The end of an era is here: after spending the last two decades trying to expand their businesses and make money in BRIC nations (Brazil, Russia, India, and China) , the World, rather the American, international investors appear to have shifted their focus: the motto may now be "It is Africa Stupid!". In fact, Africa is where the money is to be made. The point was hightlighted during the US-Africa Leaders Summit in Washington. The Summit, attended by 50 African heads of states, was uprecedented: in its attendance, in setting a new tone for US-Africa relations and its expectations.
President Obama put it clearly in his speech on Tuesday, August 5, 2014:"I want Africans buying more American products. I want Americans buying more African products."
Why, this change after two decades of abscence?
In the very short but telling article published on July 7, 2014 (see here), AfroAmerica Network argued that China had discovered that the next phase for World development is Africa. While the West focused on BRIC, China was busy exploiting African natural resources. The US-Africa Summit is a clear sign that things have changed.
"Some of the fastest-growing economies in the world. A growing middle class. Expanding sectors like manufacturing and retail. One of the fastest-growing telecommunications markets in the world. More governments are reforming, attracting a record level of foreign investment. It is the youngest and fastest-growing continent, with young people that are full of dreams and ambition," President Obama said at August 5's Business Forum during the Summit.
Yes, Africa in general is growing... fast, and faster than BRIC.
How the US World Investors will do it? Not like China, for sure.
China, by focusing on exploiting natural resources without long term investments aimed at creating jobs in Africa itself appear to have backfired. China is being burned and some Chinese investments appear to be increasungly shunned by Africans. The US are not ready to repeat the same mistake.
"We don’t look to Africa simply for its natural resources; we recognize Africa for its greatest resource, which is its people and its talents and their potential. We don’t simply want to extract minerals from the ground for our growth; we want to build genuine partnerships that create jobs and opportunity for all our peoples and that unleash the next era of African growth. That’s the kind of partnership America offers," President Obama added.
Jobs, developping talents, and partnerships: that is what Africans want and the United States are offering.
What the US is offering to get the partneship and the new opportunity work
First the government.
The US government has aggressively approved bills and initiative to have the US-Africa partneship work:
- Renewing and invigorating African Growth and Opportunity Act (AGOA). AGOA's eases trade barriers betwee the US and African countries.
- As part of the "Doing Business in Africa" campaign, President Obama announced an additional $7 billion in new financing to promote American exports in Africa and signed an Executive Order establishing the President's Advisory Council on Doing Business in Africa.
- Among China's strategy was to build infrastustrures, mostly roads and stadiums in return for natural resources. The US government appears to know that it had to offer something in that area, but in projects with direct impact in people's lives. Hence, President Obama has made sure to emphasize the successes of the Power Africa initiative launched last year in Africa, to help bring electricity to 20 million African homes and businesses. President Obama has tripled the goal, to more than 60 million homes and business, and pledged a total commitment of more than $26 billion to Power Africa.
Second the Businesses
The implication of businesses in the unprecedented commitment to Africa was well summarized by President Obama:
"Blackstone will invest in African energy projects. Coca-Cola will partner with Africa to bring clean water to its communities. GE will help build African infrastructure. Marriott will build more hotels. All told, American companies -- many with our trade assistance -- are announcing new deals in clean energy, aviation, banking, and construction worth more than $14 billion, spurring development across Africa and selling more goods stamped with that proud label, “Made in America” ,"
Michael Bloomberg, the Founder of Bloomberg Philanthropies and the sponsor of the Business Summit was blunt: “There is great optimism for what lies ahead as Africa will play an increasingly central role in global affairs and international commerce."
This two-front approach to partnership with Africa can only mean one thing: Africa has become the next investment destination for American, and most likely, the Word investors.
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