Trump’s Africa initiative to be unveiled next month: Still a work in progress

When Donald Trump’s National Security Advisor John Bolton unveiled the long-awaited Africa Strategy of the Trump Administration on 13 December, 2018 to an over-capacity crowd at the Heritage Foundation, the reception — including mine — was pretty grim.

In dark and foreboding tones, Bolton warned, “Great power competitors, namely China and Russia, are rapidly expanding their financial and political influence across Africa. They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States.”

Others have advised the same, just articulated it differently. French President Emmanuel Macron said “the future of the world will largely be played out in Africa.” 

Bolton referred to the predatory practices of China through its state-directed Belt and Road Initiative (BRI), which links China and some 65 other countries that account collectively for more than 30 percent of global GDP, 62 percent of population, and 75 percent of known energy reserves. Bolton blamed the BRI for saddling countries with unsustainable debt.

But in Washington, DC it’s important to look past the political theatrics for hints of a policy that lies beneath. Half-way through the adverb-laden text, Bolton said, “we are developing a new initiative called ‘Prosper Africa’ which will support U.S. investment across the continent, grow Africa’s middle class, and improve the overall business climate in the region.”

When I asked a U.S. government official at the event’s close if he was disappointed with the lack of specificity behind Prosper Africa, he said, “No, we got exactly what we needed from the NSA (National Security Advisor), a White House Africa policy, formally announced. The rest will come.”

And six months later it has.

On 18 June, in Maputo Mozambique, the content of Prosper Africa will be disclosed by U.S. Secretary of Commerce Wilbur Ross on the margins of the annual summit of the U.S. Corporate Council on Africa (CCA).

This will be Ross’ second trip to Africa; the first was in July of last year, where he led a mission of the President’s Advisory Council on Doing Business in Africa (PAC-DBIA), and  signed a MOU with Ghana’s Minister of Finance to connect U.S. businesses with priority Ghana investment opportunities.

In remarks to business leaders in Accra, foreshadowing the policy to come, Ross cited statistics that showed a decline in U.S. exports to Africa, and a reduction in overall U.S.-Africa trade and called it an “an embarrassment” for both the U.S. government and its private sector. “The US needs to step of its game in Africa,” he told the group.

Indeed, the lost opportunity cost is enormous for American industry when one looks to the future of a continent which is projected to exceed $5.6 trillion in market opportunities and a population of over 1.52 billion consumers by 2025. 

According to a one-page fact sheet, in PDF format, from the U.S. Agency of International Development (USAID) entitled, “PROSPER AFRICA – A US Presidential Initiative,” Prosper Africa is a whole-of-government economic initiative with the intent to double two-way trade and investment between the United States and Africa.

A working group, co-led by USAID and the Department of Commerce, coordinates the 15 U.S. government agencies involved in the execution of the initiative. This will change when the White House names a permanent coordinator for the program.

Prosper Africa is modeled after the Obama Administration’s Power Africa, a USAID transaction model bringing together technical and legal experts, with private sector and governments to increase access to power — a goal of 60 million new connects and 30,000 Megawatts. Power Africa has maintained support during the Trump Administration, despite deep cuts in foreign assistance because of its success in facilitating deals, and the broad-based, bi-partisan constituency it has built.

As such, Prosper Africa is being coined by some, “PA^2” — seeking to replicate the power model across multiple sectors and industries.

Prosper Africa also aims to create an enabling environment for foreign direct investment, through working with partner nations to address policy, regulatory and logistical barriers to trade and investment, including encouraging transparency, good governance and sustainable macroeconomic management.  

The administration is expected to step-up its commercial diplomacy with the establishment of “Deal Teams” in the 50 plus U.S. embassies in Africa.  Assistant Secretary for Africa Tibor Nagy said at a Congressional hearing in May, “we are weaponizing our embassies in Africa to confront China.”

The American investor toolkit will also be boosted with the transitioning of the Overseas Private Investment Corporation (OPIC) into the US Development Finance Corporation (USDFC) in October 2019, doubling its lending authority, and by the re-establishment of a quorum at the Export Import Bank (EXIM), permitting it to approve transactions of more than $10 million.

Prosper Africa is a much-welcome recognition that African and American prosperity and security go hand in hand, and it’s about time that the U.S. stated — explicitly and in policy — that we are losing ground to our geopolitical competitors in Africa, not just to China and Russia, but to Turkey, Brazil, India, the Gulf States, France and others. 

Further, naming a White House coordinator will give the initiative visibility, as well as setting specific targets for trade and investment, accountability. But all being said, there are two fundamental challenges that must be addressed for PA² to succeed.

First, the money. The 2020 Fiscal Year (FY) budget allocates only $50 million to the initiative, any other monies must be found in the reprogramming of unspent 2019 FY funds. Having to go agency to agency looking for handouts, is not a recipe for success, nor is putting additional burdens on U.S. embassies overseas without extra staff and resources. As CSIS suggests, the initiative requires financial backing from the U.S. government; otherwise, it risks being a statement of good intentions.

The second flaw is more fundamental: The absence of an articulation of the importance of democracy and respect for human rights within a policy that seeks to foster fair and accessible business climates for American companies.

It is a fact that Foreign Direct Investment is drawn to, and succeeds in, environments where democratic institutions, transparency and rule of law exists. We cannot challenge our geopolitical competitors in Africa on deal points alone, we must likewise lead with our values, particularly so on a continent where a youth-driven activist generation is demanding democratic change.

Prosper Africa is a work-in-progress, and as such, it can be tweaked and adjusted. That’s good news. Because there’s always the 2021 FY budget to properly resource the initiative, and there are programs the White House can download for free to edit that PDF.

NOTE: This post has been updated from the original to correct the name of the US Development Finance Corporation (USDFC).

K. Riva Levinson is president and CEO of KRL International LLC, a D.C.-based consultancy that works in the world’s emerging markets, award-winning author of “Choosing the Hero: My Improbable Journey and the Rise of Africa’s First Woman President” (Kiwai Media, June 2016). You can follow her @rivalevinson