Recent White House and Cabinet-level speeches, press releases, and fact sheets, appear to show what may be a subtle shift in the Obama Administration’s high-level rhetoric on U.S. investment abroad, at least when it comes to investing in Africa. While the administration has become a strong advocate for inward Foreign Direct Investment (FDI), seeking foreign companies to invest in the U.S. economy, it has heretofore been noticeably hesitant to say anything positive about outbound investment by U.S. companies, at times promulgating the negative effects of outbound FDI on the U.S. economy by equating it to “outsourcing” and “exporting U.S. jobs.” But last week, in the context of the impressive U.S- Africa Leaders Summit, we’ve noticed some very positive language in support of investment in Africa, coming from the very top of the administration.
Senior U.S. officials have spoken loudly, explicitly, and very positively of international investment and have also enthusiastically endorsed broader terms like “partnerships,” “doing business,” “two-way trade,” and “building long-term business relationships,” reflecting a far broader policy approach than the exports-only approach we’ve seen earlier. Words matter; and these new words are very welcome.
The following pro-investment comments are a sample extracted from high-level speeches, statements, and fact sheets surrounding the U.S. Africa Leaders Summit:
“… I’m proud that American exports to Africa have grown to record levels, supporting jobs in Africa and the United States, including a quarter of a million good American jobs.”
- “Today, we’re announcing $7 billion in new financing to promote American exports to Africa. Earlier today, I signed an executive order to create a new President’s advisory council of business leaders to help make sure we’re doing everything we can to help you do business in Africa.”
“…[T]he United States is making a major long-term investment in Africa’s progress. And taken together, the new commitments I’ve described today –across our government and by our many partners – total some $33 billion. And that will support development across Africa and jobs here in the United States.
“…[O]ne of the things that I hope happens with U.S. companies is that they’re constantly looking for opportunities to partner with young entrepreneurs, startups, and not just always going to the same well-established businesses.”
Secretary of State John Kerry:
“[Secretary of Commerce Pritzker] … understands that the investments in Africa are a two-way street, and when we help nations stand on their own two feet, we create opportunity elsewhere in the world, and that everybody benefits as a result of that.” Full speech here.
“ … AGOA has made it possible for Ford Motor Company to export engines duty-free from South Africa, where Ford has invested over $300 million so they can supply engines worldwide. And the efficiencies of that operation have allowed Ford to create 800 new jobs at their Kansas City plant as part of the global production line… We want and we will work hard to get more American companies to invest in Africa. We also want more African companies to invest here in the United States, and there’s no reason that they shouldn’t. The fact is, today, Africa is increasingly a destination for American investment and tourism, and African institutions are increasingly leading efforts to solve African problems. All of this underscores that dramatic transformation is possible, and it’s possible in the next few years. Prosperity can actually replace poverty, and cooperation can actually triumph over conflict.” Full remarks here.
“Today, on both sides of the Atlantic, there is a clear, mutual desire to deepen our ties of trade and investment – because doing so will spur growth across the United States and the countries of Africa.”
“Investing in Africa will create jobs in Charlotte, North Carolina, and expand the power supply in Ghana – because of the $175 million deal signed by SEWW Energy to upgrade Accra’s electricity grid… will support workers in California and strengthen the health of patients in Nigeria – because of the MOU signed by the Environmental Chemical Corporation to construct a state-of-the-art cancer institute in Ibadan… [and] will spur job growth in Cincinnati through P&G’s $300 million investment in a new manufacturing plant near Lagos – because when P&G expands in Nigeria and elsewhere, it supports thousands of jobs at home.”
The bottom line is that we at USCIB have seen a lot to like in the U.S. Africa Leaders Summit, and welcome the Administration’s comments on and commitment to promoting the comprehensive U.S.- African economic relationship, including but not limited to foreign investment flows in both directions. We specifically welcome the conceptual framework reflected in administration leaders’ comments throughout the conference that FDI in Africa by U.S. companies is an important part of the answer and is good for the U.S. economy, for U.S. competitiveness, growth and jobs. We are also encouraged that U.S. business leaders, including from several leading USCIB member companies, have been included so prominently in summit events. It is our hope that this fundamental pro-FDI sentiment will be reflected across the board in U.S. policies, programs and negotiations across Africa as well as around the world.
USCIB also welcomes the following new actions and expansions of existing efforts that support the president and secretaries’ words cited above:
- The Doing Business in Africa Campaign
- Through the Doing Business in Africa (DBIA) Campaign, the U.S. government is strengthening its commercial relationship with the continent of Africa, a diverse region that offers substantial trade and investment opportunities across national and regional market.
- At the U.S.-Africa Business Forum, President Obama announced $7 billion in new financing to promote U.S. exports to and investments in Africa under the DBIA Campaign.
- An Executive Order to Create a President’s Advisory Council on Doing Business in Africa
- The Executive Order directs the Secretary of Commerce to establish a President’s Advisory Council on Doing Business in Africa comprised of 15 members from the private sector, including small business. The Advisory Council will provide information, analysis, and recommendations to the President through the Secretary of Commerce, including on developing strategies for creating jobs in the United States and Africa through trade and investment; developing strategies by which the U.S. private sector can identify and take advantage of trade and investment opportunities in Africa; and building lasting commercial partnerships between the U.S. and African private sectors.
- New U.S. Government Resources to Support U.S. Exports and Investment in Africa Interagency Initiatives
- Interagency Efforts
- The Principals of the Export-Import Bank of the United States, the Millennium Challenge Corporation, the Overseas Private Investment Corporation, the U.S. Agency for International Development, and the U.S. Trade and Development Agency will mobilize private capital for Africa’s infrastructure through a series of at least three outcome-oriented roundtables in Africa that will advance project- and sector-specific investment opportunities and needed regulatory reforms. These agencies will implement the initiative in coordination with DBIA Campaign agencies, African governments, and the U.S. and African private sectors.
- The U.S. Department of Commerce and USTDA launched the 20×20 Initiative to support a total of 20 trade and reverse trade missions by 2020, to promote U.S. industry engagement in Africa. Working with federal, state, and local government partners, these missions will foster U.S. business partnerships with key African stakeholders.
- The Small Business Administration (SBA) and Ex-Im Bank will collectively support 50 DBIA Campaign-themed activities and outreach sessions over the next two years to facilitate U.S. trade finance, provide counseling and training on their programs, and conduct business development to support U.S. exporters, particularly small- and medium-sized enterprises
- Overseas Private Investment Corporation
- OPIC will commit up to $1 billion in financing and insurance support to catalyze private sector investments in Africa. This is in addition to OPIC’s existing $1.5 billion Power Africa commitment. OPIC reaffirmed its plan to place personnel on the ground in sub-Saharan Africa to help facilitate increased U.S. trade and investment and will support an investment mission to the region, with a focus on the power sector
- United States Agency for International Development
- USAID will upgrade its existing African Trade Hubs into “U.S.-African Trade and Investment Hubs” that will now create new opportunities for U.S. investment in and exports to Africa. These hubs are located in Accra, Ghana, Nairobi, Kenya, and Gaborone, Botswana, and cover the West Africa, East Africa, and Southern Africa regions, respectively.
- Interagency Efforts