Washington has committed $55bn to Africa. Does the US-Africa summit signal an American sea change?

Washington has committed $55bn to Africa. Does the US-Africa summit signal an American sea change?
President Biden is hosting leaders from across the African continent in Washington, DC on December 13-15, 2022, for the U.S.-Africa Leaders Summit. / bne IntelliNews
By Marco Cacciati in Berlin December 14, 2022

On the eve of the three-day US-Africa Leaders Summit in Washington, DC that kicked off in Washington, DC on December 13, the White House pledged $55bn for the continent over the next three years. Could it be the dawn of a new era?  

The summit, which wraps up on December 15, aims to “demonstrate the United States’s enduring commitment to Africa, and underscore the importance of the US-Africa relations and increased cooperation on shared global priorities”. But then so did the first such event, held in 2014.

Somewhat anticipated by the U.S.-Africa Business Summit held in Marrakech last July, has attracted more than 40 African heads of state and government. Excluded were Burkina Faso, Guinea, Sudan and Mali (all suspended from the African Union due to recent coups), Eritrea (which does not have diplomatic relations with the US), Western Sahara and Somaliland (not recognised as a state by the US).

In terms of business potential, it should be self-evident that Africa can not be ignored on the global stage. The continent has a potential market of 1.3bn, and a combined GDP of $2.6 trillion. Its population is expected to reach 2.5bn by 2050, making Africa the world’s fastest-growing region.

The continent is, of course, also rich in oil and gas deposits, key as the Western world seeks alternative suppliers to Russia even as global leaders pledge to cut greenhouse gas emissions. It is also rich in the minerals key to making a transition to zero-carbon.  

When running to win the White House, Joe Biden’s campaign committed to implementing a “bold strategy” towards Africa that would be based on a “mutually respectful engagement” and reinvigorated diplomacy.

The US-Africa Leaders Summit, reportedly organised at Biden’s request, comes at a time of international political and financial turmoil, and the Russia-Ukraine war, whose spillover includes soaring prices of food, fuel and fertiliser in Africa, along with a renewed battle for hearts and minds on the continent not seen since the Cold War.

Africa is still reeling from the impact of the COVID-19 pandemic, which destabilised the continent’s developing economies. The nefarious effects of climate change are also strongly felt on the continent, particularly in the Horn of Africa and Sub-Saharian regions, where prolonged droughts have led to widespread food insecurity and pockets of outright famine.

The recent COP27 conference, held in Sharm-El-Sheik, was in many aspects disappointing, but it did produce the milestone “loss and damage fund” agreement, aimed at guaranteeing financial compensation to the nations most vulnerable to the climate crisis, such as the African countries that, conversely, contribute the least to global warming.

Still, the situation is alarming: according to the Red Cross, 146mn people are currently going hungry on the continent as a result of the largely impacted regional agriculture. This means large swaths of Africa are forced to rely almost exclusively on food imports.

Russia’s war on Ukraine, indeed, made things worse by stripping the continent of two pivotal suppliers of staple crops and fertiliser. The “Black Sea Initiative” brokered by the UN last summer only partially restored such trade, which is still very far from the pre-war levels.

Against this backdrop, the Biden Administration is trying to convince African countries that its aid and development plan is the most reliable in the long term, not least to curry their favour in support of the Ukrainian cause.

African nations have proved reluctant to vote for US-led resolutions against Russia in the UN. This stance transcends post-colonial resentment towards the Global North, and rather points to Africa’s yearning for a multipolar world, where Russia and China – countries that invested considerable resources in the continent over the last decade – deserve due recognition.

African leaders have repeatedly made it clear that the Russia-Ukraine war must end, come what may, preferably with a diplomatic solution – not necessarily one that respects Ukraine’s territorial integrity, as the West wishes.

Washington’s first organic initiative for Africa was called AGOA (African Growth and Opportunity Act) and was enacted in 2000 by former President Clinton. Officially, that plan is still in place today, due to expire in 2025. However, it hasn’t been updated in years, and African nations have expressed mixed feelings while assessing the plan’s results.

The political instability that plagued America in recent years further harmed Africa’s trust in the US; President Trump de facto put AGOA on hold during his tenure, pursuing only a few separate trade deals with selected African countries, namely Kenya in 2020.

Such an attitude – coherent with then President Trump’s “America First” mantra – irritated many governments in the region, which felt abandoned by the US while China racked up investments – becoming the continent’s largest trading partner – and Russia-backed militias successfully intervened in Mali (where the French military left all of a sudden) and Libya against radical Islamists.

Obama (with Biden at his side) timidly tried to restore ties with the continent, convening the first US-Africa summit in 2014. However, until today no news followed on the American side, while Russia, China and even the EU kept organising similar conferences on a much more regular basis.

Judd Devermont, senior director for African affairs from the National Security Council, said: “The gap between 2014 and 2022 certainly is regrettable. And so we’ve had, I think, a number of conversations with our partners and with counterparts in our own government about first and foremost making sure that whatever comes out of this summit is going to stay here for the long run”.

Biden must have finally felt the pressure to convene a new summit, perhaps spurred by the urgent need to convince African countries to support US sanctions against Russia (and counter the growing influence of China).

To further sweeten the pot, ahead of the historic summit, the White House pledged $55bn in economic, health and security support for Africa over the next three years “across a wide range of sectors to tackle the core challenges of our time,” as National Security Advisor Jake Sullivan put it.

Africa’s challenges are numerous and pressing: food insecurity, health, climate change and military conflicts are first on the summit’s discussion board. On the business side, debates at the summit will touch on the economic hurdles facing investors on the continent, such as limited access to capital, high cost of financing and legal and regulatory bottlenecks.

Human rights don’t appear high on the agenda, though movement on that score yet may come, perhaps due to the White House’s desire to keep thorny topics at bay while ensuring the $55bn pledged remain in the headlines of African media.

America is fiercely competing for influence with China and Russia. What sets the US apart from its rivals – and could thus be its crucial leverage – is its ability to foster public-private partnerships between American and African economic actors. This approach should walk in lockstep with the African Union’s “Agenda 2063” plans, helping to meet the continent’s ambitious targets concerning infrastructure, connectivity and a more balanced energy policy leaning towards the green transition.

“It’s really about focusing US Government resources to support the private sector, which is the driver of transformation, of change, of trade, of being very forward-leaning” said Camilla Richardson, Deputy Assistant Secretary for the Middle East and Africa, Department of Commerce.

America’s committed support for AfCFTA (African Continental Free Trade Area), the world’s largest free trade area by population that entered into force in January 2021, has to be viewed in this perspective. The US is looking at all the “ways that we can use AGOA to support the development of the free trade area, which holds so much promise for the continent”, as Molly Phee, assistant secretary of the Bureau of African affairs, put it.

The stakes are high, and so must be the African representatives’ expectations. The outcome of the summit may not be fully grasped for weeks or months to come, but one thing is already clear: America has woken up. Biden has realised it’s time to start dealing with African countries on the basis of mutual respect and shared values, rather than with the old-school – and counterproductive – paternalistic approach.