In two weeks, more than 40 African heads of state, U.S. and African business leaders, civil society leaders, media, and members of the African Diaspora will converge on Washington, D.C., for the U.S. Africa Leaders Summit (ALS). This is only the second time that an American president has invested the political capital to host such a gathering, the first being by President Barak Obama in 2014. Meanwhile, the rest of the world — from China to the European Union, France, India, the Gulf States and Russia — has engaged Africa with regularity.
The Summit is expected to provide meat-on-the-bones to the U.S. Strategy for Sub-Saharan Africa, released last August, which called for reciprocity and partnership. Several signature initiatives are expected to be announced during the U.S. Africa Business Forum. The Biden administration deserves credit.
The ALS comes at a moment of global fragility, which is gravely impacting Africa, including COVID-19’s health and economic shocks, Russia’s war in Ukraine, and some of the most catastrophic weather events in a decade. Yet business is getting done, and Africa is hopeful for a more engaged United States.
Earlier this month, I traveled to Abidjan, Cote d’Ivoire, to participate in the Africa Investment Forum (AIF) established by the Africa Development Bank (AfDB) in 2018 to close the infrastructure financing gap estimated at $170 billion a year. The other founding partners include Africa50, the Africa Finance Corporation, the Africa Export-Import Bank, the Development Bank of Southern Africa, the Trade and Development Bank, the European Investment Bank, and the Islamic Development Bank.
The centerpiece of the three-day program was the “boardrooms,” where heads of state serve as CEOs to close complex transactions. It is an African innovation, bringing governments, financiers, and the private sector together to break-down the investment barriers that have plagued the continent, particularly perceptions of risk.
This was the first in-person AIF since the coronavirus pandemic hit in 2020, so I thought it would be a good place to take the pulse ahead of the Biden Africa Summit from nearly 2,000 participants engaged in the high-stakes race to transform the continent’s economic landscape ahead of a demographic explosion where by 2050 one in four persons will be African.
Here’s is what I took away.
First, Africans increasingly know where they stand, believing that they have suffered from placing excessive trust in the West and in Western institutions — from poor vaccine access and the devastating economic consequences of Russia’s war in Ukraine to a global climate consensus that strips them of energy agency essential for growth. Africans also feel that they are absorbing the cost of the rebalancing of political power in Europe, with inflationary pressures causing unrest, while compelled to operate within the rigidity of the Debt Service Suspension Initiative and the Common Framework for debt treatments. They look with dismay at the failure of the European Union and the United States to re-allocate their Special Drawing Rights from the International Monetary Fund.
In short, Africans are demanding a seat at the table in the institutions that were created when most of these young nations were under colonial rule. They feel that a new global framework must be developed, with financial and debt restructuring tools.
Second, the disconnect between African governments and their private sectors is striking. You sense that African business leaders can see the future, which many are driving — from climate innovation, to the creative industries, to healthcare and digitization, entrepreneurship and trade — an almost infectious energy reflected in the private discussions, the board rooms, and captured in the public programming.
This private sector dynamism is in stark contrast to the lethargy and inertia of many of Africa’s governments and political leaders, both those present and those not. Government malaise can be tallied in the post-COVID19 spike in military coups, in the presidential field of octogenarians in Nigeria, one of Africa’s largest and most dynamic economies, and with the coronation of a Central African president who is expected to extend his 43 years in office.
Third, all bets are on the Africa Continental Free Trade Area (AfCFTA) and the urgency of now. From the opening plenary, when Ghana’s president, Nana Akufo-Addo insisted that Africa must replicate the economic development and wealth creation model of the European Union (EU) where 75 percent of the trade is within the EU, through the closing session when deal commitments were announced, the AfCFTA loomed large.
Coming into force on Jan. 1, 2021, AfCFTA is the world’s largest single market, with a population size of 1.3 billion people and a combined Gross Domestic Product of $3.4 trillion. It connects 55 countries, across a landmass of more than 30 million square kilometers. It has the potential to lift 30 million people out of extreme poverty.
Conference participants candidly discussed how the lack of transparency, along with the high cost of foreign exchange and negative perceptions about doing business in Africa, are hampering the ambitions of this free trade vision. There was an acute awareness that each early investment dollar will matter and that the name of the game is to de-risk the financing of Africa’s infrastructure. And lastly, a hope that cross-border standardization could become an unstoppable force to modernize African public institutions and unshackle the continent’s future.
Meanwhile, in the “boardrooms,” the real progress was being made as the final hurdles to the Abidjan-Lagos Highway were overcome. This megaproject will connect 75 percent of West Africa’s commercial activities through 15 nations. The Lagos-Abidjan stretch is projected to be the largest zone of continuous dense habitation on earth, with something in the order of half a billion people.
So where does this leave us two weeks out from the Biden Africa Summit?
In summary, with an African business community that is revolutionizing public-private partnerships while Western financial institutions largely sit on the sidelines; with African governments that are failing to keep pace with the changing expectations of their people, and finally, with a continent whose free trade agenda will increasingly shape its future, global economic prosperity, and the prospects for limiting the climate crisis.