U.S.*Africa Leaders Summit What’s the take home for Africa? Trade & Investments
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Agenda - Key Issues ★
Breaking Ice & Africa Rising
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China - the Uneasy Axis
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Diaspora - Africans living and working in America
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Terrorism - a Global Threat
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Corporate America - that African business case
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Key Investment Sectors - where is the money going?
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Historical Ties: Traditional Allies - where did we lose it?
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Democracy, Civil Rights - History & the Connection
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After the Summit - Money & Commitments
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Thawing Ice ★
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USA does not want to lose sight of the New Africa that is emerging: ●
Fastest growing economies in the world, now
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Growing middle class
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Expanding sectors
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Fastest growing telecommunications markets
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Government reforms attracting record Foreign Investments
Obama: US is determined to be a partner in Africa’s success, a good partner, an equal partner for long term. ●
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Relations had been deteriorating, Leaders had shown Personal Uneasiness owing to politics
Africa Rising - a concerted effort by all African leaders to showcase Africa as a common destination for investments: ●
Improved governance makes business environment more predictable
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Leaders more accountable
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Less dependence on colonial masters
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Less dependence on Aid / Shift to Direct Investments
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China: Uneasy Axis ★
Statistics-2013: China trade with Africa USD 200B; United States trade with Africa USD 80B ●
By conclusion of the US-Africa Summit, the USA offered to invest $30b in Africa. This is now largely seen as a counter move for China’s investments and a likely sign of things to come.
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“China awoke to the opportunities available in Africa” and “Africa’s trade deals with China have not affected historical bonds with US and Western countries” was African leaders’ remark.
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Africa’s economies are getting more sophisticated and this maturity has necessitated Africa to extend itself globally including going East to compliment existing partnerships.
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Africa Vs China - Trade Imbalance favouring China.
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China has been accused of being agnostic to issues of good governance, human rights and fight against corruption AFFRONTA www.affronta.com
Diaspora Impact ★
The distance brought about by China has only been shortened by the diaspora effect: ●
Africa’s largest diaspora is in the US, and has been calling African leaders to renew engagement with the US.
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Diaspora Pleas - “Repair relations. Re-engage with the US”
The African diaspora effect, has remained almost the only point of need for reconnection between the US and Africa:
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Regular remittances for family and social support - a huge supply for foreign exchange
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Diaspora capital investments and trade in Africa’s main sectors
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Alternative source of funds for governments - bonds etc
Diaspora Remittances and Capital contributions are now being recognized as key to growth and development in Africa as they are a major source of foreign currency exchange AFFRONTA www.affronta.com
Terrorism - A Global Threat ★
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African leaders made a point that Terrorism is a global threat that needs to be tackled by all: ●
Leaders felt that US needed to contribute / partner more to fight terrorism in Africa
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Need for US needed to set aside more resources for the cause
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A hands off approach is counter-productive in the fight against terror
Current Key Threats across Africa: ●
Al Shabab of Somalia
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Boko Haram of Nigeria
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Mali & North Africa Jihadists
Travel Advisories: ●
Africa’s Tourism is already suffering following travel advisories by US and other Western govts
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Travel Advisories counter-productive; enforces the threat & empowers terrorists
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Need for partnership in securing the continent and fighting terror
Current global inter-connectedness calls for greater partnerships in fighting terror AFFRONTA www.affronta.com
Investor Meetings ★
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Corporate America showed keen interest in investing in Africa’s key projects: ●
Energy & Power Generation - example, GE, Oil Companies
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Infrastructure - Road & Railway
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Health Sector - example, Microsoft Foundation
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ICT & Technology transfer - example, IBM, Google, Microsoft
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Agribusiness & Food sector - Coca Cola & various Food companies
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Consumer goods - example,Procter & Gamble
African Leaders Presented & Negotiated as regional blocs at Breakfast Meetings ●
Regional Trade and Investment blocs as a stronger business case
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Boosted by Population numbers
Corporate America: Strategies & Challenges: ●
Some have already started work in Africa - Technology companies like IBM, Google, Microsoft
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Best strategy is keeping a long term view as big gains of volumes and profits won’t be immediate AFFRONTA www.affronta.com
US - Africa: Historical Ties ★
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Both sides relied heavily on their historical ties as a means of renewing relationships: ●
US has been a big partner for Africa in the past but that relationship never on equal terms
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US has intervened in Africa’s problems in the past in big ways - war, hunger, crisis
Economic Partnerships renewed: ●
African Leaders pushed for extension of preferential trading partnerships
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Sub Saharan Africa Leaders lobbied for 15 year AGOA extension up to 2030
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Emphasis: Africa’s bonds with the US born out of shared values and not easily broken
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Similarity between the Independence movements and the civil rights movements
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The Obama Legacy for US-Africa relationship; a personal pursuit for the US President
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A delegation of African American Leaders at the Summit helped emphasize historical ties
The new Africa that is emerging: opportunities for renewed partnerships: ●
Africa seeks to engage US as equal partners; Leaders have grown tired of being ‘dictated’ over by US
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Serves the US better to push for greater private sector role in US-Africa partnerships
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Democracy, Civil Rights, Good Governance ★
The usual rhetoric of pushing for democracy, greater civil rights and improved governance took a back seat in the Summit’s agenda:
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Africa still lags behind on issues of good governance and democracy generally
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Most African leaders present at the Summit still seen as dictators or abusers of power
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There was a major shift with this Summit away from these issues to business, economics
Subtle Message: America’s position on these issues remained but was only seen in the invitations sent which excluded some African leaders for countries like Zimbabwe, Sudan, etc
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ICC and International Justice: Even with real differences in these issues; there are greater differences in perceptions of what Africa’s views: ●
as unfair targeting of leaders by International courts of justice
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as the manipulation of International Institutions for political advantages
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as the under-representation of African countries in UN Security Council and Monetary Institutions
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After Summit: Money & Commitments ★
More than money: A new platform for re-engagement ●
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African leaders re-engaged with the US - a new level of engagement as equal partners, for the long term
The Numbers, US Commitment: ●
Deals worth more than $30B secured by close of the summit
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$0.5B Peacekeeping and supporting African military forces fighting terror groups
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Opportunities for African private sector to engage US corporates
The Challenges: ●
Obama, Democrats vs Republicans: US Congress politics has punished Africa
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African Leaders hope that the Summit is more than just an International gimmick; “Take us seriously”
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Good governance in Africa; Legislation needed for predictable environment for business
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American Institutions: US EXIM bank, for example, need rejuvenation
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Private sector involvement, engagement as opposed to direct government involvement
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