US-Africa Partnership

President Obama to host U.S.-Africa Summit

President Obama has invited African leaders for a summit in Washington D.C. from August 4-6 next week. More than 200 business and political leaders from both the U.S. and Africa will be attending the summit which will focus on the continent’s development and the U.S. role in partnership and investment.

Obama invited all African nations that are currently in good standing with the United States or are not suspended from the African Union. Leaders from Egypt, Madagascar, Sudan and Zimbabwe will not be attending.  Egypt, is not eligible to attend as it is currently suspended from the African Union.  There will also be no invitation for Sudan, whose president, Omar al-Bashir, has been indicted by the International Criminal Court (ICC).  The United States has sanctions against the Zimbabwean government of Robert Mugabe and his key officials over human rights abuses, political intimidation of opposition parties and role back of democracy.

Guinea-Bissau and Madagascar will not be attending the summit as well. The U.S. has concerns over the subversion of democracy in both nations.

One notable inclusion is Kenya, where President Uhuru Kenyatta is currently awaiting a delayed trial at the ICC on charges related to violence after an election in 2007 that left 1,000 people dead.

A White House statement said the trip would “advance the administration’s focus on trade and investment in Africa, and highlight America’s commitment to Africa’s security, its democratic development, and its people.”

U.S. Commerce Secretary Penny Pritzker when speaking to the Wall Street Journal, said deals worth billions of dollars would be reached at the meeting, adding that more money would be advanced to Africa for various development projects.

First Lady Michelle Obama, and former First Lady Laura Bush and the Bush Institute, will host a day-long spouses’ symposium at the Kennedy Center focused on the impact of investments in education, health, and public-private partnerships as well.

Throughout his years in office, President Obama has held numerous conferences and events focusing on building partnerships and investment for African nations. This upcoming summit is a continuation of that policy.

More information about the event can be found at the White House’s website.

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.

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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.

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Opening ceremony Kicks off Flintlock 10 Exercise in Republic of Mali

BAMAKO, Mali - Republic of Mali and U.S. Special Operations Forces troops stand in formation next to each other during the opening ceremony of the Flintlock 10 Exercise, May 3, 2010, in Bamako, Mali.

The U.S. and Mali have started security exercises:

May 4, 2010 — Bamako, Republic of Mali. With ceremonial music playing, formations of troops from the United States and Mali stood next to each other as part of the official ceremony kicking off the Flintlock 10 Exercise, May 2, 2010.

Flintlock, conducted by Special Operations Command Africa’s Joint Special Operations Task Force – Trans Sahara, is a joint multinational exercise to improve information sharing at the operational and tactical levels across the Saharan region while fostering increased collaboration and coordination. It is focused on military interoperability and capacity-building for U.S. and European partner nations and select units in Northern and Western Africa.

In her opening remarks during the ceremony, U.S. ambassador to the Republic of Mali Gillian Milovanovic highlighted the significance of this year’s Flintlock exercise.
“Recognizing the growing need for cooperation and coordination, this year’s Flintlock exercise has grown to include seven African partner nations and an additional five non-African partners,” Milovanovic said. “We have found, working with you, that this new security cooperation can, and must, also extend to training for a variety of exigencies, including disaster preparedness and medical emergencies.”

She also mentioned this year’s Flintlock exercise will include several joint medical operations throughout Mali. During Flintlock 10, U.S. Medical and Veterinary Civic Action programs will be conducted to provide the populations in rural areas health information and basic medical care.

In closing, Milovanovic said, “I would like to observe that the very make-up of this audience provides a powerful symbol of the need for successful military and civilian cooperation as well as a testament to the importance of mutual respect and confidence between our partner nations.”

Representing the Mali Ministry of Defense, Assistant Chief of Defense Colonel Béguélé Sioro told the audience the exercise provided a unique opportunity for the Malian troops to train alongside partner nations.

“This exemplary partnership offers the armies of countries in our sub-region the opportunity to evolve alongside seasoned troops, accumulate experience in the fight against criminal organizations and increase our operational effectiveness,” Sioro said.
Approximately 1,200 European, African Partner Nation and U.S. participants from 14 nations are involved in military interoperability activities across the Trans-Saharan region during Flintlock 10.

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U.S.-Africa Partnering On Infrastructure

Improvement in infrastructure will improve business climate for both U.S. and Africa according to U.S. Assistant Secretary of State for African Affairs Johnnie Carson:

Washington, DC — Although the infrastructure problems facing Africa look “daunting,” they are “not insurmountable,” U.S. Assistant Secretary of State for African Affairs Johnnie Carson said April 28, adding that infrastructure needs can be addressed by public and private partners worldwide.

