COOK: US seeks two-way trade with Africa
Friday March 04 2022
Akunna Cook, the US Deputy Assistant Secretary of State, spoke with James Anyanzwa on the Joe Biden Administration’s investment strategy for Africa
What is the purpose of your visit to Africa?
To explore ways to deepen US-Africa trade and investment, particularly the two-way trade and investment.
We are rolling out the Prosper Africa initiative and talking to entrepreneurs, investors and policy makers to understand how we can better engage with African businesses to draw US investments into the continent.
We have particularly focused on creative and digital technology industries.
We are also looking at health and climate technology because we understand that there is a lot of dynamism, a lot of brilliance and a lot of creative energy and ideas on the continent. There are African solutions to global problems and many of them are here in Kenya.
Your Africa visit is the first of a series of economic diplomacy visits that the US government has planned for the continent .Why did you choose Kenya, South Africa, Namibia and Nigeria as part of your initial tour?
Kenya, Nigeria and South Africa are three of the largest economies in the continent. These countries, together with Egypt, are the largest destinations of US investments in Africa and particularly in the creative industries and the digital technology field.
Namibia is particularly interesting because of the significant potential for investment in climate technologies.
What are the key barriers to trade and investment between Africa and the US and how is the Prosper Africa initiative addressing these?
The first I think is addressing what I think is an exaggeration of the risk perception in Africa. Perhaps because of Western media, a lot of Western companies are either unfamiliar with Africa and the opportunities or have come to view Africa as much more risky than the rest of the world. And so what the US State Department is doing through Prosper Africa is dealing with some of these risk perceptions.
This is partially why we are focused on creative industries because we understand that story telling and media is a great way to change ideas and stories about the continent, in addition to being a significant economic driver. So (we are) making it easier for companies to understand why Africa’s priorities are strategic to the United States, bringing them on delegations and just making it easier for companies to get access to the African markets.
The second piece is working with governments to create a predictable regulatory environment to draw US investments. The last is mobilising financing to bring multiple transactions to a close. For example, the US Development Finance Corporation is a major player in this area. Exim bank is also a major player and there are other tools such as the US Trade and Development Agency, which often provide funding for feasibility studies, for example.
How much funding and financial guarantees has the US set aside to support African businesses access the US market under the initiative?
Prosper Africa is not a development assistance programme where there are billions of dollars that the US government is giving in assistance, but it is an effort to harmonise over 70 tools that can exist within the US government, coordinate them and modernise them. For example, the US Development Finance Corporation has added much more capacity to fund transactions and now has the ability to provide equity financing.
This is about two-way trade and investments; we want to see more African companies investing in the United States and being able to access the US market just as we want to see more US companies and entrepreneurs being able to access African markets.
It is a collaborative approach. The private sector is leveraging on the resources of the US government in a coordinated way.
African traders are currently accessing the US market duty free under the African Growth and Opportunity Act (Agoa) initiative. Do we expect to see the continuation of these privileges under the Prosper Africa once the Agoa window closes in 2025?
Agoa as you mentioned is set to expire in 2025 and it is up to the US Congress to decide whether or not it will renew the agreement. We think that there is a lot more room for African companies to take better advantage of Agoa.
There are a number of countries that have positioned (themselves) to take best advantage of Agoa and have the capacity to export to America and so we would like to see many more countries being able to export to the United States. But we also know there are a number of countries that have done exceedingly well with Agoa and frankly, could move to a different model that is not just one-sided trade partners. So we are exploring ways to look at that model.
What are the key sectors of interest to American investors in Africa?
We see enormous potential in music, fashion, film and television as not only economic drivers but also the means of addressing the risk perception issues I mentioned earlier.
Secondly, there is a lot of interest in infrastructure, whether that is vaccine manufacturing in the continent or improving the continent’s capacity to produce vaccines and improving the overall health infrastructure so that Africans can get quality healthcare at home without having to travel to US, Europe, or other places.
Climate and energy will also be another significant priority for the US administration -- understanding how we finance our renewable energy and thinking about even investing in future technologies and development of more technologies so that we can meet our needs while protecting our planet. The other sectors of course are agriculture, agro-processing and digital.
What is the US policy on trade and investment in Africa?
Africa has a young and dynamic population and creating jobs for the continent’s young people is going to be of strategic interest to the United States.
We also want to make sure that our companies in the private sector are able to take full advantage of the opportunities that the African market offers and also with the introduction of the AfCFTA, this is going to be one of the largest trading blocs in the world with 1.3 billion consumers. We want to make sure that we are part of that.
So our strategy includes regulatory environments to make this an attractive investment destination for American companies and also to understand, for American companies, what the needs of the governments are, what are the particular strengths of each of these markets so that we can approach trade and investment as partners.
How is the US positioned to take advantage of the AfCFTA to advance its interest on the continent?
We are excited about seeing the African continental free Trade Area implemented and come to life. We think it is not only transformational for the continent but also for US companies that are focused on Africa. Regional integration will mean that it will be easier to operate across the continent and harmonised set of rules will be easier for the private sector players to navigate.
We are ready to assist with the implementation, with technical assistance and we are looking for ways to deepen engagement between the US private sector and the AfCFTA Secretariat.