We’ve heard it all before: “Africa in Free-Fall” or “Failure to Launch.”
Indeed over the past few years, economic growth in Africa has stalled, falling to approximately 1.6 percent in 2016 – hardly enough to match an ever-increasing intercontinental population and one with ever-evolving demands to modernize as fully integrated members of the global marketplace. With commodity prices in flux and limited oil revenues, sub-Saharan, resource-dependent countries such as Nigeria, Angola, and South Africa have been experiencing a standstill of sorts; severe deficits, high unemployment rates and in some cases, civil unrest as an end-result.
It’s an intriguing time to be an investor.
Indeed many of these emerging African markets have already begun to show resiliency in the face of disparity and discontent, as those in the investment industry surely recognize. Governments are welcoming both diversification and dynamic financial engineering solutions from experts in the private sector as a direct means to sustain economic development and showcase a willingness to foster a favorable climate in which to attract foreign investment and growth.
World Bank estimates
African citizens are en masse welcoming these initiatives and pursuing new means of prosperity themselves through entrepreneurship. The overhaul of respective tax systems and methods of collation, transformation of urban spaces, and cutting of subsidies are engines functioning harmoniously to attract capital spending towards African countries while stimulating economic growth.
In fact, the World Bank estimates that economic activity in Africa will rise 2.9 percent in 2017, with many top-performing countries such as Rwanda, Tanzania, and Senegal having increased development. Coupled with a recent announcement that the World Bank Group will also invest $57 billion over the next three years into sub-Saharan Africa, that development potential is set to dramatically accelerate.
And so, despite the sensationalism, Rising Africa will steady and continue its course. The intrepid entrepreneurial community here in the United States should lead by example as the storm is weathered, and boost multilateral partnerships in Africa throughout to mutual benefit.
Under the Obama administration, support for African investment potential was sadly lacking, especially when compared to those of the Bush and Clinton administrations. I strongly encourage the private sector, indeed the president and those closely affiliated with his administration respectively to share our measured optimism and take pragmatic steps forward in African integration; a continent never to be underestimated, with rife markets available, receptive and readily-positioned as viable and long-term trade allies to the United States.
In the public sector, as foreign policy priorities will waver under the Trump administration, we must continue to encourage foreign financing in Africa and discourage capital flight; tapping into opportunities that have previously been ignored due to concerns such as perceived risk.
In particular and to have this advice heeded to truly bear fruit, we must look to renegotiate the Africa Growth and Opportunities Act (AGOA) to mutual benefit, which has the ability to strengthen American exports, create new jobs and provide fundamental economic diversification. Promoting African development would certainly set President Trump apart from previous administrations and perhaps through greater collaboration, would permeate in to success even in shared efforts to reduce security threats at home and abroad.
The model I suggest isn’t particularly innovative.
Look to China, where tempo with regard to African integration has rarely wavered. The continent continues to experience an insatiable demand from China and the Asian ‘Tiger Markets’ for raw material and commodities to propel its manufacturing industries.
This creates an unbalance it is high time we right. We need to analyze this formula and replicate it to our best ability.
Africa is resurging and its citizens are willing to work with foreign enterprises to foster an innovation in product and service dissemination to meet rising demand. Buttressed by focusing African-U.S. foreign policy in the public arena will provide a launch pad for multilateral private investment and shared growth.
The multitude of emerging markets the African continent comprises are ready for diversification, open to economic cooperation, and seeking opportunities to move away from non-renewable or traditional commodities.
Beyond cyclical crises and prognostications from them as to how a return-on-investment centric administration can maximize opportunity by turning its attention to resurgent Africa, entrepreneurial outfits such as ours acknowledge that it will remain in our hands in the interim to create truly lasting change.
Ed Kostenski is the founder and president of Nationwide Group, an American entrepreneurial enterprise operating in over 60 countries, hosting a passion for enabling prosperity through accountable partnerships within emerging markets. The views expressed are his own.