Following an event hosted by the Georgetown University African Studies Program and MSFS Africa Forum, the Georgetown Journal of International Affairs sat down with Alicia Robinson-Morgan, the Deputy Director for the Office of Africa at the U.S. Department of Commerce’s International Trade Administration, to discuss the current challenges in formulating U.S.-Africa trade policy.
GJIA: What is your department at the International Trade Administration doing to address the lack of infrastructure in Sub-Saharan Africa, and what challenges does this issue bring to your efforts?
AR: The Commerce Department is tackling the problem of low infrastructure levels by playing an active role in strengthening the Administration’s initiatives in Africa. Power Africa, the President’s plan to bring electricity to the continent, is one of our top priorities. Furthermore, we are one of twelve government agencies working to help companies develop public and private partnerships so they can easily access the market and take advantage of new power project opportunities in Africa. We have worked hard on the Doing Business in Africa Campaign, specifically through the President’s Advisory Council on Doing Business in Africa. The Council is comprised of 14 companies in varying sectors that routinely give recommendations to the President about how we should be engaging with Africa. We learn more about the most pressing infrastructure challenges in the region based on these recommendations.
GJIA: Most employment in Africa today is stuck in low-productivity sectors. What are the United States and the African nations doing about this, respectively, and how is the U.S. aiding the shift toward higher productivity work on the continent?
AR: One of our main focus areas is strengthening infrastructure in Africa and facilitating U.S. company access to infrastructure projects in the region. One critical component of this is helping Africans gain access to electricity, which is critical not only to powering homes and businesses, but also to business development, evolution, and growth. Even though a number of African countries still have high rates of employment in low-productivity sectors, we realize that the manufacturing sector is critical for their long-term development. Agriculture employs the majority of Africans in many countries, and this is an important sector that needs to evolve not only in size and scale, but in technological advancements as well. There are several recent examples of U.S. companies focused on manufacturing in West Africa in the consumer goods and agriculture sectors, and they are using this platform to build up their market base and market share in the region.
The Commerce Department is acting upon recommendations from the President’s Advisory Council on Doing Business in Africa in focusing on cold chain – facilitating the transmission of products from farm to table, which includes integrating the entire value chain from farmer to critical transportation nodes to the end user – and connecting institutional investors to infrastructure projects in the region. These are all areas that are encouraging the shift to higher productivity work in Africa.
GJIA: How important is specialization for countries to experience growth in a manufacturing-based economy?
AR: A good example of this is Ethiopia. Their approach to growth involves bringing in companies with expertise and competitive advantages in key sectors. Ethiopia has focused on the horticultural and leather industries, and it is intent on bringing in the best business models to help build up the country’s manufacturing base in these sectors. Ultimately, targeting specific lost-cost manufacturing sectors will employ more people in critical industries, ranging from the agricultural sector to the textile industry. We believe that Ethiopia is a good model for manufacturing-based development in Africa; we have a new office there, and our senior commercial officer is very engaged with local businesses, helping U.S. businesses navigate the complex Ethiopian market. U.S. companies can help grow the market and create new connections and linkages.
GJIA: Corruption is obviously a huge issue and a large barrier to trade and development. What does your department do to mitigate corrupt practices?
AR: Well, first off, we counsel companies to make sure they realize that they have to do their due diligence, such as researching the market and identifying potential local partners, before entering the market. Part of doing business in Africa is relationship building. Making sure that companies are going in and meeting the right people, developing the right relationships, and cultivating face-to-face connections is both critical and valuable. The Commerce Department helps facilitate those connections to ensure that our companies can access the right local companies, either in order to gain entry into a market or to expand. Our offices also aid U.S. companies in engaging in joint ventures and finding local partners. We especially encourage this way of doing business.
GJIA: As China’s economic presence on the African continent expands, what strategic measures is the Commerce Department taking to address this potential source of business competition?
AR: The initiatives that we and the Administration as a whole have undertaken really show Commerce’s efforts to attract U.S. businesses to the African marketplace. This is a ‘whole of government’ approach to helping companies do business by bringing together trade promotion agencies. The Commerce Department can also help create partnerships between U.S. companies and local businesses. The work we are doing through the President’s Advisory Council is a testament to our efforts to help American companies increase their chances of success in the African marketplace. We hear directly from the private sector and try our best to receive and act upon the recommendations that they are developing.
I would also highlight the work that we are doing under the U.S.-East African Community Commercial Dialogue, a government-to-government mechanism. The Commerce Department works closely with government officials from the East African Community and the Secretariat to discuss key issues under this framework. What is even more exciting is that there is a private-to-private, or business-to-business, side of the program. U.S companies talk directly with East African companies, and they meet whenever we hold our Commercial Dialogue meetings. The business-to-business meeting really is a core part of the Commercial Dialogue initiative.
GJIA: How has the worldwide decline in commodity prices impacted Africa, and in turn, U.S. trade policy in the region?
RA: A number of African countries are heavily dependent upon oil and commodities. Angola and Nigeria, for example, were hit particularly hard by the recent downturn. However, on the flip side, countries that have diversified their market base and countries that, in general, were never dependent on oil have actually done fairly well. Countries like Kenya, Ethiopia, and Rwanda still have strong GDP growth rates. Cote d’Ivoire is also expected to weather the downturn quite well. The lesson that we have learned from the commodity crisis is that countries should ensure that their economies are truly diversified and not dependent upon one core area for economic growth. The other important lesson to emphasize is that implementing the right economic policies is critical for staying competitive in the global economy and attracting much-needed foreign direct investment.
GJIA: How is the Department of Commerce helping Africa transition to more climate-friendly energy policies?
RA: As part of the Power Africa initiative, we have hired a liaison to work with USAID in order to better focus on helping American companies identify energy and power opportunities in Africa. We also co-led a trade mission with the Department of Transportation last year that had a strong energy focus, including an emphasis on renewables. In all, we are trying to encourage energy development in Africa and assist U.S. companies with information on these projects so that they can take advantage of the numerous opportunities in this critical sector in Africa.
GJIA: How do foreign and domestic policies from outside of your department shape U.S.-African trade efforts?
RA: The policy of the Commerce Department is clearly aligned with the policy of the Obama administration as a whole. The President’s Strategy on Sub-Saharan Africa and our mission over these past few years has been to ensure that companies are aware that Africa is a good place to do business and that – just like anywhere else – you need to be smart and do your homework before entering into new markets. Meanwhile, the Commerce Department has enacted a number of key initiatives, from expanding the number of our offices in the region to adding a commercial officer at the African Development Bank, in order to increase the U.S. footprint on the continent. Last year, like I mentioned before, we co-led a trade mission with the Department of Transportation. This year we led a trade mission to South Africa, Ghana, and Cote d’Ivoire focused on education. Combined trade promotion through improved market access and an emphasis from the policy side to ensure that companies get to these markets is key to effectively promoting business in Africa.
Alicia Robinson-Morgan is the Deputy Director of the Office of Africa at the U.S. Department of Commerce’s International Trade Administration.