President Barack Obama on Tuesday promised more than $33 billion in public and private investments in Africa, pledging that the United States wants to deliver business and development to the rapidly booming continent, where China already has a massive presence.
Obama made the remarks as he addressed the U.S.-Africa Leaders Summit, the first of its kind and the largest event any American president has held with African heads of state and government. Countries including China have held similar events for years as they’ve sought access to African markets for oil and other natural resources.
But the U.S., Obama insisted, wants a different kind of relationship.
“We don’t look to Africa simply for its natural resources,” Obama said. “We recognize Africa for its greatest resource, which is its people and its talents and their potential.”
Obama didn’t mention any foreign competition, though China has been criticized for seeking access to markets in order to purchase raw materials and sell its manufactured goods.
“We don’t simply want to extract minerals from the ground for our growth,” Obama told the gathering of African leaders and business leaders from the U.S. and Africa. “We want to build genuine partnerships that create jobs and opportunity for all our peoples and that unleash the next era of African growth. That’s the kind of partnership America offers.”
To that end, Obama announced a $7 billion program to promote U.S. exports to, and investments in, Africa under the Doing Business in Africa campaign. U.S. companies have announced new deals in energy, aviation, banking and construction worth more than $14 billion, he said.
And he announced more than $12 billion in new commitments for his Power Africa initiative, which seeks to increase access to electricity to more than 600 million people.
Critics have suggested the U.S. is late to Africa, and former President Bill Clinton, who preceded Obama in speaking, urged U.S. businesses to embrace Africa.
“We are missing the boat,” Clinton said. “This is a very important part of our future.”
Speakers noted that six of the 10 fastest growing countries in the world are in Africa, and that its middle class is the fastest growing in the world.
Other nations are already deeply invested in the continent, and the U.S. now realizes “we have some catching up to do . . . we are letting Europe and China go faster than the U.S.,” said former New York Mayor Michael Bloomberg, whose Bloomberg Philanthropies hosted the summit, along with the U.S. Commerce Department.
Obama noted the continent still faces “enormous challenges” with poverty, conflict, hunger and disease, but he noted “a new Africa that’s emerging.”
Tanzania President Jakaya Kikwete echoed Obama’s remarks, saying Africa still has its “hot spots,” but that many of its 53 countries have changed over the past decade, with leaders endorsing strong economic and political policies.
“Democracy has taken root, governance is enshrined,” Kikwete said. “There is stronger commitment now to fight vices, corruption, drug trafficking. There is more respect for human rights.”
But Obama, Secretary of State John Kerry and Vice President Joe Biden pressed the African leaders in particular to crack down on corruption.
“People should be able to start a business and ship their goods without having to pay a bribe or hire somebody’s cousin,” Obama said.
Corruption in a number of countries hampers the U.S. to the benefit of countries like China, said Andrew Spalding, assistant professor at the University of Richmond School of Law and an expert on international business and corruption.
The U.S. aggressively enforces laws that prohibit U.S. companies from bribing foreign governments, Spalding said. Other exporters, particularly China, do not enforce such prohibitions, allowing them to “fill the void” in countries where corruption is rampant, he said.
The attention to Africa included a dinner at the White House late Tuesday night hosted by Obama and first lady Michelle Obama. Singer Lionel Richie was to perform and the menu included touches of Africa, including beef served with chermoula, a marinade popular in North Africa.
The push for more investment with Africa comes at an opportune time, with many African countries eager to process their natural resources inside their borders and not simply export their raw material, said Vera Songwe, World Bank country director for Senegal, Cape Verde, Gambia, Guinea-Bissau and Mauritania.
She called it a good time “for U.S. companies with the cutting-edge expertise to come in and partner with the continent to do this, and I think this is what we’re seeing more and more of.”
The U.S. approach to business in Africa “is almost the opposite of the Chinese approach,” said Witney Schneidman, a former deputy assistant secretary of state for African affairs. He noted that when American companies like Microsoft, Proctor & Gamble or GE invest in Africa, they generally hire and train Africans, which “has an incredible ripple effect and it helps to create skills, it helps to create this middle class.”
Chinese trade has grown more rapidly over the last decade than the U.S., Schneidman said, but “the African market is so large and there’s such an opportunity there and there’s so many different needs that I think it’s really about how do we get more U.S. companies into the continent.”
Obama called on House of Representatives Republicans to reauthorize the imperiled Export-Import Bank of the U.S., a call echoed by Clinton, who called Republican criticism of the government agency “ridiculous.”
“Economics is not theology. If you’re running a country, you’ve got to try to create an opportunity for all of your businesses to be competitive,” Clinton said of the agency that helps promote American businesses that want to sell products overseas.
Republican lawmakers nationwide are divided over whether Congress should renew the bank’s charter by a Sept. 30 deadline, with some charging that it doles out “sweetheart deals” for particular companies.