Wednesday, December 19, 2012

Obama follows up Africa strategy with ‘doing business’ campaign

Obama follows up Africa strategy with 'doing business' campaign

Newly re-elected US President Barack Obama, who has been criticised for having had too little engagement with Africa during his first term, has followed up on the June release of his administration's 'US Strategy Toward Sub-Saharan Africa' with a new Department of Commerce-led campaign, dubbed 'Doing Business in Africa' (DBIA).

The campaign was officially launched in Johannesburg on Wednesday by Acting Commerce Secretary Dr Rebecca Blank, who hosted a continent-wide briefing on DBIA after having first unveiled it to South African business leaders.

Blank would also promote the initiative during meetings with East African leaders in Kenya later in the week.

In a letter published on November 26 to outline his support for the initiative, Obama said the goal was to deepen trade and investment between the US and a region that is home to six of the world's ten fastest-growing economies.

"Many American entrepreneurs and business leaders are unaware of the tremendous trade and investment prospects in sub-Saharan Africa," Obama lamented, while promising that the campaign would seek to increase awareness of these opportunities.

Currently, US trade with sub-Saharan Africa accounted for only 2.6% of the country's total trade with the world.

In 2011, two-way trade climbed 16% to $95-billion when compared with 2010, with African exports benefiting directly from the Africa Growth and Opportunity Act (Agoa), which offered duty-free access to the world's largest economy on 6 400 tariff lines.

But Blank insisted that, "we are still far from reaching the full potential of US-African trade – as well as investment. We can and must do more."

Through DBIA, which unlike Agoa does not exclude any African country, the Commerce Department had outlined five areas of intervention, including:

  • The training of officials at Export Assistance Centers, in the US, as well as commercial service officers around the world on specific African markets and sectors, while offering ongoing information about the new opportunities arising on the continent.
  • Empowering the 'African Diaspora' in the US with tools to trade and invest in Africa.
  • Working with organisations such as the Corporate Council on Africa and the Business Council for International Understanding to launch a series of 'Africa Global Business Summits' in the US during 2013, at which ambassadors and commercial service officers would provide insight to business on specific African prospects.
  • Partnering with the State International Development Organisation to train American economic development leaders on doing business in Africa.
  • And, organising two-way trade missions and shows for African and American companies and business leaders.



Blank also reaffirmed the Obama administration's commitment to working with the US Congress to extend Agoa beyond 2015, when it was due to expire.

However, she was less unequivocal on whether the extension would be applied equally across large and small African economies.

Some South African government and business leaders have expressed concern that Congress might seek to exclude South Africa from Agoa, or reduce the benefits, partly owing to the fact that the country was now a member of the Brics bloc of Brazil, Russia, India and China.

"There is no question that Congress will look to see whether American businesses appear to be operating on a level playing field, whether they have access to procurement and investment opportunities the same as other businesses. If they feel the answer to that is 'no', there might well be hesitations in Congress," Blank cautioned.

But she had "every faith that the sort of investment and business opportunities [that exist in South Africa] are going to continue to unfold and we will be in a position to strongly support a renewal of Agoa come 2015".

Aware of this potential reticence, South Africa was reportedly preparing a targeted lobbying and advocacy campaign focusing on members of Congress and the Senate, as well as with key government departments and influential policy think tanks.

The country was keen to use such engagement to shift the conversation to the opportunities being presented for US business in Africa and to highlight the "goodwill" that flows to US firms as a result of the Agoa preferences.


Blank also used her visit to reiterate the US view of South Africa as a "crucial gateway to the rest of sub-Saharan Africa". But she said that the recent labour unrest was of "great concern".

"Any business leader will tell you that their investment and commitment to an area is very strongly related to their sense of political and economic stability. South Africa has been a gateway for the rest of Africa partly because it has had a growing and stable economy," she said.

"From my perspective, as Secretary of Commerce, my main concern here, is that you want to create a sense of stability," she added, warning that the recent images of violence and death could negatively influence the way US business perceived the country.

Blank also defended the limited personal time Obama gave to Africa during his first Presidential term, when he had been forced to focus his "energies on putting the US economy on a stable path".

She emphasised Obama's personal interest in, as well as his familial associations with, Africa and said that, while she had no insight into the President's future schedule, "I rather suspect that he is going to put quite a bit of focus on the African region" over the coming for years.

"I am here at his personal request," she concluded.

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