Washington — The world has a new image of Africa as a continent of progress and promise, and trade lies at the heart of its economic resurgence, a senior State Department official told global leaders.
In prepared remarks to the World Economic Forum in Pretoria, South Africa, May 14, Under Secretary of State for Economic Growth, Energy, and the Environment Robert Hormats said the continent is reaching "a huge turning point" in what has been a hard-fought battle against poverty and corruption.
"Africa is booming in nearly every sector, ranging from massive energy developments in Mozambique, Tanzania, Ghana and other countries; to the growth of Rwanda and Kenya's information and communications technology sectors; to South Africa's thriving auto industry," he said.
Hormats said the International Monetary Fund has predicted that economic growth in sub-Saharan Africa will surge to 6.1 percent in 2014, which is well ahead of the 4 percent average growth expected for the rest of the world.
Enhanced trade will benefit African countries and the United States, and the Obama administration is supporting a multilateral trade facilitation agreement through the World Trade Organization that would commit member countries to expedite the movement, release and clearance of trade goods, as well as improve customs cooperation, he said.
A trade facilitation agreement "would be a win-win for all parties -- Africa especially," he said, by offering a "glide path" to increased trade on the continent.
Trade between many African countries is still hindered by lengthy and expensive processes to clear exports and imports, and Hormats said Ghana's recent reforms offer an example of how trade facilitation tools and policies will help.
Ghana has decreased the cost and time of cross-border trade by 60 percent since 2003 and has increased its customs revenues by 50 percent during the same period, he said.
Hormats said the African Growth and Opportunity Act (AGOA) is the cornerstone of the U.S. trade relationship with sub-Saharan Africa, and it is providing African countries with the most liberal trade access to the U.S. market of all American trade preference programs.
Under AGOA, African exports to the United States grew to $34.9 billion in 2012, which includes a tripling of nonpetroleum exports since 2001, he said. For example, the United States has now become South Africa's main export country for passenger cars.
"Although progress has been made on diversifying exports beyond energy, there is much more to be done," he said. "African ingenuity and entrepreneurship must be unleashed to drive innovation and growth throughout the continent. This requires closer integration to share ideas, transfer knowledge and partner on solutions."
Overall, the U.S. vision for global trade in the 21st century is a more inclusive system that "recognizes the new realities of economic interdependence and matches increased participation in the global trading system with increased responsibility for the global trading system," he said.
Africa is featured in the U.S. trade vision, and enhanced economic ties are good for both, he said.
"We have a common interest and a common goal," Hormats said.