful African peacekeeping operations and provide regional stability in the greater security efforts on the continent. In addition, AE 2010 will strengthen Africa to address transnational threats and will bolster military cooperation between the U.S. and African nations and regional organizations.

The first AE was held in Pretoria, South Africa in 2006. Subsequent exercises took place in Abuja, Nigeria in 2008 and in Libreville, Gabon in 2009.

Clash of the titans: Open source software vs. Microsoft. The battle for Africa

I have covered the growing technology and software sector in Africa and what companies are making moves to beat the competition.  Ranging from Google, Apple and Microsoft. Came across a past article that Dr. Diarra, the chairman of Microsoft in Africa was interviewed by the BBC.  Lets look at the article.

Microsoft has defended itself against criticism over aggressive marketing techniques in Africa to win people over to its software.

“Despite the wealth of information that gets around, it’s sad that sometimes reality has a hard time catching up with perception,” said Dr Cheikh Modibo Diarra, chairman of Microsoft in Africa.

“I think that that perception comes from the fact that we are very successful because wherever we are, we are competing respectfully and openly; you can verify that everywhere,” he told the BBC World Service’s Digital Planet programme.

For Dr Diarra, one problem alone defines Africa’s situation.

“Technology wise, African needs can be summarised in one word: access,” he said.

“When you talk about access, you talk about affordability of hardware, software and connectivity, which is 50 to 100 times more expensive in Africa than in the US,” said Dr Diarra.

Too aggressive

Microsoft is on its way to becoming a dominant brand in Africa, mainly through the deals made with various governments.

“We are very conscious of the environment in which we do business, where our employees and customers live, we always try to empower those communities,” said Dr Diarra.

One of the quotes by Diarra is memorable:

“Africa is really the last frontier in not only developing technology that is specific to people’s needs, but eventually even developing new business models that will enable the emergence of local software industries, such as young people who have the skills to be able to write their own applications for their own community,” he said.

I agree with the first part of that statement, it’s the second part that I find alarming. Coming from Microsoft, how can young people build the skills to write code when they can’t even pay for the closed software needed to run it? It’s not free, and if access (which he states earlier) is the biggest issue facing African technologists – then how does closed software fit into the equation?

Let’s say that the developer communities do emerge even with that hurdle, we’re still left with what one person wrote: “…they will be formed from programmers who are completely dependent on American software for the livelihood: it’s neo-colonialism, pure and simple.” At it’s worst then, African governments are paying for Western products, and are dependent on these large organizations to maintain and support critical systems.

The WSJ has an article how Microsoft muscles its way in and positions itself within education and government circles in Africa, thereby cutting off major revenue sources for open source developers and organizations that originate from within the continent.

Microsoft’s efforts to outflank Linux are steering cash-strapped governments away from the cheapest, most sensible solution. They say Microsoft has been locking African government agencies into costly, multiyear agreements to license its software. “African governments cannot afford long-term licensing contracts,” says Nnenna Nwakanma of the Free Software and Open Source Foundation for Africa, a Ghanaian-based nonprofit. The money, she says, would be better spent on training people to use computers and fostering homegrown software development. Microsoft says its pricing in Africa is fair, and that the company is investing heavily in community projects across the continent. “We believe we can help improve the lives of millions of people and potentially grow our own business in the long term,” says Thomas N. Hansen, Microsoft’s general manager for the region.

Some of Africa’s poorest countries also have discovered that they can’t meet the terms of a special $3 Windows package for “underserved” students around the world, announced last year by Microsoft Chairman Bill Gates. For governments to be eligible, they have to buy at least 10,000 computers that students get to keep — an expensive proposition for cash-strapped countries. To date, Microsoft says only four countries have qualified — Libya, Egypt, Russia and Mexico.

Efforts have been under way for several years to bring computers to Africa’s masses. Computer makers, including the U.S. nonprofit One Laptop Per Child, have developed low-cost laptops for poor nations. Most can use either Windows or Linux operating systems.

Linux is “open source” software, meaning its coding is available for anyone to modify. A number of software companies sell their own versions at low prices, or even give them away and offer technical support, for a fee.

In developed nations such as the U.S., Microsoft doesn’t see Linux as much of a threat to its commanding market share in software for desktop and laptop computers. But in Africa, where resources are limited and no system has completely taken root, it does.

To save money, some countries, including South Africa, Nigeria, Namibia and Ghana, have begun using open-source software such as Linux in some government ministries or schools. “Many education budgets in Africa are seriously constrained,” says Dorothy K. Gordon, director general of an information-technology institute in Ghana. “At the moment, there are very, very sound, robust open solutions out there.”

Of course, Microsoft does not come for free – the hidden price tag is not just attached to the licensing costs but also to the ownership of innovation and data. Microsoft should be supporting local developments instead of stifling them and dealing with them as competition. Since that is unlikely, it is fortunate, that the examples named above demonstrate the growth of awareness and informed decision making as well as the development of African innovations based on Open Source.

There really are two costs when dealing with software: the expense of buying and maintaining it, and the knowledge cost within the local programming community. The monetary side is a short-term cost relative to the knowledge costs (core competency) that a nation does, or does not, develop over time.

In Africa organizations have a lot of hurdles to overcome, not least of which is the straight cost of doing business. Where it might be simple for some organizations in the US and Europe to wave off a couple thousand dollars worth of licensing fees, the same is not true in Africa. The margins are lower, so every cent counts.

In a region where cost is so important, it’s amazing then that the most lucrative deals go to the Western organizations that have high costs for ownership and maintenance. These outside organizations use backdoor methods to gain contracts where in-country options are available, usually with less expense and with greater local support.

The bigger problem is the knowledge costs, or lack thereof, when closed source organizations muscle into the most lucrative fields. What the country ends up doing is stifling its own programming community. Without money trickling back into that community, its growth is stunted. Instead of young developers learning the fundamentals of coding in open code, they end up going to work in an office that runs proprietary systems.

The scenes are far from set.