President Barack Obama’s administration, criticised for not doing enough to boost trade with Africa in the face of rising competition from China, has taken steps in recent months to address those concerns and plans to do more.
After decades of poor performance, Africa is now home to some of the world’s fastest-growing economies and China has been signing contracts to lock in long-term access to the continent’s huge resources.
“ Trade and investment is a critical component of the president’s vision for the next five years of US policy towards sub-Saharan Africa,” Deputy US Trade Representative Demetrios Marantis told Reuters in an interview.
Obama, in a tough race for re-election against Republican Mitt Romney, in June laid out a “ US Strategy Toward Sub-Saharan Africa,” which touted the continent’s potential “to be the world’s next major economic success story” and promised to work with the region to free up trade and investment.
Still, one idea that business did welcome in Obama’s strategy was a focus on promoting regional integration in Africa by tearing down trade barriers between neighbours. That would create larger markets and boost incentives for investment, Hayes said.
Along those lines, the United States is beginning talks with the five countries in the East African Community - Kenya, Tanzania, Uganda, Rwanda and Burundi - on an investment pact. It is also close to concluding an investment treaty with Mauritius and considering a similar pact with Ghana.
The strategy paper was a positive step, but it contained few new ideas and business was barely consulted, Hayes said. The US Government must do more to help large US companies compete against big Chinese state-owned companies and other foreign firms, he said.
Two-way trade between China and Africa totaled just $8.9 billion in 2000, but grew more than 1,400 percent over the next decade to $127.3 billion last year, according to a US Congressional Research Service report. Trade between the United States and the more than 40 countries that make up sub-Saharan Africa hit a record $104.1 billion in 2008, but fell sharply during the financial crisis and totaled $94.3 billion last year.