With Africa hardly top of mind in Washington right now, it is easy to overlook the vital discussions taking place this week between the Biden-Harris administration’s foreign policy, economic and trade A-team and their African counterparts.
Cabinet ministers from 32 African countries along with private sector and civil society leaders are participating in the 21st AGOA Forum, named after the African Growth and Opportunity Act. The trade legislation, enacted by Congress in 2000, mandates these get-togethers to be held annually.
This year’s session is unusually important because the act, the linchpin of U.S. economic relations with the continent for a quarter of a century, expires in 2025. Congress needs urgently to extend, update, and strengthen it, building on bipartisan legislation offered by Senator Chris Coons (D-Del.) and James Risch (R-Idaho).
One of every three children entering the world today is born in Africa. By mid-century, the continent will be home to more people in their prime working years than China and India combined, and five times as many as Europe.
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We need African people on our side, earning good living in environmentally friendly ways, bolstering demand for U.S. goods and services, and helping save the planet. Today more than ever, you won’t be putting America first if you keep putting Africa last.
At the outset, the primary purpose of AGOA was to help African economies become more productive by incentivizing investment in their manufactures (importantly but by no means exclusively apparel) and agriculture.
The act unilaterally waives duties on most of what Africa grows, mines, makes or assembles, to give it a boost in the U.S. market. This has raised the living standards of millions of Africans since 2000, at a fraction of the cost of traditional aid and without sacrificing American jobs (except perhaps in the aid industry).
The Center for Global Development estimates the annual expense in foregone tariffs – i.e., taxes not paid by U.S. importers – at under $250 million a year, equivalent to a mere 3% of total U.S. foreign assistance to Africa — $18 billion — in 2022. Note, too, that some 450,000 American jobs are linked to U.S.-Africa trade.
There’s another reason for urgency. An increasingly powerful bloc of non-aligned countries in the world wants to see the U.S. effectively shut out of Africa as this Kabal works to build a new international order friendly to autocrats, oligarchs, and organized crime.
Their cause would be advanced immeasurably were Washington to let AGOA expire. “Champagne corks will pop in Beijing and Moscow,” Daniel Runde of the Center for Strategic and International Studies told a congressional panel in June.
With the tremendous growth of Africa’s technology sector, there is increased focus on how AGOA can serve to help accelerate investment and trade in IT.
The best way to keep those bottles stopped is rapid adoption of an AGOA 2.0 that encourages stepped-up investment, supports the growth of African enterprises and reinforces Africa’s ability to move forward with its own agenda.
That means doing all we can to ensure the success of the African Continental Free Trade Agreement (AfCFTA), signed by 54 of 55 African Union member states, ratified by 47, and now in the early stages of implementation.
Economic balkanization inherited from the colonial era has been a crippling constraint on Africa’s potential to become a diversified industrial and agricultural powerhouse based on its extraordinary natural endowments. The AfCFTA sets out to remedy that.
A single African market will be hugely more investible than the present spottily connected archipelago of states. It will spur the development of regional value chains that see a growing proportion of African raw materials turned into intermediate and final goods in Africa rather than shipped and processed overseas so that others may reap the profits of beneficiation, leaving Africa crumbs and debt.
Finally, AGOA 2.0 must address this reality: we cannot transition to a carbon-free electric economy without Africa whose soil houses nearly a third of the required minerals, including 55% of the world’s cobalt, 48 per cent manganese and 22% of natural graphite.
The U.S. meanwhile imports over 50% of 26 critical minerals from China and relies heavily on Chinese processing of cobalt (from ore mined in the Democratic Republic of Congo), lithium and graphite to meet demand for energy storage systems including electric vehicle batteries.
We must diversify our sources of critical minerals and components, which adds a further layer of urgency to getting our Africa policy right. Africa is having to bear the costs of climate change — a problem it did not create. We must see that it reaps the full economic rewards of solving it, and not sit by and let those rewards be siphoned off by the world’s new “wannabe” colonial masters.
Rosa Whitaker, CEO of The Whitaker Group, is a former assistant U.S. trade representative for Africa in the administrations of presidents Bill Clinton and George W. Bush. An earlier version of this article was published by the International Business Times.
