Trade rather than aid. That is the shift the United States is making in Africa as the powerhouse expands into the continent. According to Donald Nay, regional senior commercial officer sub-Saharan Africa for the US Commercial Service, this is the approach taken by United States President Barack Obama who in the past few months has committed billions of dollars in trade and investment to the continent. “More and more we are looking to shift the US focus in Africa toward fostering investment and trade, rather than the traditional emphasis on providing aid,” he told FTW. This was highlighted at a business forum earlier this year when President Obama met with African heads of state. “The need for African leaders to work on factors that encourage investment and economic stability such as governance and rule of law, expanding trade, and steps to deepen security cooperation has been highlighted. While access to capital is important, the emphasis is on accountability and transparency among African governments to promote and expand US-Africa trade.” According to Nay, sub- Saharan Africa has been identified as a key market for the US which is set on expanding the export of its goods and services. “This will facilitate efforts to bolster African economic development through increased global, regional and bilateral trade. Sub- Saharan Africa presents many opportunities for US businesses as an emerging market for American exports,” he said. With seven of the ten fastest growing economies in the world in sub-Saharan Africa it has become necessary for countries across the world not only to have a presence in the region, but also to explore ways of increasing their activity. “Some of the key benefits of international trade for sub-Saharan Africa are of course greater domestic competitiveness, access to modern technology, and enhanced economic success, especially for small- and medium-sized enterprises (SMEs),” said Nay. While the World Bank has suggested that domestic constraints and a tightening global environment may have a moderating effect on growth in the medium term in Africa, Nay said it remained a region on which the US would focus. “Despite emerging challenges, mediumterm growth prospects for sub-Saharan Africa remain favourable,” he said. “Regional GDP growth is projected to remain stable at 4.7% in 2014, strengthening to 5.1% in each of 2015 and 2016, supported by net foreign direct investment (FDI) flows in the resource sectors, public investment in infrastructure and improved agricultural production.” At the same time the strengthening recovery in high-income countries bodes well for export demand and investment flows, although weaker commodity prices and slower growth in emerging markets will moderate growth of FDI flows to the region to $32.5 billion in 2014, from $31.9 billion in 2013. “Nevertheless, this would support growth in many countries. Besides FDI, the continued focus on expanding public infrastructure to ease supply bottlenecks is expected to provide further impetus to growth in the region,” he said. INSERT & CAPTION Continued focus on expanding public infrastructure to ease supply bottlenecks. – Donald Nay