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Speaking to the fourth annual Corporate Council on Africa (CCA) U.S.-Africa Infrastructure Conference in Washington, Carson said, “Africa … cannot hope to close its development gap or to achieve middle-income status without addressing infrastructure as a fundamental impediment to trade, investment and growth. Poor road, rail and harbor infrastructure adds 30 to 40 percent to the cost of goods traded among African countries.

As an example, Carson cited a recent report estimating that transportation inefficiencies amount to an export tax of 80 percent on Ugandan textiles, making it difficult for Ugandan businessmen to compete on the global market.

He added that deficits in telecommunications, electricity and water also present serious challenges to both domestic and overseas investors.

Carson said American companies clearly are interested in investing in Africa, but “when faced with the realities of doing business in many African countries, they ultimately decide to invest elsewhere.”

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Infrastructure is only one piece of the overall investment climate picture, he added. “High customs fees, corruption, the absence of reliable legal systems, and burdensome regulatory environments … can discourage potential investors” as well.

“Doing business requires partners,” he said, “good, reliable and predictable partners” and in that regard, both African governments and American companies have responsibilities.

African governments must create a welcoming climate for investors and create a level playing field where businesses can run their operations efficiently without interference. American companies, for their part, must seek a greater understanding of the local markets and conditions. They should also make use of the services offered by the United States government, he added.

“To achieve strong economic growth in Africa, it is critical that we combine and pool our efforts to address the infrastructure deficit that is on the continent. The United States government,” he said, “is trying to do its part” having invested millions of dollars in new infrastructure projects through the U.S. Millennium Challenge Corporation (MCC) in several African countries.

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In Cape Verde alone, he said, the United States is providing more than $70 million for road and bridge investments that are helping improve transportation links to the port city of Praia. Airport construction there also has been assisted by the United States government, he said.

In Lesotho, the United States is providing more than $164 million to support efforts to clean up the country’s water supply. “These projects are important,” he said, but cautioned that “they are really just a small drop in the bucket.”

Africa still needs billions of dollars for infrastructure development, and funding at that level, he said, can be generated only through public-private partnerships that bring international financial institutions, donors and the private sector together.

Carson saluted the CCA conference, which has as one of its themes “Building Dynamic Growth in Africa,” a policy objective “which we in Washington support and a policy objective that is absolutely essential if Africa is to move forward and to take its rightful place as one of the world’s great economies.”

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As the world moves into the second decade of the 21st century, he said, “Africa stands out as the world’s last, great emerging market with 1 billion people spread across 53 nations in an area that is two times the size of the United States. Africa’s great potential and enormous promise are as vast as the continent is itself,” with reserves of oil and gas, uranium, diamonds, platinum, gold, manganese and iron, to mention just a few. The continent is also blessed with large pockets of arable land, major forests and vast water resources, he said.

“Combined with Africa’s enormous potential and capital, the ingredients and mixtures for Africa’s success are there.”

Carson saluted those African governments that have made wise economic and policy decisions over the past decade and used their wealth to turn their economies around “to slowly steer their countries out of the grip of poverty.” But, he added, four decades of poor economic decisionmaking by many African governments is still hampering the continent’s progress.

Despite the global economic crisis, Africa as a whole, has still been able to achieve an annual economic growth rate of 6 percent, he told his audience.

“I remain optimistic about Africa’s future,” Carson said. “I believe in Africa’s people. I believe in their promise. I believe in their commitment to open their markets, liberalize their economies and seek out foreign investment and business that will help their economies grow. Together… we can begin to realize the continent’s enormous and innate potential.”

Carson also announced that the 2010 African Growth and Opportunity (AGOA) Forum, scheduled for the first week of August, will hold its plenary session in Washington, but will add a second segment in Kansas City, Missouri, to help African and U.S. businesses link up in a real business environment, especially in the area of agriculture.

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IBM to Support Local IT in Tanzania

IBM begins to expand its footprint in Africa, by helping to fund local home grown computer talent.

Dar Es Salaam — IBM, a company that deals with information technology, has signed an agreement with the Ministry of Education and Vocational Training to support the adoption of Information Technologies and education.

Under the agreement, IBM will support the government’s vision to build IT environment around the University of Dodoma, the ‘Silicon Valley’.

According to Country General Manager, IBM East Africa, Mr Anthony Mwai, the company will under the agreement, facilitate collaboration with US universities on research projects in the area of smarter cities, cloud computing and business analytics.

He added that, IBM will also support the Ministry in developing and implementing better access to technology and educational resources for Tanzanian universities and Secondary Schools, especially in interior areas of the country.

The agreement further underscores IBM’s commitment to Tanzania and the importance of information technology in the country’s development by leveraging cutting edge technologies.

Both sides, the US and Tanzania will benefit from this partnership. This will only enhance and deepen the economic trust for both parties.

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