The Trump administration officially launched its Prosper Africa initiative at the U.S.-Africa Business Summit in Maputo, Mozambique on June 19. According to officials, the initiative’s goal is to substantially increase two-way trade between the U.S. and Africa, which, in 2018 alone, totaled $61.8 billion. U.S. commercial influence on the continent right now seems to be waning: While the United States remains the largest private foreign investor in Africa, its investment has barely increased since 2010 and is quickly being eclipsed by partners from elsewhere on the globe. Thus, the Trump administration, through Prosper Africa, seeks to offer the U.S. as a mutually beneficial partner to African nations, framing itself as an alternative to these emerging actors. Though the program shows promise, experts suggest that the implementation process and competition from China are the main challenges Prosper Africa must overcome in order to achieve its trade goals.
In reaction to Prosper Africa’s unveiling, on Wednesday, July 17, the Brookings Institution’s Africa Growth Initiative (AGI) and the Congressional African Staff Association (CASA) hosted an Africa Policy Dialogue on the Hill to discuss the new tools that Prosper Africa offers. Experts offered their thoughts on how Prosper Africa might fit into existing trade agreements such as the Africa Growth and Opportunity Act (AGOA) and the newly implemented African Continental Free Trade Area (AfCFTA), as well as current U.S. business operations on the continent. Panelists included Florizelle Liser, president and CEO of the Corporate Council on Africa (CCA); Matt Rees, interim coordinator for Prosper Africa; Landry Signé, AGI and David M. Rubenstein Fellow; and Emira Woods, senior advisor at Shine. AGI Nonresident Fellow Witney Schneidman moderated the panel.
Schneidman opened the discussion by asking what Prosper Africa should prioritize in order to be successful. Rees then introduced and outlined the initiative, which is a “whole-of-government” approach intended to “demystify and de-risk” Africa’s business environment for interested American investors and entrepreneurs. The initiative has a three-point approach to 1) modernize and synchronize U.S. capabilities and efforts for doing business in Africa; 2) facilitate transactions between U.S. and African businesses and investors; and 3) foster fair and accessible business climates and robust financial sectors.
The panel then explored how participating U.S. agencies might better track and share opportunities for the U.S. private sector. Rees confirmed that the new U.S. International Development Finance Corporation and U.S. Export-Import Bank will serve as the primary financial tools by which Prosper Africa will facilitate long-term change in the trade relationship between the U.S. and Africa. Liser addressed U.S. and African companies’ perspectives on the initiative, emphasizing that Prosper Africa must employ its tools for already-established companies in Africa. Liser spoke to CCA’s capacity to encourage and educate businesses about opportunities on the continent, providing concrete examples of beneficial trade and investments when businesses have enough information about market opportunities. Signé discussed the potential of and opportunities to do business with Africa, including through supporting the African Continental Free Trade Area. He highlighted that, in principle, the current U.S.-Africa strategy is definitively one of the most business-friendly in recent times. For it to be successfully implemented and make America more competitive with Africa, he said, the administration must bridge the gap between praiseworthy business principles and policies to realize them. All the panelists stressed the necessity of coordinating AGOA and Prosper Africa so that the U.S. government presents a unified policy regarding trade with African countries.
The panelists did offer some criticisms of the new initiative, especially around its organization and implementation. Several members of the panel agreed that public clarification of leadership and agency coordination will be critical to Prosper Africa’s success, especially since there is still no single coordinating body for a U.S. business to ask for assistance in entering the African market. Woods inquired about Prosper Africa’s intended impact on African countries and suggested that Prosper Africa fails to account for the AfCFTA and criticized the program’s overwhelming focus on deregulation. She argued that regulations and capital controls allow African governments to stop illicit financial flows and integrate environmental protections into business deals.
All panelists agreed that information about innovation and business potential on the continent is misunderstood in the U.S. The panel also agreed that greater diversity in investment, such as in agro-processing, light manufacturing, and clean technology, will be key to a mutually beneficial trade and investment relationship between the U.S. and Africa, now and in the future.
The panelists took questions from the audience after the discussion.
To subscribe or manage your subscriptions to our top event topic lists, please visit our event topics page.