We have previously commented on the view both from within the US and outside of it, that it has fallen behind in its economic and political engagement in Africa, particularly when one compares this to the extent to which Chinese influence, for example, has grown over the past decade.
In a further acknowledgement of this, the White House last week announced a new US ‘Strategy Towards Sub-Saharan Africa’ that “provides a proactive and forward looking vision grounded in partnership”.
In announcing the strategy, Barack Obama echoed the view often voiced by those investors already targeting Africa, saying: “… it is clear that Africa is more important than ever to the security and prosperity of the international community, and to the United States in particular. Africa’s economies are among the fastest growing in the world, with technological change sweeping across the continent and offering tremendous opportunities in banking, medicine, politics, and business. At the same time, the burgeoning youth population in Africa is changing economies and political systems in profound ways.”
The new strategy sets forth four strategic objectives, as described below, and commits the US to elevate its efforts on the first two of these four pillars: strengthening democratic institutions and spurring economic growth, trade and investment.
Strengthen democratic institutions: The new strategy commits the US to work to advance democracy by strengthening institutions at every level, supporting and building upon the aspirations throughout the continent for more open and accountable governance, promoting human rights and the rule of law, and challenging leaders whose actions threaten the credibility of democratic processes. As Obama said in Ghana, “Africa does not need strong men, it needs strong institutions.”
Spur economic growth, trade, and investment: Through greater focus, engagement, and the deployment of additional resources, the new strategy commits the US to work to promote economic growth, including through increased trade and investment in sub-Saharan Africa. The US will promote an enabling environment for trade and investment; improve economic governance; promote regional integration; expand African capacity to effectively access and benefit from global markets; and encourage US companies to trade with and invest in Africa.
Advance peace and security: The new strategy calls on the US to deepen its security partnership with African countries and regional organisations to meet the basic security needs of its people. Only Africa’s governments and people can sustainably resolve the security challenges and internal divisions that have plagued the continent, but the US can make a positive difference.
Promote opportunity and development: Nowhere in the world are our development efforts more central to our engagement as they are in Africa. The US will continue working to focus on sustainable development outcomes and the new operational model for US development assistance outlined in the 2010 Presidential Policy on Global Development.
We expect such pronouncements to add further limelight to the view of Africa as perhaps the last untapped investment destination, while also helping to legitimise it further as a mainstream and viable investment option to US investors and others in the developed world
Imara is an investment banking and asset management group renowned for its knowledge of African markets.