Summit bids farewell to belittling aid

US-Africa event dominated by trade and investment as new era dawns

After repeated calls to make Africa a priority, many hoped that the 2014 US-Africa Leaders Summit would bring the US and Africa together in partnership. Indeed, the summit turned the page on a post-Cold War type of diplomacy that had been dominated by belittling aid and a paternalistic approach. The summit helped to usher the two continents toward stronger economic cooperation. It also created a platform for a mutually beneficial partnership aimed at reducing security threats.

The agenda focused on security, democracy and governance. However, a trade and investment theme dominated, with more than 60 ancillary events that featured African leaders who shared information on business opportunities in their countries.

As a result of these conversations, US President Barack Obama announced a $26 billion commitment to power development in Africa to provide electricity to lay the foundation for an African economic boom. A total of $33 billion was pledged and $14 billion worth of private deals were created during the summit. These actions were in response to the lack of US congressional passage of the Electrify Africa Act and re-authorization of the Africa Growth and Opportunity Act before the summit.

These investments are a far cry from China's $200 billion investment in Africa last year, which is more than double that of the United States. In fact, Linda Thomas-Greenfield, the US assistant secretary of state for African affairs, said Africa presents enough opportunities for all players. While China and the US have two different approaches to investing in Africa, they are complementary. Africa's bright future will not depend on the amount of investments made, but on which investments can create jobs on the continent and secure long-term development.

African leaders went to Washington accompanied by more than 200 African executives. Mutually beneficial partnerships are now the new models of engagement as seen by partnerships between Dangote Industries and Blackstone-backed Black Rhino with a $5 billion investment in infrastructure development; and Heirs Holdings, Symbion and General Electric, a venture that contributed to tripling the power capability in Nigeria from 150 megawatts to 453 MW in just six months. These success stories were made possible by the strong implementation of local content laws in Nigeria that allows the private sector to grow and due to improved power and investment regulations.

Speaking to a crowded room of decision makers attending the Bloomberg Philanthropy CEO Forum, Paul Hinks encouraged his US counterparts to engage with local African business entities. Heirs Holdings CEO Tony Elumelu called on African government officials to "democratize power" by improving the investment climate, governance and their fiscal regime and energy regulations to allow long-term investment in a commercially viable power sector. He also called on them to contribute to the creation of jobs on both sides of the Atlantic, to address the US employment challenge and Africa's security threat posed by 54 million new jobs that need to be created in Africa by 2020. This can be duplicated in all sectors. This is Africapitalism at full speed.

Nevertheless, Africa's future still depends on Africans, not on China, the European Union or the US. Speaking at the Believe in Africa Day High-Level Dialogue organized by African diaspora leaders, M. Donald Kaberuka said: "A country that relies on others to finance development is ordained to fail."

African leaders had expected to take part in the usual bilateral talks that they have attended in summits held in France, the European Union and China. However, the lack of such talks did not undermine the outcome of the summit. Their participation sent a clear message to the world that Africa is ready to enter the big leagues and that the summit was not just held to compete with the ones held by the Chinese or French. It is rather a loud proclamation of the strategic and economic importance the continent holds as stated in a resolution introduced by Representative Gregory Meeks of New York state in the US Congress.

Nonetheless, the US still needs to contend with China, Europe and other emerging economies, including India and Turkey. The increase of positive south-south relations has already altered the traditional regional landscape. We are entering a new era for US-Africa relations. Obama deserves praise for igniting the spark for these new relations. It is our hope that other summits will take place, hopefully next time on African soil.

The author is the managing director and CEO of Rimsom Strategies Ltd and founder and chair of Believe in Africa.

(China Daily Africa Weekly 08/15/2014 page12)