Corporate Council of Africa (Washington, DC)
24 June 2009
document
The following is testimony prepared for delivery by Stephen Hayes, president and chief executive officer of Corporate Council for Africa, for the United States House of Representatives subcommittee on Africa and Global Health in Washington, DC on June 24, 2009:
Congressman Rush, Congressman Payne, Congressman Barton, Congressman Royce and Distinguished Members of Congress,
I am honored to have been asked to appear before you to address the challenge and subject of these hearings: “US-Africa Trade Relations: Creating a Platform for Economic Growth”. I believe that this should be one of the highest international policy priorities of the United States of America. For this reason, our own organization, the Corporate Council on Africa (CCA) has been addressing this issue for some time. We recently produced a document entitled “The United States and Africa: Policy Recommendations from the American Private Sector for the Obama Administration”. The 56-page set of policy recommendations in nine different sectors is included with this testimony. (Attached) More than 100 US companies actively engaging in Africa worked more than three months in preparing the recommendations found in the document. The recommendations are truly those of the US business sector engaged in Africa, and as such should represent an important contribution to the policy debate which this Congressional Committee is addressing.
First, however, please allow me to provide some background of the Corporate Council on Africa (referred to as CCA) for the context of this testimony. CCA is a business membership organization of approximately 180 companies and media partnerships. Its membership also includes a few non-profit organizations such as Africare. Its members represent approximately eighty-five percent of all US private sector investment in Africa. Although about one-third of our companies are Fortune 500 companies, and are well-known in the public, the remaining two-thirds of our members are medium and small-sized companies. By small-sized companies we use the Small Business Administration standards of $6million gross revenue a year or less. Our members represent nineteen identifiable sectors of the American private sector. Therefore, both the organization and its members, as well as the American economy, have a considerable stake in Africa.
Although CCA is often referred to as a trade organization, we are not a normal trade organization, in that we do very little lobbying, and are a 501(c)-3 not-for-profit organization. Most trade organizations are dedicated to lobbying, and, as such, are 501(c)-6 organizations. We have a number of programs that are focused on both African development as well as increasing US investment in Africa. Our principal mission is to increase US investment in and trade with Africa. I believe we are the only such organization dedicated solely to this purpose with all the nations of Africa. We believe that we will not be able to increase US economic engagement with Africa to the level it needs to be unless we simultaneously address the issue of African development. Said simply, Africa cannot buy US products if they cannot sell their own products to us and the world. Therefore, if we want to be economically successful, we must also see that the economies of Africa are equally successful.
Within our staffing alignment, we have designed our staff structure to address what we believe are the most critical sectors essential to meeting the mission of the organization. Those sectors are infrastructure development, agribusiness, health, energy/power and financing. We have selected these fields as they are sectors in which US companies can make a difference in Africa, and with a supportive US Government policy, can compete with anyone in the world for market share. We are also addressing the issue of financing, as we view the availability of financing for US companies to do business in Africa as woefully inadequate. There must be a major policy shift in how financing is made available to US companies seeking to do business in Africa if the US is to remain a major player and partner in Africa.
Over the past ten years there have been primarily two new legislative acts germane to trade policy with Africa. They are the Africa Growth and Opportunity Act or AGOA, and its subsequent adjustments, and the Millennium Challenge Act. These have been the pillars of our economic policy towards Africa. I believe both deserve high praise for their initiative, and MCC deserves praise for its innovation. CCA has been in the forefront of support for both. Although the organization was not actively in support of AGOA until I became President of CCA, we played a pivotal role in its passage and have been integral to every US-Africa AGOA Private Sector Forum since the passage of AGOA. In fact, we are the US private sector coordinator for the upcoming US-Africa Forum in Nairobi in early August 2009. The section on trade policy in our Policy Recommendations to the Obama Administration focuses heavily on AGOA.
Likewise, I believe that the leadership of the Millennium Challenge Corporation would tell you that CCA is among its strongest boosters and partners in America. Again, I think the Millennium Challenge Act was one of the most creative foreign policy innovations over the past several decades.
Nevertheless, having said that I doubt that there is a person in this room familiar with both AGOA and MCC who feels that the acts and subsequent follow-up legislation have met the expectations that abounded at the time of their passages. I believe this very hearing is being held for this reason. We need to be doing something more or something differently if we are to continue to be a key player in the economic development of Africa.
I do not believe that the legislation in AGOA and the MCA is faulty, per se. They are both excellent pieces of legislation and being directed by highly dedicated and capable staff in the various Government offices that are daily involved with their implementation. I do believe, however, we need fresh thinking as we look to the future, and hope that the new appointees to this Administration will bring new ways of thinking about AGOA and MCC.
A few countries, such as South Africa, Lesotho, Kenya and Madagascar have significantly benefitted from AGOA. Many other countries in Africa have not. That is easily documented. For AGOA to be successful requires that the countries of Africa have sufficient infrastructure, including adequate roads, ports, rail lines, telecommunication, and adequate storage facilities, especially in the agribusiness sector, where the majority of Africans are employed, albeit often on subsistence levels in many places. There also needs to be massive training or capacity building of the workforce. Present legislation provides for neither. In short, while I believe that AGOA needs to be extended by at least ten years, unless we can address the inherent problems blocking African development, the benefits of AGOA will continue to be limited primarily to those countries with adequate infrastructure and a trained workforce. In other words, we need to move beyond AGOA if we are to sufficiently address the development of Africa. AGOA needs to be seen as an investment tool for Americans as much as it is a development tool for Africans. AGOA needs to be seen as one of several tools in the arsenal of African development.
We believe that we need new thinking and new approaches to our policy towards Africa. We need to no longer work for Africa, but work with Africa in partnership if we are to not only support African development but also help the American economy. We are very much in agreement with President Obama in that America cannot “go it alone” in international relations. No one country can solve all the challenges of the world.
We also need to cease looking at Africa in a traditional missionary way, that is looking to Africans as supplicants, and begin to look to Africa as legitimate partners in the decision-making processes that affect our relationships.
In addition to our policy recommendations to the Obama Administration contained within this written testimony, there are some other significant ways to work with Africa in its development while at the same time providing more job opportunities for the American worker. Here are a few of the principal ways that I believe can work for Africa and the United States economies.
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