US raises bar for Africa ties, billions to flow

africa-summitThe first US-Africa summit ended on a high note, with US companies pledging investments worth $17 billion and President Barack Obama heralding Africa as a continent on the rise and a market for US businessmen.

President Obama held wide-ranging talks with around 40 leaders of African countries, the largest ever gathering of African leaders on the US soil. The summit signalled a shift in US-Africa relations, with Tanzanian President Jakaya Kikwete pointing that Africa-US relations are moving from that of donor-recipient to a relationship driven by trade and investment and closer security cooperation.

Much of the summit was focused on advancing trade and investment relations with Africa, which is home to the world’s ten fastest-growing economies and a rapidly rising middle class. US Secretary of State John Kerry said that Africa could be “the marketplace of the future”. Nearly 90 US companies participated in the summit, including Chevron Corp, Citigroup Inc, Ford Motor Co, Lockheed Martin Corp, Marriott International Inc and Morgan Stanley.  Investments in the field of construction, energy and information technology were pledged by the US and African companies and the World Bank at the US-Africa Business Forum. Coca Cola announced a massive investment of $5 billion with African bottling partners in new manufacturing lines and equipment, a venture which is also set to boost employment levels in the region. The IT giant, IBM, is also set to invest more than $2 billion in the region over the next seven years.

Besides bolstering economic ties, the summit highlighted the United States’ commitment to Africa’s security, which includes a three-to five year US security plan to help deal with conflicts sparked by the rise of radical Islamist militant groups, including Boko Haram in Nigeria, al-Shabab in Somalia and radical groups in the Sahel region. Apart from this, the US will also invest $110 million per year (for three-five years) to help build the capacity of African military for a speedy deployment of peacekeepers in the conflict-riven areas.

“We will join with six countries who have recently demonstrated a track record as peacekeepers: Ghana, Senegal, Rwanda, Tanzania, Ethiopia and Uganda,” said President Obama. “And we will invite countries beyond Africa to join us in supporting this effort because the entire world has a stake in peacekeeping in Africa.”

In his interaction with African leaders, President Obama underscored the importance of governance, rule of law and other political conditions that will help foster foreign investment and growth.

On the whole, the African leaders were quite optimistic about the outcome of the summit.

In an interview, Rwandan President Paul Kagame said: “This should have started much earlier…If things are done right, the relationship, the partnership between the United States and Africa, has the potential to bypass that relationship between Africa and Europe. Also, the relationship between Africa and China.”

The summit underscored the growing importance of Africa for the US and signalled Washington’s intent to scale up diplomatic and economic ties with the African continent.  “The United States is determined to be a partner in Africa’s success,” President Obama said in his speech at the forum. “A good partner, an equal partner, and a partner for the long term.

In his speech, he also mentioned that the US is interested in the continent not simply for mineral resources, taking a swipe at China.

After a decade of entrenched Chinese presence in the region, the United States is set to make greater strides in the region.

The US-Africa trade stands at $63 billion in 2013 compared to China’s trade with Africa which has surpassed $200 billion by 2013. Investments are also being made by China in large-scale infrastructure projects, like building railways and roads. Compared to US investments which come with political conditions attached to it, the Chinese investments are more attractive with a “no-strings attached” policy.

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