Remarks at the Corporate Council on Africa's Seventh Biennial U.S.-Africa Business Summit
Secretary of State
Thank you. Well, thank you very much, Stephen, and it is a real pleasure for me to join you today and be part of what has already been a very substantive program. I thank you and the Corporate Council on Africa for your tireless efforts to develop stronger business and trade ties between the United States and the countries of Africa. And I want to also recognize my colleague in the cabinet, the U.S. Trade Representative Ambassador Ron Kirk, who is a great advocate of increasing economic and trade opportunities as well. (Applause.)
Well, as Stephen said, I had an extraordinary trip in August and was able to visit some places that I had not yet had a chance to travel to, and to go back and see some places that were very familiar. But the point of the trip was to underscore the importance of Africa to the Obama Administration. It is obviously a cause that I personally am committed to, but it is truly a high-level commitment from the entire Administration, because we start from a premise that the future of Africa matters to our own progress and prosperity.
And the Obama Administration has strategies to help spur economic development in Sub-Saharan Africa and create conditions that will improve the lives of the African people, which to us is how you really measure success. We are eager to move beyond stereotypes that paint Africa as a land of poverty, disease, conflict, and not much else. And we will continue to lay a strong foundation for a new kind of engagement with Africa, one that is built on shared responsibility and shared opportunity, and on partnerships that produce measurable, lasting results.
From our perspective, for too long, Africa has been viewed as a charity case instead of a dynamic continent capable of becoming a global economic engine of the 21st century. So it is time to change the narrative. It is time to understand that strengthened trade policies will enable African businesses to tap more effectively into existing markets and create new ones. It is time to recognize that with technology and innovation, African nations can leapfrog dirty stages of development and become more quickly integrated into the global marketplace. It is time to recognize too that the reform of the agricultural sector is essential to Africa’s future growth and prosperity, and that investing in people, especially women, will enable Africa to move much more quickly toward the kind of sustainable future that we all are hoping for.
Now, we have a big agenda and we have a very positive vision. But we have to acknowledge that none of this can happen without responsible African leadership, without good government and transparency and accountability, without acceptable of the rule of law, without environmental stewardship and the effective management of resources, without respect for human rights, without an end to corruption as a cancer that eats away at the entrepreneurial spirits and hopes of millions of people. (Applause.)
Now, we know that there are a lot of obstacles to overcome, but we are determined to work with you to achieve the goals that we have set forth. I was delighted that President Kagame was here, because even with the global recession, Rwanda’s health indicators are improving, its economy continues to expand, and that is directly traceable to the sound policies that the government has implemented. In – yes, you should give that a round of applause. (Applause.)
In each of the seven countries I visited, I saw examples of activities and investments that are already paying dividends. I saw researchers in Kenya who are modernizing agriculture by creating tools that will enable us to provide new kinds of seeds, fertilizers and equipment to transform rural farming. Young entrepreneurs in South Africa are starting businesses and building open markets that are competitive with counterparts anywhere in the world.
Public and private partners working together in Angola on new models of development assistance; health professionals in the Democratic Republic of Congo risking their own lives to give life back to those dehumanized by violent conflict; members of civil society in Nigeria pressing for electoral reforms and an end to corruption; civil servants in Liberia working to build democratic institutions as the country pieces itself together after years of civil war; and leaders in Cape Verde whose emphasis on good governance and transparency and strengthening democratic institutions has elevated that small nation economically in only a decade.
So across Africa, we know there are opportunities to be seized and we know that there are people who will do the hard work. But what we have to do is to help create the right conditions, and we are focusing on five key areas; first, trade. We are Africa’s largest trading partner, and at the AGOA conference in Nairobi, I said the United States would work to maximize the opportunities created by trade preference programs like AGOA. We want to work to build greater trade capacity in Africa, provide assistance to new industries, and we look forward to more bilateral investment treaties like the one we signed with Mauritius during my trip.
But we have to convince African countries to do more trading among themselves, and to break down the barriers at their own borders. (Applause.) It is absolutely clear that if African countries began to trade with one another, they would quickly have more increase in GDP than they could ever imagine by just bilateral agreements with Europe and the United States. So part of our goal must be to persuade our friends – open up your own markets to each other. (Applause.)
Second, development – we’re not going to forget the needs that exist, and the Obama Administration has pledged to double foreign assistance by 2014, because we believe development is still a linchpin of global economic progress. But we will pursue a different approach. We are looking to generate concrete and lasting solutions, not long-term dependency that saps the dynamism of a country instead of adding to the potential. (Applause.)
We will focus on country-led plans and market-based investments in areas like food security, infrastructure, and women. We will focus on metrics and accountability, on nations eager to attack corruption and promote good governance. And we will do a better job at integrating development with diplomacy so that we can address the interconnected problems we face.
Now, last week in New York at the United Nations and at the Clinton Global Initiative, I outlined our new initiative to address global hunger and agricultural reform. Food security may seem far removed from the work that some of you do and the investments that you make, but it is so important to Africa. The continent’s economy depends on agriculture, and 70 percent of the farmers in Africa are women, who are marginalized, who are ignored, who are not given the help they need to improve agricultural productivity for themselves and have a little left over to take to market to trade and sell.
Revitalizing and modernizing the agricultural sector in Africa is a smart investment for all of us to make, and I invite those of you who have any involvement in agriculture to work with us, to work with the Comprehensive Africa Agriculture Development Program that provides such a good model. All of the member nations have pledged to devote 10 percent of their national budgets to agricultural development.
