This week, about 50 African heads of state gathered in Washington for President Obama’s inaugural U.S.-Africa Leaders Summit. This meeting is the first of its kind convened by a sitting American president. It is seen as a historical opportunity for the United States to deepen trade and economic ties with Africa, a region that now presents significant growth opportunities for U.S. companies. By all accounts, the “Africa Rising” narrative appears to have given way to “Lions on the Move.”
To many, this seemed unthinkable only a few years ago when the headlines suggested an indefinite sense of political and economic hopelessness. Many felt that the rampant military coup d’états from east to west and north to south of the continent would never give way to stable political and social environment that today has become the norm rather than the exception in much of Africa.
Major investment houses around the world have since taken notice with increased flow of foreign direct investment into Africa. The recent emergence of Nigeria as the largest economy in Africa with its population of nearly 170 million has further heralded a new level of optimism that is palpable throughout the continent.
Continent-wide economic growth is projected at 5.8 percent over the next five years, and remarkably, the growth is broad-based and driven less by higher commodity prices such as oil than in the past. A large, younger, more educated working-age population promises a so-called demographic dividend well into the future, and the growing consumer class is seemingly poised to become fully integrated into the global economic community, one in which Africans are producers and consumers of goods and services.
While several factors underscore Africa’s economic growth in the last decade and half, it is important not to overlook persistent challenges that could potentially derail this current economic progress.
There remain substantial security concerns on the continent with ongoing issues with al Qaeda in the Maghreb, the Tuareg rebels in Mali, and the activities of Boko Haram in northern Nigeria.
Inadequate healthcare remains a vexing issue in many parts of Africa, along with the necessity of reducing incidents of preventable diseases like malaria and tuberculosis. The current Ebola outbreak in West Africa underscores the need to develop better health-care infrastructure. In addition, the incidence of HIV and AIDS, while significantly less prevalent than a decade ago, must be held in check with increased investment in preventive education.
Corruption remains a rampant problem in much of Africa with few signs of abatement, despite sanctions by the U.S. and Western powers against offending leaders. The gap between the rich and poor has never been wider in many countries, despite rising national GDP, which raises the specter of social discord and potential unrest if the gap goes unchecked. Despite improvements in power generation and distribution, more than 70 percent of Africans lack access to reliable electricity, a scenario that could well choke off economic growth in the absence of continued expansion of power supply.
Similarly, food security remains a major problem with a teeming urban population fueled by growing migration from rural areas into major cities which has created the need for a more productive agricultural sector.
These challenges notwithstanding, it would be unwise to minimize the significance of the U.S.-Africa Leaders Summit.
In many ways, the summit’s agenda goes beyond the initial tenets of the African Growth and Opportunity Act (AGOA). Its broader goal is to encourage integration, both within the continent and between it and the U.S. Coca-Cola Co. pledged to invest another $5 billion in the continent by 2020, part of $30 billion in private deals announced by President Obama at the summit. The impact of such development can be profound in defining the next generation of African leaders.
Atlanta, and indeed the state of Georgia, are uniquely positioned to ride on the summit’s coattails. Atlanta hosted more than 20 of 500 Young African Leaders brought to the U.S. through a State Deaprtment program leading up to the summit. While here, they participated in a variety of activities that enabled them to learn more about the public, civic, and business environment of the area.
Local institutions can also boost engagement. The Centers for Disease Control and Prevention (CDC) and Emory University Hospital have been at the forefront in helping to combat the Ebola outbreak in parts of West Africa as well in dealing with other challenges facing Africa in the areas of public health. Atlanta-based Delta Air Lines has nonstop flights into major African cities. The City of Atlanta and other municipalities in Georgia are engaged in exploring varying levels of opportunities for trade in different parts of the continent. as witnessed by planned trade missions to Africa.
Whether this current growth can be sustained is a matter of conjecture and time. Clearly, the potential for economic development and wealth creation is substantial. Likewise, the risks associated with the African market cannot be underestimated. The US-Africa Leaders Summit is both an important and historical step in the right direction. As stated by President Obama during his news conference ahead of the summit, “We want to do business” with Africa. “And we think we can create U.S. jobs and send U.S. exports to Africa. But we’ve got to be engaged, and this gives us a chance to do that.”
A native of Nigeria, Alphonso Ogbuehi is professor of global marketing and strategy at Clayton State University’s school of business and its former dean.