Remarks as Prepared for Rebecca Blank, Acting U.S. Commerce Secretary
Thank you. Good afternoon. It is wonderful to be here in Johannesburg with all of you. I want to thank our sponsors:
First, the Corporate Council on Africa, which represents nearly 85 percent of all U.S. investment on this Continent. Thank you, CCA, for continuing to work with us to raise the profile of Africa in the U.S. business community.
Second, Business Unity South Africa. Thank you for helping ensure that the private sector continues to play a constructive role in this nation’s growth.
I also want to thank Ambassador Don Gips, the U.S. Embassy staff, and the Foreign Commercial Service officers from the Department of Commerce who are based here, including Larry Farris. Thanks also to Undersecretary Francisco Sanchez and Assistant Secretary Michael Camuñez who continue to do such great work throughout Africa.
For decades, people around the world have talked about doing business in Africa. But today, it’s real. It’s happening. And Africa is rising as a result.
Just months after his inauguration, President Obama traveled to Ghana. He laid a foundation for the future of the U.S.-African relationship – a relationship based on mutual responsibility and mutual respect. He called for an era of deeper engagement among our leaders in government, business, and other sectors.
More recently, President Obama said he believes that Africa can be the world’s next major economic success story. He’s absolutely right. Sub-Saharan Africa is home to 6 of the 10 fastest growing markets in the world. Economic growth in this region is predicted to be strong – between 5 and 6 percent – in coming years. And – most importantly – millions of Africans are finding a path from poverty to greater security, opportunity, and prosperity.
The United States is committed to helping build on and accelerate this success.
Earlier this year, the President reaffirmed that commitment when he issued theU.S. Strategy Toward Sub-Saharan Africa.
This Strategy directs the U.S. to dedicate greater support for efforts to strengthen democratic institutions, while continuing both to advance peace and security in Africa, and to promote opportunity and development. But most importantly for all of us today, the Strategy commits the U.S. to elevating our efforts to spur economic growth, trade and investment.
But before I discuss this in more detail, let me recognize the successes of the past four years.
The Obama Administration has strengthened democratic institutions and challenged leaders whose actions threaten peaceful political transitions. We continue to support strong, transparent, democratic institutions that are guided by the rule of law.
The Administration has supported regional security, including the support for the peaceful birth of South Sudan, the African Union Mission in Somalia, and working with regional partners to counter the predatory Lord’s Resistance Army. We continue to promote regional stability and security because it is the right thing to do and because it is an essential element for continued growth.
The Administration has heavily invested in development partnerships that promote food security, increase resilience to climate change, and empower communities that are responding to HIV/AIDS, malaria, and other health threats. We continue to lead major efforts like the New Alliance for Food Security and Nutrition, which aims to lift 50 million Africans out of poverty in the next decade.
And, finally, under President Obama’s leadership, the United States has been the world’s leader in responding to humanitarian crises – such as the famine in the Horn of Africa.
Despite all of these successes, Africa’s dynamic growth and its increasing strategic importance demand that we deepen our engagement even more.
Sub-Saharan Africa, in particular, is experiencing rapid change. Internet and mobile technologies are dramatically shifting the way business is done – even while population expansion, political instability, and other challenges threaten the positive progress that many nations are making. But economic progress is clearly visible – private investments in Sub-Saharan Africa now exceed direct aid, thereby fostering long-term stability in both large and small countries.
This is our moment to work together to ensure that we both secure Africa’s gains – and build on them. And I believe strongly that one of the ways we can do that is for U.S. businesses to invest in Africa, and to believe – like we all do here – in Africa’s bright future.
That’s why the President’s Strategy to spur economic growth, trade and investment in Sub-Saharan Africa is crucial. Through it we want to support a business climate that enables and promotes trade and investment. We want to support efforts to better integrate Africa’s markets, allowing them to compete more effectively and transparently. We want to support African companies’ ability to access global markets and tap global supply chains. And, woven throughout these efforts, we want to promote Africa as a key destination for American investment and trade.
The good news is, the U.S. commercial and economic relationship with Sub-Saharan Africa has already begun to blossom. Two efforts are particularly praiseworthy in this regard.
First, the African Growth and Opportunity Act – AGOA – continues to support the flow of African goods to the U.S. More than ever before, American businesses and consumers are buying African products such as flowers, fruits, nuts, cocoa, footwear, and wine. Importantly, nonpetroleum exports under AGOA have tripled to nearly $5 billion. Compared to a decade ago, more than twice the number of eligible countries are shipping non-commodity goods under AGOA.
We are building on this by connecting even more African businesses – including small businesses – to global markets and supply chains. For example, the Commerce Department recently worked with X-Chem – a black, woman-owned AGOA exporter – to link her into the Walmart/Massmart supply chain. I believe Angela is here today.
And I was thrilled to see that three months ago, President Obama signed into law the renewal of the third-country fabric provision. This will ensure that we can continue to support apparel manufacturing in less-developed Sub-Saharan countries. This is especially helpful to women, who hold about 90 percent of these jobs.
