U.S. Secretary of State Hillary Clinton says African governments must do more to fight corruption and encourage cross-border commerce to better benefit from U.S. trade preferences.
Secretary Clinton says the Obama administration is committed to extending trade preferences under the African Growth and Opportunity Act. But renewing that duty-free access requires everyone involved to decide whether they are willing to do what’s necessary to make the most of those benefits.
"A business is only as successful as the environment in which it operates. A shipping company cannot thrive if it’s overwhelmed by government regulations and drowning in paperwork. Buyers and sellers can’t do business if they are harassed by corrupt officials. A strong economy requires a supportive business climate that empowers every entrepreneur,” explained Clinton.
Secretary Clinton says Africans face long-standing obstacles to diversifying AGOA exports that are still dominated by textile and oil products. "Trade officials are under pressure to protect their own home-grown industries. Government leaders of smaller countries are concerned that larger countries will gain too much influence. Business owners worry about losing out to competitors across the border. Now these are not problems unique to Africa, but they have a disproportionate impact on Africa,” she said.
She says it is ultimately up to Africa's leaders to decide whether they have the political courage for greater economic integration. "It does mean you have to take on entrenched interests and respond to concerns about new competition, while making the case over and over again as to why the people in your country will benefit from expanded trade. I know this is difficult. Although I am out of politics now, I understand how hard it is to tell a longtime supporter something he doesn’t want to hear. But sometimes it’s the right and important thing to do,” said Clinton.
Secretary Clinton spoke at the close of a forum on the AGOA trade preferences that have been the cornerstone of U.S. investment in Africa for more than ten years.
Business and civil society leaders at the meeting called on the Obama administration to do more to encourage direct investment in Africa.
Chungu Mwila, director of private sector development for the Common Market for Eastern and Southern Africa, says, “I think there is a lot more that the U.S., being the strongest economy in the world, can do by assisting in capacity building of our industries, by ensuring that some of the American companies come and look around. After all, Africa is no longer such a risk[y] place."
The Obama administration wants U.S. lawmakers to extend beyond next year a provision allowing AGOA-eligible nations to source raw textile materials from third countries.
Mwila says that extension, and the renewal of AGOA as a whole, will bring more business to a continent that it making itself more attractive to investors.
“We have very liberal economic regimes. Our macro-economic fundamentals are being put in place. For example, the inflation rates have come down. The exchange rates are stabilizing. And the economic growth rate is one of the highest globally, around five or six percent. You don't even get that in the U.S,” said Mwila.
Secretary Clinton says the Obama administration's approach to Africa is based on partnership not patronage, focusing not on handouts but on supporting economic growth that underlies long-term progress with the ultimate aim of helping developing countries chart their own future and end their need for aid altogether.