As a new generation of African leaders looks to lead their countries into economic prosperity, U.S. financial woes could hurt the continent where it needs help most, Charles Stith, former U.S. ambassador to Tanzania, told GlobalAtlanta.
“The one thing that the continent needs in spades is foreign direct investment and if the credit market is tight, that has the potential of impacting the access that African countries and businesses that want to do business on the continent might have in securing the funds that they need,” he said.
A former advisory board member for now government-owned mortgage securities giant Fannie Mae and Fleet InCity Bank, Mr. Stith isn’t disconnected from the U.S. financial crisis.
In fact, he says President Clinton sent him to Tanzania in 1998 precisely because of his familiarity with some of the lending issues that caused the problems in the first place.
In Boston in the early 1990s, Mr. Stith worked with 15 banks to broker a $500 million lending package to help low-to-middle-income and minority communities find access to bank branches and affordable mortgages.
He then joined a national committee to help redefine the implementation of the Community Reinvestment Act, which was originally passed in 1977 to ensure that banks provided services across their entire areas, including lower-income neighborhoods.
“When the president had this idea that he wanted to engage Africa in different and more substantial ways, he gave me a call and said, ‘Look, I want you to go to Tanzania, and if you understand undercapitalized communities, you certainly would understand the struggles of undercapitalized countries,’” Mr. Stith told GlobalAtlanta in a filmed interview.
Proponents of the $700 billion bailout bill that Congress has wrangled over this week say that it would help unfreeze credit markets and prevent financial paralysis.
While lambasting what he calls predictable, fraudulent lending practices that brought about the crisis, Mr. Stith said the federal government’s bailout could help ensure that markets can sustain credit for businesses increasingly looking at Africa as an opportunity.
The continent has long been attractive for its commodities, but 650 million consumers exist in Africa’s 16 most populated countries.
“That’s a sizeable market, I don’t care what you’re peddling,” he said.
But if the bill—adopted by the Senate on Oct. 1—passes on its second try in the House of Representatives, it also would affect the U.S. budget and could put some aid to Africa on the chopping block.
Mr. Stith visited Atlanta Sept. 28-29 to promote a new book that compiles essays from 13 former African heads of state on the challenges facing the continent’s new generation of leaders.
As director of Boston University’s African Presidential Archives and Research Center, Mr. Stith edited the work, titled “For Such a Time as This: African Leadership Challenges.”
African countries are on the cusp of a historical shift as they move out of an era focused on independence from colonial powers and into the process of making democratic model work for them, he said.
As free-market reforms and political stability grow, Mr. Stith feels that Atlanta has the opportunity to play an increasingly important role in promoting understanding and business ties between the U.S. and Africa.
“Atlanta and its economy has the heft to really be a point of entrée into the rest of the world,” he said, calling Delta Air Lines Inc.’s Africa flights “right on time and right on target.”
He also praised President Jimmy Carter and former United Nations Ambassador and Atlanta Mayor Andrew Young for their work during the late 1970s in getting Africa higher on the U.S. agenda.
Mr. Young remains heavily involved in Africa through his consultancy firm Goodworks International LLC.
He also has shown support for the “Teach Africa” initiative recently launched by the Georgia Department of Education to promote Africa education in the state’s middle schools.
Mr. Young has been sharply criticized for his support of Robert Mugabe, Zimbabwe’s president.
Mr. Mugabe has ruled the country since it declared independence from Britain in 1980. His regime has been the subject of economic sanctions from Western powers after it used violence to deter supporters of opposition candidate Morgan Tsvangirai from voting in a runoff election earlier this year.
The two have reached a power-sharing agreement, and if it holds, Zimbabwe could get the influx of foreign investment and aid Mr. Stith says is needed in Africa.
In Mr. Stith’s view, the Mugabe problem is an example of why the terms “Africa” and “leadership” are not often combined in a positive way.
But Mr. Stith believes that a new paradigm is on the horizon.
“For the present generation of African leaders, now that the continent is free from Cairo to Capetown, the question … is, ‘Now that we’ve got our countries back, how do we make them work?’” he said.
Mr. Stith held three book-signing sessions during his visit to Atlanta.