Looking forward, the Administration will work with Congress to ensure that AGOA is renewed in 2015.
A second example of how commercial ties are already blossoming is President Obama’s National Export Initiative – an effort led by the Commerce Department.
President Obama set the goal of doubling U.S. exports from 2009 to 2014. As we know, the consumer class in Africa and throughout the world is growing, and demand for Made-in-America products has never been greater.
Right now, this Initiative is focusing on countries that are known to be stable, fast-growing markets, with significant commercial opportunities. South Africa, not surprisingly, is one of those. That’s why we are: increasing the number of trade missions, focusing our advocacy efforts on markets like this one, expanding our lending activities, and bolstering our overall engagement on trade policy.
As a whole – due to our efforts under AGOA, the National Export Initiative, and more – the U.S. and Sub-Saharan Africa reached $95 billion in two-way trade last year, an increase of 16 percent from 2010.
However, U.S. trade with Sub-Saharan Africa accounts for only 2.6 percent of U.S. total trade with the world. So, we are still far from reaching the full potential of U.S.-African trade – as well as investment. We can and must do more.
As Africa’s wealth increases, so does its demand for improved transportation, telecommunications, housing, energy, consumer goods, financial services, healthcare and more. American companies are poised to bring their entrepreneurial spirit, their expertise, and their know-how, to help meet that demand.
For all these reasons, I am thrilled today to announce the launch of the Doing Business in Africa Campaign.
And I’m pleased to be bringing a message from President Obama himself. He writes the following:
“Sub-Saharan Africa is a region of extraordinary opportunity for growth and economic development. That is why this June, I issued theU.S. Strategy Toward Sub-Saharan Africa, a plan aimed at strengthening democratic institutions; spurring economic growth, trade, and investment; advancing peace and security; and promoting opportunity and development in the region.
“To advance the goals of this strategy, and to deepen trade and investment between the United States and the nations of Sub-Saharan Africa, I am pleased to support the Department of Commerce’s “Doing Business in Africa” (DBIA) campaign.
“The economies of sub-Saharan Africa are among the world’s fastest growing, and this economic expansion—partly a result of our long-standing investment in Africa—provides an opportunity to lift millions out of poverty and foster long-term stability. Our challenge is to ensure these gains continue and spread, and to enable American companies and the African Diaspora to obtain the support they need to take advantage of these new trade and investment opportunities.
“Many American entrepreneurs and business leaders are unaware of the tremendous trade and investment prospects in sub-Saharan Africa or face challenges establishing business relationships in the region. The DBIA campaign seeks to change this by increasing awareness about key sectors and markets in Sub-Saharan Africa and opportunities to expand trade activities. The initiative promotes enhanced financing opportunities to bolster American exports and provides trade counseling and advocacy for entrepreneurs who want to tap into these growing and dynamic markets. The strategy also aims to further engage the African Diaspora community living in the United States to improve our commercial and economic ties with sub-Saharan Africa.
“Through the DBIA campaign, we are responding to the emergence of African regional economic communities, and working with our partners to deepen integration, reduce barriers to trade and investment, and support existing and new investments by American businesses. By doing so, we continue the work of creating jobs and expanding economic opportunity that will help drive our economy and support the growth of our African trading partners.”
I am pleased to share just a few of the many efforts that we are immediately undertaking as part of this new campaign.
First, the Commerce Department has a powerful network of U.S.-based Export Assistance Centers as well as Commercial Service Officers in strategic embassies around the world. Through this campaign, we are going to train these counselors on how to help businesses start or expand their exports to Africa. Importantly, we will also ensure that these counselors have timely information about new opportunities that are arising on this Continent.
Second, we will place a special focus on empowering the African Diaspora in the United States – one of the world’s largest. We know there is significant untapped potential for commercial interaction in these communities. We plan to reach out to the businesses in this community, making sure they not only know about opportunities… but that they can also find the tools they need to trade and invest in Africa.
Third, we will work with organizations such as CCA and the Business Council for International Understanding to launch a series of Africa Global Business Summits in the U.S. in 2013. These Summits will bring U.S. Ambassadors and commercial service officers from Sub-Saharan Africa back to the U.S. to share strategies and tips with entrepreneurs and business owners to help them successfully enter key markets.
Fourth, for the first time ever, we will partner with the State International Development Organization to train economic development leaders at the state and regional levels in the U.S., with a special focus on the opportunities and possibilities for doing business in Africa.
And fifth, we will bring business leaders to visit each others’ countries and find new opportunities, because more than anything else, mutual economic growth is dependent on person-to-person relationships. For example, I’m happy to know that next week, the U.S. Ambassador to Nigeria, Terrence McCulley, will lead a Nigerian business delegation to a number of U.S. cities to see some of our biggest trade shows. And here in this room, I am delighted to note that person-to-person connections are being made today. As part of a trade mission led by Undersecretary Sanchez, we have brought a diverse group of both small and large U.S. firms to Zambia and now to South Africa. These companies have traveled here because they have rightly discarded the old and false perceptions about Africa. They understand that the commercial opportunities in Africa are too compelling to ignore – and they want to help the Continent grow and thrive.
