Why Africa’s Economic Development Is Important To American Companies
On former President George W. Bush’s trip last month to Africa, he underscored the importance of sustaining American foreign assistance programs in sub-Saharan Africa. He pointed to the success of health programs like the President’s Emergency Plan for AIDS Relief and Pink Ribbon Red Ribbon in saving and improving millions of lives.
Economic development initiatives in Africa likewise are critical to the stability of the region. Similarly, they are in America’s interest when they open markets to our goods and create prosperous economies.
A good example is the African Growth and Opportunity Act, which Congress passed in 2000. Targeted at Sub-Saharan Africa, the program fosters market-based economic growth and develops trade relationships by providing eligible nations duty-free access to the United States for certain products. AGOA ensures African entrepreneurs can take advantage of access to the U.S. market at no cost to U.S. taxpayers.
From Pittsburgh Post-Gazette. Story by Natalie Gonnella-Platts and Laura Collins.
As good as the program has been, it is not enough. Changing circumstances and impressive investments by China necessitate the United States increase its economic engagement in sub-Saharan Africa. This means broadening eligibility, opening additional sectors of the U.S. market and strengthening programs that encourage sustainable economic growth.
Efforts like these have their skeptics, but here are three reasons increased economic investment in Africa matters for the United States:
Sub-Saharan Africa experienced strong economic growth in the years since AGOA passed. For example, average GDP growth in the region was two points higher than the world average from 2001 to 2013. The growth also was significantly higher than in the decade before AGOA was passed.
What’s more, the World Bank predicts even greater growth for a rapidly developing region that is ripe for more foreign investment. Not surprisingly, other nations have taken note.
China particularly poses a serious threat to Africa’s development and the U.S.-led global economic order. Unlike U.S. assistance, China’s engagement does not encourage African governments to fight corruption, work for gender balance, promote fiscal sustainability or strengthen regional economic integration.
Read more at Pittsburgh Post-Gazette.