How America Can Foster an African Boom

In U.S. policy circles, Africa is generally viewed as a backwater, peripheral to U.S. economic and security priorities. That status is reflected in U.S. diplomacy. The last visit by a U.S. president to an African country was then President Barack Obama’s trip to Ethiopia in 2015. Contrast this with President Joe Biden’s trips to Europe, Asia, and the Middle East just during the first year of his administration.

But now that the Chinese government has dramatically enlarged its footprint in Africa, Washington policymakers are paying attention. Trade between China and African countries reached a historic high of $254 billion in 2021. In comparison, trade between the United States and African countries declined from a peak of $142 billion in 2008 to just $64 billion in 2021, and it now accounts for a mere 1.1 percent of U.S. global commerce. The Chinese government, moreover, has numerous energy, rail, and port projects across the continent. It has also donated vaccines and hazmat suits to help countries in the region combat the COVID-19 pandemic.

In part to counter China’s growing influence, the Biden administration has just unveiled a new “21st Century U.S.-African Partnership.” Biden’s strategy supports a just energy transition and the region’s post-pandemic economic recovery. It also emphasizes the importance of strong democratic institutions and transparent governance. To truly forge new partnerships with Africa, however, the United States should place economic diplomacy at the core of its engagement. This approach should draw on America’s unparalleled strengths in advanced technologies and private capital while streamlining the U.S. visa system to allow for more business-to-business ties between the United States and the continent.

An agenda of this sort would shore up African economies and offer long-term benefits to the United States. Africa’s population is younger and faster growing than that of any other continent—the median age is 19. In fact, it’s expected that more than two billion people will reside on the continent by 2050. By the end of the century, rapidly growing African cities will constitute 13 of the world’s 20 biggest urban areas. The region’s latent growth potential is enormous. Companies that invest in Africa—and countries that exercise patience in addressing governance challenges on the continent—will gain access to new markets and build political influence. 

Leveraging America’s Strengths

To be sure, those expressing doubts about Africa’s growth prospects can point to some dispiriting statistics. According to the World Bank, 48 countries in sub-Saharan Africa could be home to 90 percent of the world’s poor by 2030. Twenty of the world’s 38 countries in fragile and conflict-affected situations are on the continent; five military coups took place there between 2021 and 2022.

But opportunities for investment exist, and some countries have capitalized on them. Africa’s growing digital economy is powered by Chinese digital infrastructure and mobile phone companies such as Huawei, Transsion, and ZTE. These Chinese companies have become market leaders on the continent in large part because, in the early years of this century, U.S. companies wrote off most Africans as too poor to afford mobile phones.

Similarly, African countries are now forging a variety of economic partnerships with companies and governments in places such as India, Russia, Turkey, and the United Arab Emirates. These deepening relationships are shaping the foreign policies of African governments: witness how many countries in the region abstained on the UN resolution issued in March that condemned Russia’s invasion of Ukraine.

Because U.S. policy on Africa is linked to the administration’s effort to curb China’s rise, there will be a strong impetus to match China’s investment in building high-speed railways, airports, and power plants. Indeed, the Partnership for Global Infrastructure Investments launched at the 2022 G-7 summit to counter China’s Belt and Road Initiative was pitched as a way to launch energy, health, and digital projects. Yet similar infrastructure investments would not be the best use of U.S. public resources because those initiatives play to Beijing’s strengths. Instead, Washington should build on the United States’ strengths in advanced technologies and private capital, thereby aligning U.S. interests with the economic development needs of African countries.

A focus on humanitarian need can overlook how much Africa has to offer in terms of new markets.

U.S. pharmaceutical companies are global leaders compared with similar entities in rival countries such as China. With guarantees from public agencies such as the U.S. International Development Finance Corporation, the Export-Import Bank of the United States, and the United States Trade and Development Agency, American companies can invest in building out supply chains to produce medicines, medical equipment, and vaccines in African countries. Such investments would help strengthen vulnerable supply chains for medical products in Africa, improve the ability of local pharmaceutical industries to comply with international quality standards, create jobs, and reduce the United States’ reliance on Chinese supplies. The U.S. government can also support human capital development in African countries through exchange programs for medical professionals.

