The US intends to do business in Africa, beyond the usual export-import trade and extractive industries such as oil and gas.
That was the signal sent out by the visit of a high-level United States delegation – led by US Assistant Secretary of State for Africa Linda Thomas Greenfield – to attend the 10th bi-annual US–Africa business summit in Addis Ababa, Ethiopia, from February 2 to 4.
Steven Hayes, president of the Corporate Council on Africa (CCA), which claims to have been the most active US business association in the continent since 1993, said the World Bank had predicted the vast continent was on the verge of an economic take-off, just as China was 30 years ago and India 20 years ago.
However, the business summit, held in Africa for only the second time, was not just about using the continent’s potential, he said. It was also about diversifying US investments in the continent, moving from the extractive sector to the productive sector.
“Across this continent which has a one billion population, you have a rapidly growing market and a youthful population,” said Hayes, adding that conference host Ethiopia had a stable macroeconomic policy, zero tolerance of corruption, robust intellectual property rights, and minimal crime.
The CCA says its membership includes 180-plus companies, representing nearly 85% of total US investments in Africa, ranging from agribusiness to tourism.
While the conference was often optimistic about business opportunities in the continent, Greenfield cautioned that when investing in Africa, patience and resilience were needed, though the payoffs could be enormous.
“African governments must provide the enabling environment – stability, fair and efficient regulatory perks, and an attractive investment climate. We can’t let personal interest or corruption get in the way of progress if we’re to succeed in Africa,” she said, implicitly admonishing African states.
She cast an especially critical light on Ethiopia’s telecom infrastructure owned by the state monopoly Ethio-Telecom, which Ethiopia’s Western development partners want to see liberalised. The government refuses, saying it is a cash cow for the country’s ambitious infrastructure projects.
Greenfield nevertheless pointed out that with the Africa Growth and Opportunity Act (Agoa) being extended to 2025 and Congress passing legislation facilitating President Barrack Obama’s landmark Power Africa Initiative, US business was in the continent to stay.
Power Africa, which aims to double the access to electricity of citizens in sub-Saharan Africa by private firms, was announced by Obama during his 2013 trip to Africa. It has had a slow start because of congressional inertia, financial constraints, and bureaucratic hurdles.
The project is supporting a planned 1 000 MW geothermal project in Ethiopia, a 10 MW hydropower project in Tanzania, and the privatisation of over 2 000 MW of power generation in Nigeria.
AGOA is a US law, first approved by Congress in May 2000, providing trade preferences in the form of quotas and duty-free entry into the US for most goods from eligible African countries.
While the Ethiopian government insists that “sensitive sectors”, such as banking and telecommunications, will be closed to foreign investors for now, Finance Minister Abdulaziz Muhammad has hinted that the government is keen on various public-private partnerships.
Despite the conference attracting business and government delegates from across Africa and the US, no Chinese-style business or financing deals were closed during the meeting, which instead focused on “entrepreneurial opportunities between the two countries”.
US Ambassador Patricia Haslach, in an apparent jibe at China, said the US was looking to Africa as a long-term equal partner, not focusing on the continent’s natural resources but rather on its greatest asset, its people, and their talent and potential.
Greenfield recalled Obama’s visit to Kenya last July where he launched the global entrepreneurship summit, in which private companies committed to mentor over one million entrepreneurs and pledged over $700-million in capital for the next generation.
Obama also visited Ethiopia last July where he met government officials and spoke at the African Union headquarters.
A participant in the US-Africa business summit was Rahamah Wright, a US-Ghanaian entrepreneur and CEO of Sheayeleen, a cosmetics company which sells Shea butter products to the US market from Ghana.
Her company works directly with women in northern Ghana who supply Shea butter products, such as body creams and lip balms. The butter comes from the Shea tree which grows exclusively in sub-Saharan Africa and is traditionally cultivated by women.
“We do this by organising co-operatives, providing training, production equipment, as well as capital to help them produce the products, which we then import, package, and distribute through whole foods markets, the largest natural products market in the US, and independent stores.”
Wright said she helps her Ghana partners generate income so they can send their children to school, buy food, and medicine, have savings, and contribute to their families and their communities.
She also serves on Obama’s advisory council on doing business in Africa as a private sector leader making recommendation to Secretary of Commerce Penny Pritzker on how to improve business engagement between the US and Africa.
“We invest a lot in training, making sure we make quality products with good packaging to catch their eyes when they see the product. Another part is branding, where we’ve brought women from our cooperatives to the US, and travelled to different stores where we sell our products,” she says.
According to Wright, Sheayeleen Cosmetics Company is doing a market study in Addis Ababa, Lagos in Nigeria, Johannesburg in South Africa, and Dakar in Senegal, to see how it can distribute its products in these markets. It is also planning research on the Neem and Moringa trees to extract cosmetics products from them.
“I’m doing mentorship through the Young Africans Leaders Initiative program and African women entrepreneurship program. As I learn and make mistakes it’s important to share that with our people who want to do something similar. I see myself as a diaspora link,” says Wright.
Greenfield said during her visit she had seen extraordinary investment opportunities in Ethiopia, not just in Addis Ababa.
While the US-Africa business summit focused on creating opportunities, not on signing economic deals, the shadow of China was still hard to miss, with the US souvenirs given to delegates being made in China, showing the clout of the Asian giant even when its not at the table.
Nevertheless, Ethiopian Prime Minister Hailemariam Desalegn was clear – his country does not see ties with the US and China as a zero sum game. He urged a stronger economic partnership with the world’s largest economy which is also home to the largest number of Ethiopians outside of their homeland.