What’s the Game-plan for U.S.-Africa Summit? President Barack Obama and some African leaders at a conference in Washington in 2013 African leaders this weekend travel to United States where they will attend a three-day U.S.-Africa Leaders Summit, the first such event of its kind, hosted by President Obama. Presidents Museveni, Uhuru Kenyatta, Paul Kagame, Salva Kiir and others in the region with the exception of Sudan dictator Omar Bashir, have since confirmed their participation in the Summit. President Museveni’s plans about the Summit remain unclear but it is hoped top Ugandan business leaders will attend some of the business meetings in Washington. The Kenyan Government says it will use the upcoming US-Africa Leaders Summit to strengthen its economic and security partnership with the US government. The Cabinet Secretary for Foreign Affairs and International Trade Amb Amina Mohamed last week said President Kenyatta will lead a powerful delegation to participate in the summit events that start on August 4. She said the partnership between Kenya and the US has been working well, contrary to assertions and the new dynamics of the world. “Our partnership with the US is working but for every relationship it has to be nurtured. There are a lot of dynamics, for instance our partnership never used to deal with terrorism in the past,” she said. Observers say if well utilised, African leaders should be able to pull foreign investors to their countries to boost foreign exchange, employment opportunities and tax revenues. Most countries in East Africa are expected to maintain a strong economic performance with a growth rate of more than 6 percent during the projection periods of 2014 and 2015. According to the Africa Economic Outlook report (2013) for East Africa, growth is expected to driven by a number of factors including improved performances in the agricultural, mining, tourism and industrial sectors which of course need deep-pocket investors from foreign countries. Notably, four countries, namely Ethiopia, Rwanda, Tanzania and Uganda, are projected to grow at around 7 percent or more during the projection period; while other countries such as Burundi and Djibouti will most likely achieve growth rates of between 5 percent and 7 percent. Even for countries with relatively low projected growth rates, such as Comoros, Eritrea, Seychelles and Sudan, the projected growth rates are in almost all cases higher than those of 2013. Kenya’s Foreign Minister, Amb Amina has since downplayed the effect of travel advisories issued by countries including the US against some parts of Kenya. She said even though the US, UK, and Australia issued travel advisories against parts of Kenya, it has not affected investor interest in Kenya. “We still export 30 billion to the US, we still export our flowers to Europe, and we just floated the Eurobond which was oversubscribed by 500 per cent. 66 per cent of the buyers were US citizens,” she said. The enthusiasm of US investors in the Kenyan economy was reinforced by the fact that many CEOs of American companies want to meet President Kenyatta on the sidelines of the summit, she said “Many CEOs of US companies will hold one-on-one meetings with President Kenyatta. This includes the CEOs of Microsoft, Pfizer, Cocacola and other companies that are interested in Kenyan business,” she said. US eyes lucrative investments in the region In Eritrea, economic growth has fallen sharply to 1.1 percent in 2013 from 7 percent in 2012 due to shrinking economic activities in almost all sectors except mining, but growth is projected to rebound slightly to 1.9 percent and 2.2 percent respectively in 2014 and 2015. In Seychelles, the growth rate is expected to be above 3.5 percent in both 2014 and 2015 due largely to a rebound in the tourism sector. The outlook for the region, therefore, is generally positive, in spite of recent peace and security issues (in Kenya, Somalia and South Sudan) and political tensions that have grown in Burundi due to the run-up to 2015 elections. According to the Africa Development Bank, other developments in the region that add to the optimistic outlook include the significant progress that has been made in peace- and state-building in Somalia coupled with the country’s economic recovery programme, substantially supported by the international development community. Despite the years of conflict that devastated the economy and the dominance of the informal sector, the country also has a vibrant and dynamic private sector that can help accelerate growth. Inflation in most of the countries receded in 2013, compared with 2012, mainly owing to lower food prices, prudent fiscal and monetary policies (as the case in Ethiopia where inflation dropped from 20.5 percent in 2012 to a single-digit level of 7.4 percent in 2013), debt and expenditure management, and exchange rate stability. “Monetary policy in the region generally is expected to continue to be prudent and focused on macroeconomic stability, supporting economic growth and liquidity, and maintaining low and stable inflation,” reads part of the region’s economic outlook report. “Inflation rates are therefore projected to be within single digits in most of the countries in the region, with exceptions such