Another comparative advantage of the U.S. government is its ability to provide financing, unilaterally and via multilateral institutions such as the World Bank, at below-market rates. African countries are advocating for reforming global finance to make it more equitable; the United States can win more friends on the continent by backing this cause. It was, after all, the absence of Western financing for infrastructure in recent decades that prompted African countries to turn to Chinese banks. Now that African states need to invest around $50 billion per year in climate adaptation, the United States should seize the moment and push multilateral development banks and European allies to provide low-rate financing.

This initiative would align well with the needs of most African countries. The region needs jobs for the more than 11 million young people joining the labor market each year. Precedents for successful U.S. private-sector investment in developing countries include places such as Singapore, South Korea, and Taiwan, which were lifted into prosperity through such investments and remain reliable U.S. allies.

People-to-People Contact

In pursuing this new strategic approach to Africa, the U.S. should expand its outreach to segments of African society that U.S. policymakers often overlook. Some opinion surveys show the United States’ favorability rating in the region to be tied with or even lagging that of China. The U.S. government already conducts civil society outreach in African countries through the International Visitor Leadership Program and the YALI Mandela Fellowship. These initiatives, however, target well-credentialed journalists and employees of nongovernmental organizations, omitting an important constituency: small-business owners.

Policy should be geared toward developing strong business ties between the United States, home to the world’s wealthiest market economy, and Africa, the region with the highest rate of entrepreneurship in the world. A whopping 22 percent of the African working-age population has started businesses. It is common to encounter a middle-class African trader or entrepreneur on a flight to Dubai or Beijing traveling to source apparel, electronics, or heavy industrial machinery. In fact, Dubai has become a business capital for Africa, with over 21,000 African companies headquartered in the UAE. The soaring volumes of African-Chinese trade, meanwhile, are mostly a result of the transcontinental ties between thousands of hardworking small-scale African and Chinese entrepreneurs.

U.S.-African small-business links, in contrast, remain paltry. The most obvious way to develop those ties would be to streamline the U.S. visa system. Changing U.S. domestic politics, the impact of COVID-19, and bureaucratic inertia have created serious backlogs for processing nonimmigrant visas. This is especially true in African countries: the wait times to secure an appointment for a visitor visa in U.S. embassies in Ghana, Nigeria, and Kenya can exceed two years. This wait time is contributing to the growing perception among Africa’s future tycoons and decision-makers that United States is distant and inaccessible.

Take Notice, Capitol Hill

It is not just the Biden administration that needs to refocus its Africa policy. U.S. congressional representatives are pursuing initiatives that overlap in ways that are not complementary. For example, two proposed bills on Africa have countervailing goals. The Prosper Africa Act aims to codify interagency efforts and promote, facilitate, and increase U.S.-African trade and investment. The Countering Malign Russian Activities in Africa Act, meanwhile, would hold accountable “African governments and their officials who are complicit in aiding [Russia’s] malign influence and activities” on the continent. No such counterpart bill exists for any other region, even though India and Gulf Arab countries such as the UAE maintain strong economic ties with Russia. The result is that the United States is seeking to resuscitate declining trade and investment relations with African countries while punishing these same countries for exercising their sovereign right to interact with another country, albeit a problematic one.

That legislation is another indication of how little import the United States places on the continent. This paternalistic approach is reflected in U.S. foreign policy, which has been almost exclusively focused on humanitarian initiatives. Some of these programs have done a lot of good. The President’s Emergency Plan for AIDS Relief, unveiled by President George W. Bush in 2003 to combat HIV/AIDS, has saved millions of lives. The U.S. Agency for International Development recently announced $1.3 billion for food assistance and the prevention of infectious diseases in the Horn of Africa, which will help alleviate deprivation in the region.

Still, a narrow focus on humanitarian need can overlook how much Africa has to offer the United States in terms of new markets, growth opportunities, and geopolitical alliances. Africa is not a peripheral region. What happens in African countries will increasingly shape the rest of the world. The international partners that help African countries overcome some of their seemingly intractable challenges and unlock their latent potential will reap significant economic and political gains. China, Turkey, the UAE and other countries are attuned to this reality. To realize the vision of a twenty-first-century partnership outlined in the Biden administration’s Africa strategy, economic diplomacy should be at its core.