EAC bloc set to benefit from new initiative with better trade, more AGOA benefits
Uganda's business sector is set to get a significant boost, following the launch of the "Doing Business in Africa" campaign, a US initiative aimed at helping American businesses identify and seize opportunities on the African continent. The campaign, which was launched on Nov.30, is an important element of President Barack Obama's new strategy toward Sub-Saharan Africa, according to Dr. Rebecca Blank, the acting US Secretary of Commerce.
In a briefing from South Africa to journalists across the continent via conference call, Blank, who visited the continent from Nov.26-30, said the effort would leverage the US's trade promotion, financing and strategic communications capabilities to help American-based businesses identify and seize opportunities in Africa, and to help them overcome any challenges they face to establishing a business relationship in Africa.
"The 'Doing Business in Africa' Campaign will be an unprecedented, whole-of-government approach to promote more US trade with Africa, to spur greater trade financing, and to reach out to key groups such as the African diaspora within the US," she said. "The overarching goal is to dramatically strengthen US commercial, trade, and investment ties with sub-Saharan Africa - a critical part of the President's Strategy" She added.
"Overall, the 'Doing Business in Africa' campaign is about finding new ways for both business and government leaders throughout the US and Africa to form powerful linkages, strong partnerships, that lead us all to greater prosperity." As part of the programme, the US plans to host a series of Africa Global Business Summits comprising experts who know the best strategies for entering the African market, and to promote trade missions and business interactions from both the US and from Africa.
Additionally, financing will be made available to US companies seeking to do business in Africa, especially in critical growth sectors like renewable energy. In the summits, US ambassadors based in Africa will be put in touch with US enterprises that are interested in investing or expanding their work in Africa to talk about possibilities in Africa as a potential place for investment and trade. Blank suggested that American business leader will be made to appreciate the fact that Africa has a growing middle class, which is increasingly demanding good and higher quality products.
Also 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, according to Blank. She said with Internet and mobile technologies dramatically shifting the way business is done and economic progress is clearly visible on the continent.
"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 US businesses to invest in Africa, and to believe - like we all do here - in Africa's bright future," she added.
Talks with EAC leaders about their Trade and Investment Partnership were also a key item on Blank's agenda on the continent. During the June 2011 AGOA Forum in Lusaka, Zambia, the US proposed the new partnership with the EAC to include the exploration of a regional investment treaty, creation of trade enhancing agreements in areas such as trade facilitation, and the development of stronger commercial engagement.
This new partnership would build on the foundations of the existing trade and investment relationship, including the African Growth and Opportunity Act (AGOA), and the US-EAC Trade and Investment Framework Agreement (TIFA). Under this new partnership, the US and regional bloc aim to provide new business opportunities to US and EAC firms by reducing trade barriers, improving the business environment, encouraging open investment regimes, and enhancing two-way trade, which has historically been lopsided. For instance, US trade with Sub-Saharan Africa accounts for less than 3% of US total trade with the world, which officials said necessitated "more work to be done."
The initial items agreed upon to explore under this new umbrella partnership in the EAC include a regional investment treaty, a trade facilitation agreement, continued trade capacity building assistance, and a commercial dialogue. These agreements and other activities are expected to help to promote EAC regional integration, economic growth, and expand and diversify US-EAC trade. The US hopes to build on AGOA, which Uganda is yet to fully benefit from for various reasons.
Uganda's export earnings under the initiative amounted to $59m in 2011 and $15m in the first half of 2012. In the EAC, Kenya is getting the lion's share of the AGOA benefits with the country's export earnings standing at $480m in 2011. Blank said the US 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-US Commercial Dialogue - America's first Commercial Dialogue in Africa."