A continent of opportunities

In the wake of a new World Bank report that shows the once-desperate sub-Saharan is now among the fastest-growing global economies, the administration of President Barack Obama is stepping up its drive to promote American exports to the region.

US Secretary of State Hillary Clinton delivers
a speech on August 8, 2012 at the University
of the Western Cape in Cape Town
Photo: AFP/Getty Images

This summer, Secretary of State Hillary Clinton went on an 11-day tour of the vast area south of the Sahara Desert, including a visit to South Sudan, a country barely a year old.  Business Without Borders has previously written that Obama lifted sanctions in the country for Planson International Corp. to provide computer equipment for South Sudan’s first ever election, held last year. Maine-based Planson won the 2011 Sub-Saharan Africa Exporter of the Year award from the Export-Import Bank of the United States.

“Sub-Saharan Africa is a continent of opportunities for U.S. businesses with overall projected growth rates of approximately 6% in 2012 – some of the highest in the world. In looking at the world’s 10 fastest-growing economies from 2001 – 2010, six were in Africa,” said Nicole Y. Lamb-Hale, Assistant Secretary for Manufacturing and Services in the International Trade Administration.

“This trend accelerates in 2011-2015, with seven of the 10 world’s fastest-growing economies being in Africa,” she told a recent Washington conference promoting sub-Saharan trade opportunities.

According to the World Bank’s report, Doing Business 2012: Doing Business in a More Transparent World some 36 out of 46 economies in sub-Saharan Africa improved business regulations this year, a record number. In addition, of the 12 world-wide countries that improved the most in the ease-of-doing-business annual study, with improvements made in three or more areas, four are in the sub-Saharan African region. They are São Tomé and Príncipe, Cape Verde, Sierra Leone and Burundi.

But it wasn’t just the World Bank report that has spurred on U.S. interest in sub-Saharan Africa. The U.S. has been actively promoting increased export opportunities in Africa since Obama’s 2010 National Export Initiative, in which he laid out a goal to double exports, now about $1.3 trillion a year, by 2015.

The Department of Commerce led a trade mission of 19 companies to South Africa last fall, and another trade mission to South Africa and Zambia is planned for this November. In February of this year, the State Department also led an energy trade mission to Mozambique, Tanzania, Kenya, Nigeria and Ghana.

“These missions are ideal opportunities to encourage private sector linkages, which in turn underscore economic development as a path towards prosperity, sustained economic growth and increased trade and investment,” said Lamb-Hale.

But she admitted that despite improvements in the region, there are still major market barriers for U.S. exporters. “The challenges to doing business in this part of the world are well-known – graft and corruption, weak legal frameworks, customs issues, weak enforcement of intellectual property rights and lack of infrastructure, among others,” she said.

“The Department of Commerce works diligently on behalf of U.S. companies to not only help U.S. businesses pursue opportunities, but also to facilitate the elimination of these barriers,” she said.

Clinton visited eight countries during her tour, including South Sudan, Uganda, Kenya, Malawi, South Africa, Nigeria and Benin. Her visit began in Senegal, a small country on Africa’s west coast that is described as an outpost of democratic stability in a region with a history of electoral chaos, civil wars and coups.

The November U.S. trade mission will focus on South Africa, a middle-income country with abundant natural resources and established financial, legal, communications, energy, and transport systems. It has the largest economy in Africa.

Zambia will also be included in the mission. The country has a record of political stability since independence in 1964, including multi-party elections since 1991. The U.S. administration said Zambia has had positive economic growth for 11 consecutive years, including more than 6% growth on average for the past five years.

At the same time, the U.S. is stepping up efforts to push exports in the western hemisphere, especially Latin America.  “The Obama administration is committed to encouraging trade and investment with Latin America, a region that offers huge growth potential for U.S. companies,” said Francisco Sánchez, UnderSecretary of Commerce for International Trade.

In 2011, U.S. merchandise exports to Latin America totaled $347 billion. The 54% increase in exports to the region since 2009 far exceeds the average export growth rate of 36% to the rest of the world.

The U.S. now has new free trade agreements with Colombia and Panama and is part of the Trans Pacific Partnership (TPP) talks that will now include Canada and Mexico. Other countries in the TPP are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.