US plans $55bn investment in Africa, keys into AfCFTA
US plans $55bn investment in Africa, keys into AfCFTA
Leadership | 20th December 2022
by Chika Izuora
The United States of America(USA) has revealed a blueprint that will enable a massive investment inflow into Africa, as Joe Biden’s administration begins winning the heart of African leaders.
In the next three years, the US is considering a $55 billion investment in the continent. Under the new strategy, the US is set to sign a memorandum with the African Continental Free Trade Area (AfCFTA) – one of the world’s biggest free-trade areas – which Biden said, would unlock new opportunities for trade and investment between the US and Africa.
Biden also announced billions of dollars in support and investment for Africa at a summit with the continent’s heads of state.
“The United States is all in on Africa’s future,” President Biden told the 49 African leaders attending the Washington DC meeting. It is the first such gathering hosted by Washington for eight years.
The summit is seen as a US attempt to re-assert its influence in Africa to counter Chinese involvement. It also comes after Donald Trump’s four-year tenure in office, during which he alienated numerous African leaders with policy decisions and insulting comments.
Biden struck a very different tone to his predecessor, speaking optimistically of improved links with Africa and telling the gathering that “when Africa succeeds, the United States succeeds. Quite frankly, the whole world succeeds as well.”
He said, the crisis facing the world today needed African leadership, ideas and innovations, and promised to build on the “vital” investments in Africa made by previous US administrations.
To that end, ahead of the three-day summit which ends on Thursday, National Security Advisor, Jake Sullivan said, the US would commit $55bn (£44bn) to Africa over the next three years.
Discussions at the summit focussed on building on already existing programmes, including: Prosper Africa – a US government initiative “to increase two-way trade” between African nations and the US launched in 2018, the Clinton-era Africa Growth and Opportunity Act(Agoa), which provides African apparel manufacturers preferential access to the US market and the Power Africa initiative launched by President Obama to connect millions of African to the grid among others.
But the success of such programmes has been slow to realise. Africa only accounts for just over 1 per cent of US foreign trade, which is dominated by petroleum imports from Nigeria and Angola.
In his address on Wednesday, the US president spoke about a $500m-investment to reduce transport costs at a key West African port in Benin.
He also mentioned $350m that would be spent on boosting the digital economy and said that $15bn-worth of deals had been struck at the US-Africa Business Forum.
On the sidelines of the summit on Wednesday, Mr Biden separately met the six leaders of African nations which are holding elections in 2023 to press for free votes.
On Thursday, the US president said he would back the African Union’s admission as a permanent member of the Group of 20 major economies.
