Out-Law News | 13 Aug 2014 | 4:20 pm | 2 min. read
Obama told the US-Africa Business Forum in Washington DC that he is also urging Congress to renew and enhance the African Growth and Opportunities Act (AGOA), which offers incentives for African countries that develop open-market economies.
The announcement came as a number of business deals were confirmed during the forum and a related three-day US-Africa Leaders Summit, which was convened by Obama and ended on 6 August.
Obama said “major new deals” announced by US companies in connection with the summit and forum were overall worth more than $14bn and covered sectors in Africa including clean energy, aviation, banking, and construction.
Obama said further support would be made available under the US ‘Doing Business in Africa’ programme, which was launched in 2012 and is led by the US commerce department. “We’re going to do even more to help American companies compete. We’ll put even more of our teams on the ground, advocating on behalf of your companies. We’re going to send even more trade missions.”
The “vast majority” of US trade in Africa is with only three countries (South Africa, Nigeria and Angola) and is “still heavily weighted towards the energy sector”, Obama said. “We need more Africans, including women and small and medium-sized businesses, getting their goods to market. Leaders in (the US) Congress, Democrats and Republicans, have said they want to move forward.... so I’m optimistic we can work with Congress to renew and modernise the AGOA before it expires (and) renew it for the long term.”
Obama said the US also wants to invest “to help Africans trade with each other, because the markets with the greatest potential are often the countries right next door... and it should not be harder to export your goods to your neighbour than it is to export those goods to Los Angeles or to Amsterdam”.
According to the African Development Bank, intra-regional trade levels in Africa are low at 12%. However, Obama said US-backed initiatives will focus on strengthening regional markets, making borders “more efficient” and modernising customs systems.
US commerce secretary Penny Pritzker gave the business forum examples of how the US and Africa are benefiting from increased trade and cooperation. She cited a $175m deal for SEWW Energy in North Carolina to upgrade the electricity grid in Accra, Ghana. Another agreement will see the Environmental Chemical Corporation of California build a state-of-the-art cancer institute in Ibadan, Nigeria. Pritzker also highlighted a $300m investment by Procter & Gamble of Cincinnati in a new manufacturing plant near Lagos in Nigeria.
Pritzker said: “Our economic and commercial partnership is a two-way street. Goods and services exports from the United States to African markets support roughly 250,000 jobs here at home.”
Pritzker said the US is “actively encouraging” African companies to increase their presence in the US through the ‘SelectUSA’ agency.
In a related development Black Rhino, a portfolio company of Blackstone Energy Partners of the US and Dangote Industries, the largest industrial conglomerate in West Africa, have announced plans to jointly invest up to $5 billion over the next five years in energy infrastructure projects across sub-Saharan Africa with a particular emphasis on power, transmission and pipeline projects.