Dear
Mr President,
The
United States has and will be a major strategic partner of Africa for a long
time.
In
that context your recent visit is a good opportunity to analyse how the mutual
interests of the USA and Africa can best be served.
You
will have noticed that not everyone in Africa was happy to see you. In
addition, certain factions operating on this continent represent a threat to
your security interests. Those who are deprived (especially the young) see the
United States as an oppressor whilst those who have, or are aspiring to, a
better life find great inspiration in the American Way.
Trade
between USA and Africa is characterised by the export of commodities (mainly
oil) from Africa to the USA and the import of manufactured goods and
intellectual property in the opposite direction. This
is not sustainable because it is heavily imbalanced, not in terms of value, but
in terms of value added.
A
striking feature of the post 2008 downturn is the path of the US recovery. Since
2009 the US has added 7 million jobs to the payroll, is now only 2 million jobs
below the all-time 2008 peak, and is steadily raising employment levels monthly
in excess of its labour force growth. The way in which this has happened represents
a lesson for Africa in particular.
Despite
an adverse investment climate, small to medium enterprises (SME’s) in post 2008
USA contribute just over 50% of your country’s GDP. Significantly, SMEs provide
important opportunities for US citizens to develop entrepreneurial skills. In
the USA the SME is a realisation of the American Dream for millions and SMEs
are celebrated for their contribution to the development and growth of
efficiency in the country, particularly where innovation, job generation, and
international competitiveness are concerned.
Compare
this to Africa where SMEs and the informal sector cannot participate in local,
intra Africa, and international trade. On a continent where half or more of the
population is under 25 years of age, in which Africa remains at 2.7 % of global
trade whilst about 15% of the world's human population live here, this is a
socio economic powder keg.
It
is the extent to which the African economy is capacitated to celebrate, nurture
and grow SMEs that will determine whether that powder keg can be defused.
And
this, Mr President, is where you come in. The potential of SMEs to promote
domestic-led growth in new and existing industries and to strengthen the
resilience of the African economy in a competitive and challenging environment
is inarguable. Growth in African employment leads to increasing markets for
your country’s products and decreasing threats to your security. Key to this
growth is the type of “yes we can” entrepreneurship which the hallmark of
American SME’s. The abundance of African natural resources indicates that entrepreneurial
efforts on this continent should be focussed on beneficiation.
Whilst
the African Growth and Opportunity Act (AGOA) is significant, what it vividly reveals is the need for greater trade capacity
assistance and the need to address "supply side" issues in Africa.
The greatest potential to build local economic
capacity which the US could make is in
sharing technology through training to empower young entrepreneurs to convert
our raw materials into products needed by American businesses to better serve
their markets. This means that the AGOA ship needs to change course in the
direction of business to business partnerships based on capacity building.
How about it, Mr President?
