Africa’s Preferred Prosper Pivot

img_research
By: admin

Six months into the Trump Administration’s unveiling of its “Prosper Africa” initiative intended to boost the middle class, youth employment and business climate in the interest of national security and Chinese aid and investment competition, the Washington-based Center for Strategic and International Studies issued a report on turning it “into reality.” It notes that over half of Sub-Saharan countries are “free” in political terms, aided by the spread of cellphones and other technology to enhance accountability and democracy. The middle class should triple to over $1 billion by mid-century, but media searches show 80% negative mentions with a corruption, conflict and disaster focus. For the past decade US aid averaged almost $10 billion, reflecting longstanding ties but otherwise “economic disengagement. “ Exports to the continent have been under 1% of the total, despite urbanization raising goods and services demand.  Bilateral trade, finance and professional training can reduce joblessness and social instability and tap into household consumption estimated at $2 trillion over the medium term. Europe and Asia have dedicated programs such as Germany’s private sector development “Marshall Plan” and China’s array of infrastructure and loan for natural resource efforts. Its two-way $150 billion trade was triple the US figure in 2017, and for the five years preceding that date credit lines averaged $17 billion under their own debt and environmental sustainability criteria.

Washington has deployed thousands of troops in twenty countries on security and humanitarian missions, and seven are in the top ten of aid recipients globally. The African diaspora is 5% of the immigrant population, and tens of thousands of students are at US universities. One million Americans toured the region in 2017, and overall numbers are projected at 85 million by end-decade as big hotel chains like Hilton and Marriott expand. The visa restrictions recently proposed on Nigeria and neighbors could provoke countermeasures stifling this potential, the think tank warns. The twenty-year old duty-free AGOA arrangement, extended through 2025, is a linchpin but petroleum products dominate despite also targeting garments and manufacturing. AID’s sub-regional trade hubs have created $600 million in projects, and the MCC has approved dozens of host nation public-private sector compacts according to strict objective criteria on good governance, economic growth, and social indicators.

 Power Africa was launched five years ago to catalyze over 100 deals and power connections to 60 million citizens. It “de-risks” investment through official guarantees and financing, and promotes policy reforms and free-market pricing under a dual mandate. The African Development Bank otherwise puts infrastructure needs at $150 billion annually, with half the sum still outstanding. Prosper Africa has not yet been fleshed out, and lacks a communications strategy and specific goals.  Free trade agreements should be a priority as the African Union forges a continental structure, and a dedicated commercial corps through embassies and the main organizations at home could be recruited for business leads and relationships. Telecoms is a particularly promising industry for American competitive advantage and the Ex-Im Bank still lacking board members and the new Development Finance Corporation to succeed OPIC would benefit from thematic and activity reorientation in a new “reality,” CSIS suggests.

-->