There are over a dozen on this mission, ranging from a Midwest-based agricultural and construction equipment manufacturer, to a Florida-based well-water treatment company, to a California company that integrates GPS and laser technologies with application software and wireless communications.
Could all of the companies that are on this mission stand and be recognized? [I hope your conversations here in Africa are fruitful.]
I have one final announcement to make as part of the Doing Business in Africa campaign – and it’s related to the important area of financing.
I am traveling today with leaders from the Overseas Private Investment Corporation, the U.S. Export-Import Bank, and the U.S. Trade and Development Agency. Each of these agencies has dramatically increased their investments and activities in Africa in recent years.
In the past four years, OPIC has committed more than $2 billion in financing, insurance, private equity, and other support to Sub-Saharan Africa. In the past year alone, Ex-Im Bank supported $1.4 billion in authorized transactions with Sub-Saharan Africa. And USTDA has conducted studies, workshops, and reverse trade missions, while also supporting over $1 billion in U.S. exports in partnership with African project sponsors.
So thank you for all that these agencies are doing here in the region.
All of us here know that having energy in people’s homes and businesses is crucial to development. We also know that Africa has abundant clean energy resources just waiting to be harnessed.
Notably, the South African government has made extraordinary progress in this regard. It has increased access to electricity from 15% of the population to about 85 percent today, making it a leader in Sub-Saharan Africa. Yet there is more to be done both here and throughout the region.
Here’s our key challenge. One of the main obstacles to accelerating clean energy investment in Africa is an inability to fund project development costs. Even projects that have clear potential for broad impact and strong financial returns to investors often fail to secure financing.
So, as part of the Doing Business in Africa campaign, I’m pleased to announce today that the Obama Administration will work through these agencies – OPIC, USTDA, and Ex-Im – to establish the new U.S.-Africa Clean Energy Development and Finance Center.
The Center will operate out of the U.S. Consulate General here in Johannesburg. Its mandate is two-fold: to help implement clean energy projects in Sub-Saharan Africa, and to promote U.S. private-sector participation as this sector continues to grow.
Specifically, the Center will provide technical and financial support for projects related to solar, wind, biomass, geothermal, hydro, ocean and natural gas.
Starting in March, Peter Ballinger will be spearheading this effort as OPIC’s representative in Africa – working side-by-side with Larry Farris as well as Jason Nagy of USTDA, also here today. And I should note that Peter will be the only OPIC employee not based in the United States. Congratulations Peter, and thank you all in advance for the work you will be doing. [I should note that in a few moments, you will be hearing from a panel of our agency partners who will discuss this and other efforts.]
So, the Doing Business in Africa campaign starts now. We have no time to waste.
In fact, this afternoon I will be meeting with the U.S. Chiefs of Mission stationed in several countries: including Ambassadors Gips of South Africa, Cretz of Ghana, Gavin of Botswana as well as Deputy Chief Fox of Lesotho. They are here today, and I want to thank them for serving as crucial partners and advocates for this campaign.
In the coming days, months, and years, even more Administration officials will be working and traveling to raise the visibility both of this campaign and of the U.S. Strategy overall.
I, myself, will be going to Nairobi tomorrow for the East African Community’s annual heads of state summit. We will be working with the EAC – among other things – to establish a regional investment treaty, to provide trade-capacity building assistance, to build a more open and predictable business climate, and to launch the EAC-U.S. Commercial Dialogue – America’s first Commercial Dialogue in Africa.
Overall, we must continue to find new ways for both business and government leaders throughout the U.S. and Africa to form powerful linkages that lead us all to greater prosperity.
And as I look around this room, I am confident of what we can achieve – together. It is significant that we are launching the Doing Business in Africa Campaign here in South Africa with all of you – in a country where U.S. companies have strong ties, as evidenced by those represented here. This nation has grown and diversified its economy and it serves as a crucial gateway to the rest of Sub-Saharan Africa.
You have already paved the way for the success and prosperity of businesses, workers, and citizens on both sides of the Atlantic.
And yes, as our new campaign confirms, U.S. firms are excited to be doing business throughout Africa from the Kentucky-based, water pump company now working with a South-African distributor to help small towns curb pollution, to major U.S. firms like GE which is supplying Kenya Airways with 20 jet engines for their new planes.
We want more stories like those.
Let me close with a quote from Nelson Mandela. Mandela once said: “After climbing a great hill, one only finds that there are many more hills to climb.”
The U.S. and Africa have reached a wonderful moment – a moment where we are working with each other, learning from each other, and building on each other’s prosperity – every single day.
As commerce flourishes between us and as our nations become more intertwined economically, it feels as though we have indeed reached the summit of a great hill.
Now, let us press on. Let us continue our journey together. And let us ensure that the United States is a strong partner in the rising prosperity of Africa in the 21st century.