Africa is on the cusp of a seismic transformation. With a booming youth population projected to reach 2.4 billion by 2050, a rapidly expanding digital landscape with over 570 million internet users, and an abundance of natural resources accounting for 30% of the world’s mineral reserves, including critical minerals and rare earth elements, the continent is poised for unprecedented economic growth, and investment and trade opportunities. These factors, combined with Africa’s strategic position in the global market, underscore the continent’s potential as a powerhouse in the 21st century.
At its eighth Global Development Forum, the Center for Strategic and International Studies (CSIS) Project on Prosperity and Development highlighted key themes of focus: economic growth, decarbonization, and myriad topics, challenges, and opportunities for development and its potential to reshape the global economic landscape – in a conversation hosted by Noam Unger Director, Sustainable Development and Resilience Initiative and Senior Fellow, Project on Prosperity and Development and Daniele Jean-Pierre Regional Director for Trade, Prosper Africa, Krysten Jenci Senior Government Affairs Manager, Cisco Systems and Mildred Nadah Pita Head of Public Affairs, Science Stability for Africa, Bayer.
Africa‘s potential has not gone unnoticed. China, recognizing the opportunity, has already invested heavily, becoming Africa’s largest two-way trading partner, dwarfing U.S.-Africa trade by a factor of four and providing twice the level of U.S. foreign direct investment. Chinese companies have diversified their investments across various industries, including infrastructure, manufacturing, telecommunications, and agriculture. This development raises an important question: What can the United States do to not only catch up but also leverage its unique strengths in fostering a mutually beneficial economic partnership with Africa? The answer lies in a multifaceted approach that combines strategic investment, trade facilitation, and a commitment to sustainable development.
The U.S. government’s Prosper Africa initiative serves as a prime example of this approach. Aimed at strengthening the economic partnership between the U.S. and African nations, Prosper Africa is pioneering a private sector-led model of partnership that benefits both American and African businesses. By focusing on creating new jobs, diversifying global supply chains, and investing in Africa’s infrastructure and digital transformation, the initiative is laying the groundwork for a new era of economic engagement. Danielle Jeanpierre, Director for Trade at Prosper Africa, highlighted the initiative’s private sector-led model of partnership, benefiting both U.S. and African businesses
Mobilizing Private Wealth for Investment
A key priority for Prosper Africa is to encourage institutional investors, endowments, foundations, family offices, and sovereign wealth funds to explore investment opportunities in Africa. With $58 trillion in private wealth assets under management in the U.S. market alone, mobilizing even 1% of these assets could result in $580 billion in investment on the continent.
Trade as a Driver of Africa’s Digital Transformation
Prosper Africa recognizes that trade is not just about transactions but a driver of economic transformation, reshaping economies, uplifting communities, and changing lives. The initiative focuses on job creation, business expansion, and access to capital facilitated through its work. Prosper Africa’s trade strategy has two pillars: providing grants to support more processing on the continent and offering trade facilitation services to connect U.S. buyers with African suppliers. The initiative has facilitated approximately $14.2 billion in new two-way trade and investments over the past year, supporting events like the Magic Apparel Show in Las Vegas, where 68 African apparel firms secured $100 million in expected exports to the U.S.
Moreover, the U.S. must leverage its strengths in innovation, technology, and finance to support Africa’s digital transformation. The continent’s burgeoning tech ecosystem, characterized by a vibrant startup culture and innovative solutions to local and global challenges, presents an opportunity for American tech companies and investors. By partnering with African tech firms, the U.S. can help accelerate digital inclusion and economic growth across the continent.
The Pivotal Role of AGOA & Leveraging Public-Private Partnerships
One of the key strategies underpinning this approach is the utilization of the African Growth and Opportunity Act (AGOA). AGOA, a unilateral trade preference program enacted in 2000, offers duty-free access to U.S. markets for eligible sub-Saharan African countries that meet certain criteria. As the program’s renewal approaches, the question arises whether to renew it as is or revamp and modernize it to align with a changing world. There is however, a growing consensus that AGOA needs to be modernized to reflect the current economic landscape. This could involve enhancing support for African businesses, particularly small and medium-sized enterprises, and focusing on sectors with high growth potential, such as digital services and sustainable agriculture.
Prosper Africa launched the Africa Trade Desk, a public-private partnership serving as an aggregator with connections to over 20,000 U.S. retail outlets, including major chains like Costco, Walmart, and Kroger. The Africa Trade Desk supports smallholder farmers and small and medium-sized enterprises (SMEs) with financing, logistics, slotting fees, insurance, and other technical aspects of international trade, leveraging the African Growth and Opportunity Act (AGOA) for duty-free importing into the United States. This platform focuses on private labeling, enabling conversations with large buyers and sourcing from the continent through an aggregation approach.
As the global community seeks to diversify supply chains and enhance resilience, the U.S. government recognizes the potential of Africa’s trade and investment opportunities. Indeed the next chapter of investment and trade with Africa offers a unique opportunity for the United States to redefine and deepen its economic partnership with the continent. Initiatives like Prosper Africa and public-private partnerships like the Africa Trade Desk are crucial steps in this direction, fostering mutual prosperity through increased trade and investmen. The time to act is now, as Africa stands at the threshold of a new era of growth and innovation.
