TRALAC - Trade Law Centre

Reason for optimism in Trump's 'Prosper Africa' policy

Monday, 01 July 2019 Published: | K. RIVA LEVINSON

Source: The Hill (Blog)

When I entered the Joaquim Chissano International Conference center in Maputo, Mozambique, on 19 June for the opening of the Corporate Council on Africa’s (CCA) summit and the roll-out of the Trump administration’s Prosper Africa strategy, my first reaction was, “what were the organizers thinking?!”

Who inaugurates a U.S. policy to counter our global competitors, most notably China, in a conference center built by the Chinese, with a grant of 50 percent of the construction cost, attached to a colossus of a hotel, the Hong Kong-managed AFECC Gloria, flanked by lions sitting on pedestals, in capital city where the skyline is dominated by the Maputo–Catembe Bridge, the largest suspension bridge on the continent with 85 percent of the $725 million cost financed by the China Road and Bridge Corporation (CRBC)?

It was two years ago however, when the CCA decided to hold its biennial conference at the Chissano Center, before National Security Advisor John Bolton gave his fiery speech denouncing the predatory practices of China and Russia as the foundational argument for Trump’s Africa policy, and prior to the escalating trade war between the United States and China.

At first, I grumbled under my breath about the irony of having 15 U.S. government agencies assembled under the house that China built.

But when I contemplated the statistics — that since 2017, China, India and France have emerged as Africa’s top trading partners, that China investment since 2010 has risen twofold while U.S. investment flows have remained flat, that the annual infrastructure funding gap in Africa is estimated to be between US $130 to $170 billion dollars and that 61 percent of Chinese concessional loans to Africa are used for infrastructure, the location didn’t seem so ironic, but entirely apropos.

If the U.S. has lost ground in Africa, it’s not because we haven’t been present — some of the most transformative programs on the continent have been led by the United States, including the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) supporting more than 14 million people with lifesaving antiretroviral treatment, and the U.S. Millennium Challenge Corporation (MCC), which has provided grants to qualifying African countries to address constraints to growth including infrastructure.

It’s more because America operates within institutional and agency silos, limited by fiscal year budget cycles, where it’s easy to miss the forests through the trees. The Chinese do not have the same political or financial constraints, much less democratic accountability.

Within this context, let us recognize Prosper Africa for what it is — an effort to get the U.S. into the commercial game on a continent where combined consumer and business spending is expected to reach $6.7 trillion by 2030.

In Maputo, Deputy Secretary of Commerce Karen Dunn Kelly gave the keynote: “We know the U.S. government can and must do more to capitalize on competitive advantages of U.S. companies and the entrepreneurial spirit of the African people, hence I am proud to roll out today the administration's new signature initiative, Prosper Africa."

It was left to administrator for the United States Agency for International Development (USAID) Mark Green to flesh out the details.

“Prosper Africa is not a new program. It's a new way of doing business,” he said. “It capitalizes on the reauthorization of EXIM Bank and the new Development Finance Corporation. And, it makes the full suite of U.S. government networks and resources available and accessible to importers, exporters, and investors.”

He identified 8 steps that the U.S. government would take from facilitating blended finance options, expanding trade and investment hubs to the establishment of “Deal Teams” across the continent backed up by technical expertise. Green emphasized the importance of an enabling environment for foreign direct investment and spoke to the partnership that must be created for addressing barriers to entry.

On the margins of the conference, the U.S. Trade and Development Agency (USTDA) announced Access Africa, a program to establish greater connections between U.S. industry and stakeholders in Africa’s ICT sector, and U.S. Commerce revealed new members to the President’s Advisory Council for Doing Business in Africa (PAC-DBIA).

Tibor Nagy, the Assistant Secretary of State for Africa, reassured government and business leaders that the U.S. saw the Africa Continental Free Trade Agreement (AFCTA) as an important vehicle to improve competitiveness of both American and U.S. companies, but likewise noted that the U.S. would look to establishing bilateral free trade agreements that “promote reciprocal and mature trade relationships,” and continue to “prioritize engagements with partner countries that demonstrate the greatest opportunities for expanded US-Africa trade and investment.”

Against this backdrop, Anadarko Petroleum Company confirmed its Final Investment Decision for a US $25 billion liquefied natural gas project, the first on-shore LNG development in Mozambique. ExxonMobil has also entered the sector, receiving approvals for its plan of development earlier this year. The LNG expansion has the ability to transform low-income Mozambique and is a model of public-private partnership that Prosper Africa hopes to replicate, including the participation of the multilaterals.

I agree with some of the critics that the roll-out in Maputo did feel incomplete and disjointed at times, and indeed there was disappointment that U.S. Commerce Secretary Wilbur Ross cancelled at the last minute, leaving the event without a Cabinet-level participant. Nevertheless, 15 U.S. government agencies took flight to Maputo to stake out new ground, and the great power competition rhetoric of Bolton from last year was dialed back to a discourse on “win-win” scenarios for the United States and Africa.

Is it enough? No, but it’s a policy under construction. Even the dozens of government officials cheerleading for Prosper Africa appreciate that no matter the qualified and motivated people throughout the interagency process, the initiative needs a White House appointment — a business leader — who can speak with authority and engage the continent on the President’s behalf. And there needs to be a budget based on defined priorities, along with clear lines of reporting and accountability.

I remain optimistic because one should never underestimate the potency of a good idea whose time has come.

And I also remember that every major U.S. initiative on Africa over the past two decades, in Republican and Democratic administrations — from PEPFAR, to the MCC, from the Africa Growth and Opportunity Act (AGOA), to Power Africa/Electrify Africa and most recently to the Better Utilization of Investment Leading to Development Act (BUILD) — started off as a notion, which generated momentum, was supported by bi-partisan legislative authority, and created a new administrative infrastructure.

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