Africa pushes for stronger trade links with US


    6 August 2014

    As African leaders prepare for a roundtable engagement with US President Barack Obama in Washington on Wednesday, South African President Jacob Zuma has called on leaders from both continents to seize the opportunity and consolidate their relationship.

    Obama will be convening the first ever US-Africa Leaders’ Forum at the White House as he seeks to affirm his legacy of having put Africa high on his agenda as the leader of the world’s biggest economy.

    The summit takes place at a time when both Obama and European leaders are increasingly recognising Africa as a new growth hub, with the six-fastest growing economies being African.

    ‘This is America’s attempt to catch up’

    At least one analyst who spoke to SAnews believes that Obama’s decision to hold the summit with African leaders did not come as a surprise.

    “We’ve seen regions like Europe and countries like China really making a big effort to get close to Africa, because the continent is growing so fast and is becoming more important, and I think this is America’s attempt to try to catch up,” South African Institute of International Affairs policy analyst Christopher Wood said on Tuesday.

    Wood said America could no longer ignore the fact that Africa, with a 5.4% growth rate predicted for 2014, was outpacing global growth. US goods and services exports to Africa reached a record high of $50.2-billion in 2013, up 40% since 2009. These exports supported 250 000 US jobs.

    Wood said the US was also looking up to South Africa as a leader and gateway to the continent, and he believes it is for this reason that South Africa will remain part of the African Growth and Opportunity Act (Agoa) programme.

    “President Zuma, as a leader in the continent, has a very important role. [He] relayed Africa’s growth story to the United States, so I don’t believe in this talk that they will take South Africa out of Agoa. It’s more [likely] just a way to get certain concessions from South Africa.”

    Agoa is a legislation that provides duty-free market access to the United States for qualifying sub-Saharan African countries by extending preferences on more than 4 600 products. Its current term will end in 2015 and the US Senate is expected to vote on its renewal.

    South Africa has been leading the call for the programme to be extended for another 15 years, citing its trade benefits for both the US and Africa.

    Genuine, mutually beneficial partnerships: Zuma

    At a US-Africa Business Forum hosted on Tuesday, President Zuma said the summit came at an “opportune” time for Africa, as the continent was in a better shape than ever.

    Zuma had earlier met with Senate members as well as US Deputy President Joe Biden.

    “The summit gives us an opportunity as leaders to look at our relations, as leaders and the business community. I also think it came at the right time when Africa is in fact organising itself better than before, in terms of how it conducts its affairs.”

    Zuma was speaking during a panel discussion that took place alongside the US-Africa Business Forum hosted. Other panellists included the presidents of Tanzania, Senegal, Rwanda and Tunisia.

    “[The summit] comes at an opportune moment, when Agoa – which has been critical in our relationship – is left with one year before it expires, and we are saying we have an opportunity to deal with that issue … to put our views to the United States, to say we would want the continuation of Agoa,” Zuma said.

    “We now have the experience to better discuss what we need to do about Agoa, so as to better and consolidate our relationships … I’m sure when we end this interaction, we will be in a better place to deal with our relations.”

    He said it was important that leaders went to Wednesday’s summit with the common goal of forming genuine partnerships to benefit both Africa and US economies.

    Powering Africa

    Obama is the first US president to invite more than 40 African leaders to Washington for a meeting. A range of things can be expected from the summit, according to Wood.

    “There are other things that are perhaps less important for South Africa but are important for the continent. One of those initiatives is called Power Africa, which seeks to help increase electricity connection in the continent.

    “Even though they will benefit from it in terms of investments, America wants to be seen to be making a difference through this powering of Africa.”

    South Africa has been tipped as a possible host of the headquarters of Power Africa.

    In its 2014 annual report, the company said as of June this year, it had helped produced more than 2 800 MW of new generation capacity, 25% of its ambitious target of adding more than 10 000 MW of cleaner energy generation in sub-Saharan Africa.

    On Tuesday, Obama announced a renewed commitment to this initiative, and pledged $300-million in assistance per year to expand the reach of Power Africa across the continent in pursuit of a new 30 000 MW of additional capacity to Africa, and increasing electricity access by at least 60-million household and business connections.

    He also announced $6-billion in new private sector commitments, bringing the total private sector commitments under Power Africa to date to more than $20-billion.

    This includes additional commitments under Beyond the Grid, a new sub-initiative announced at the June 2014 US-Africa Energy Ministerial. The initiative seeks to foster private investment in off-grid and small-scale energy solutions, which will expand access to remote areas across sub-Saharan Africa.