Dubbed the trip to his father’s homeland, Obama’s visit this past week to Kenya, Ethiopia and other parts of Africa has long been overdue. As a president whose roots were inherited from Africa, his relationship with that continent has been dismal on all corners—in the areas of human rights, political instability, corruption and most importantly economic development. As an African (which I am), or as any African will tell you, I find it appalling that in his sixth year as president, he’s now addressing these issues.
As the leader of the so-called Free World, having that type of power should have given him a great platform to speak out on these issues. To date, his predecessor George W. Bush has a better record in engagement with this discussion. But both have failed to improve economic development, foster growth and tap into the enormous talent and growing middle class that Africa is known to possess.
The main focus of his trip, which concluded Tuesday, was to boost U.S. investment in Africa in the areas of education, energy, entrepreneurship and counter-terrorism. Along for the ride were five members of the congressional black caucus and over 100 private sector investors—including CEO’s of Airbnb and Shark Tank investors. U.S. investment into Africa has been lacking for decades; the relationship has mainly focused on governance rather than a mixture of governance and economic development. America has been quick to speak up against political instability in the Congo, Burundi, Egypt, Libya and Nigeria, to name a few, but has underestimated the buying power of Africa and its middle class.
Brazil, India and China began their inroads into Africa decades ago. Today, China is the biggest foreign direct investor (FDI) in Africa, boosting over $200 billion in investment, so much so that Chinese state media made fun of Obama when he talked about investment.
“To get a sense of how badly the United States is behind, consider a few key indicators. In 2013, for example, trade between China and Africa totaled roughly $200 billion, with Chinese electronics goods and textiles flowing into African nations, while African natural resources were shipped off to China. Remarkably, Chinese-African trade was more than double the trade level between the United States and Africa,” wrote John Burnett for U.S. News. Obama’s efforts last year in hosting a summit for leaders of several African countries, and pledging 14 billion in investment, has been called “a pittance” or a drop in the ocean compared to China.
There are questions about China’s motives and quality of investment in Africa that have to be addressed thoroughly, but it is worth mentioning that China has been more aggressive in respecting the buying power of the African continent and should serve as a source of concern for U.S. companies who are looking to increase sales beyond the traditional buying zones of America, Asia and Europe. According to most economists, including World Bank and IMF, Africa has the fastest growing middle class and boasts seven of the 10 fastest growing economies in the world.
I am reminded of the AT&T commercial depicting the announcement of a Taco Tuesday, in which an employee receives an invitation hours after the event has started.
Except the delay in U.S. investment shows a lack of respect for the talent and abundance of labor and entrepreneurship that we continue to see across Africa.
If the premise of fostering diplomatic relations with Iran and Cuba is that it will somewhere foster democracy, improve human rights and connect to a globalizing world, then this strategy ought to be used in Africa as well. Yes, there are issues of political instability, corruption and human rights. To improve these issues, our strategy should not be to reduce economic development and partnership in Africa. When we engage with Africa through economics, it opens the door for other issues to be solved.