as Eritrea, South Sudan and Sudan. Performance in the external sector was mixed but in most cases was marked by continued and widening trade and current account deficits.” Role of China It is also reported that China’s increased investments in Africa is a major concern for the west particularly, Unites States. China has become a major development partner of sub-Saharan Africa (SSA), as its trade, investment, and aid ties with the region have increased remarkably in recent years. According to a Working paper by International Monetary Fund (IMF) economic experts, Paulo Drummond and Estelle Xue Liu, China’s real GDP has grown by an average of 10 percent a year in the past decade, and so has its need to import an entire range of products—minerals, farm products, timber, and oil—to satisfy the fast pace of domestic investment, which increased fivefold in the same period. Its investment as a share of GDP increased from 34 percent in 2000 to 46 percent in 2012. China is now the largest single trading partner for SSA. Its stock of foreign direct investment (FDI) reached about US$16 billion in 2011; and China has stepped up its financial assistance to the region, including by announcing a credit line of US$20 billion to Africa during the latest conference of the Forum on China-Africa Cooperation (FOCAC) in 2012 and $2bn for Africa Development Bank in 2014. The increasing role of China in SSA reflects China’s increasing share as a major player in world trade and its historic reorientation toward new markets that started in the last decade, including toward SSA countries. Observers now envisage stiff competition for Africa’s natural resources by the growing economies in West and East. Integration East African Community (EAC) member states – Burundi, Kenya, Rwanda, Tanzania and Uganda –signed the “Protocol on the Establishment of the East African Monetary Union” on 30 November 2013. The ratification of the protocol is planned to be completed by the third quarter of 2014. The signature of this protocol signals the beginning of a ten-year process that is expected to culminate in an EAC single currency and the East African Monetary Union (EMU). The EAC member states are now expected to harmonise and co-ordinate their fiscal, monetary and exchange rate policies. Joining the EMU requires adhering to the macroeconomic convergence criteria for at least three years. However, it is important to note that regional integration, trade and industrial policies in the region are not yet attuned to global value chains due to high costs of production, numerous and complicated taxes and rules, and weak supply chains and linkages. Countries in the region will need to continue to improve their business enabling environment to further integrate into global value chains and improve the prospects of their long-term economic growth backed by foreign direct investments. Obama Ahead of the Summit, President Obama said he does see the countries and peoples of Africa as a world apart. “I see Africa as a fundamental part of our interconnected world – partners with America on behalf of the future we want for all of our children. That partnership must be grounded in mutual responsibility and mutual respect,” he said. President Obama who will in August welcome leaders from across the African continent to the Nation’s Capital for a three-day U.S.-Africa Leaders Summit – the largest event any U.S. President has held with African heads of state and government, will build on the President’s trip to Africa in the summer of 2013 and it is expected to strengthen ties between the United States and one of the world’s most dynamic and fastest growing regions. According to a briefing from White House, specifically, the August 4-6 Summit will “advance U.S Administration’s focus on trade and investment in Africa and highlight America’s commitment to Africa’s security, its democratic development, and its people.” It adds: “At the same time, it will highlight the depth and breadth of the United States’ commitment to the African continent, advance our shared priorities and enable discussion of concrete ideas to deepen the partnership. At its core, this Summit is about fostering stronger ties between the United States and Africa.” The theme of the Summit is “Investing in the Next Generation.” Focusing on the next generation is at the core of a government’s responsibility and work, and this Summit is an opportunity to discuss ways of stimulating growth, unlocking opportunities, and creating an enabling environment for the next generation. Throughout the U.S.-Africa Leaders Summit, African leaders will have an opportunity to engage with President Obama, his Cabinet members, and other key leaders, including business executives from the U.S. and Africa, Members of Congress, and members of civil society. Discussions will center on how to encourage progress in key areas that Africans define as critical for the future of the continent: expanding trade and investment ties, engaging young African leaders, promoting inclusive sustainable development, expanding cooperation on peace and security, and gaining a better future for Africa’s next generation. Giles Muhame
Posted on: Mon, 28 Jul 2014 08:26:37 +0000
Trending Topics
Recently Viewed Topics
© 2015