Once again, Rwanda is a model. It became the first country to complete its agricultural development plan and it’s already showing results. In three years, Rwanda’s investment in agriculture has increased fivefold and doubled agricultural GDP.
So food security is not just a question of getting food to hungry people. It is not simply a moral imperative. It represents the convergence of complex issues that have a direct bearing on economic growth. That’s why the G8 in Italy pledged $20 billion toward food security. We pledged $3.5 billion for our own initiative over the next three years.
Now, in thinking about food security and agricultural productivity, the lens immediately widens. Because in order to be successful in that sector, we have to modernize and build infrastructure. Not long ago I asked an expert on Africa what the continent needed most. His answer was: “Three things: Roads, roads, and roads.” So we are pursuing strategies to improve infrastructure and provide better access to information, capital, and training.
We also have to emphasize aviation. One speaker at AGOA made the point that it is easier to fly from Nairobi to London or New Delhi to Kinshasa or Abuja than to fly between those African cities. And until we provide more support for safe and functional airports, like we are now doing with the Government of Liberia, Angola, and Kenya, we will not maximize economic development.
We are also pursuing Millennium Challenge Corporation compacts with countries in Africa. And just two weeks ago, we signed an agreement with Senegal to provide $540 million to help that country rebuild its transportation and irrigation infrastructure.
The third pillar of our strategy is energy security. Africa is key to the United States and to global energy security, and the number of energy producers is growing. I had very productive meetings in Angola that will result in the creation of bilateral working groups on renewable energy, security issues, agriculture, and food, and we established a Memorandum of Understanding as to how we will pursue those objectives.
I also met with leaders in Nigeria and emphasized our commitment to partnering with Nigeria in areas such as electoral reform, anti-corruption activities, better stewardship of oil revenues, and efforts to build a more diversified economy, as well as the resolution of the conflict in the Niger Delta. I will be reaching out to the energy companies here who do business in the Niger Delta to figure out what we can do to try to resume a more productive outcome for the people of the Niger Delta in the production of energy.
There is no doubt that when one looks at Nigeria, it is such a heartbreaking scene we see. The number of people living in Nigeria is going up. The number of people facing food security and health challenges are going up. Why? Because the revenues have not been well managed. And the consequences of being a large energy producer has not been translated into positive changes for the Nigerian people.
Now, we encourage Nigeria, Angola, and other energy-producing countries to manage their resources and escape the natural resource curse that has plagued much of the continent. We have a new position in the State Department. It’s the Coordinator for International Energy Affairs. I have appointed a very experienced expert, David Goldwyn, to work with our partner countries. We will help new producers devise transparent revenue management systems to help them avoid the challenges other countries have faced with large new flows of money from oil, gas, or mining.
And to that end, we are pleased to have contributed $6 million last week to the World Bank’s multi-donor trust fund for the Extractive Industries Transparency Initiative. We believe that within the right legal framework Africa can be an enormous market for investment and for economic growth, as well as a secure producer and supplier of energy.
Fourth, we need to build more public-private partnerships. In the 1960s, nearly 70 percent of all money flowing from the United States to the developing world was official development assistance; today, over 80 percent is from private sources.
We want to build on all of the generosity, the talents that are at our disposal – in the government, in the business community, in groups like the CCA, and in civil society. Under the leadership of Ambassador Elizabeth Bagley, who heads our global office for public-private partnerships, we recently announced several new partnerships, including one that will bring together USAID, the Rockefeller Foundation, the Global Impact Investing Network, and JP Morgan Chase to support the development of social impact investing strategies. We are trying to figure out to do what we do better through government, but how we maximize and do better what we can with the private sector and the not-for-profit sector as well.
And fifth, and perhaps most important, we are stressing good governance, transparency and accountability, ending corruption, and adherence to the rule of law. I don’t need to tell this group that although there are so many opportunities for investment, none will succeed unless conditions are favorable for business and investment.
Companies are not going to be attracted to states with failed or weak leadership, crime or civil unrest, or corruption that taints and distorts every transaction and decision, or to countries that violate the rights of their people and, worse, allow violence toward women and girls to be practiced with impunity.
South Africa offers a compelling example of the relationship between good governance and economic development. South Africa emerged from apartheid and engaged its citizenry in the democratic process and is now Africa’s economic engine. And as Stephen said, having a South Africa-U.S. Business Council will once again demonstrate how closely we wish to work with our partners in South Africa.
Now, the Extractive Industries Transparency Initiative is incredibly important, so we are providing technical assistance, we’re promoting more effective law enforcement through professional training of officers. And I am pleased that we won passage yesterday of a UN Security Council Resolution on gender and sexual-based violence that will be backed up by action through the UN.
There is so much to be done, but I am so excited about the potential. It’s a big world out there, and we could spend time worrying about everywhere, and there are lots of opportunities everywhere. But I remain convinced that no place holds the opportunities of the future like Africa does. But that doesn’t mean – (applause) – that we can just expect it to happen. We have to work together.
When I was at the University of Nairobi at a town hall, a great friend of mine and extraordinary environmental and peace advocate and Nobel Peace prize winner, Wangari Maathai, was with me was sitting in the audience, and she said something that has stuck with me that I have repeated across Africa and literally across the world. She said, “Africa is a rich continent. The gods must have been on our side when they created the planet. And yet we are poor.”
It is a painful truth; through colonialism and post-colonialism, the continent’s riches have too often gone to the few, not the many. But Africa itself holds an example that I would recommend to all of you – those of you in government and those of you in business – and that is the arrangement in Botswana for the mining and marketing of their diamonds with De Beers.
The Government of Botswana in the late ‘40s and early ‘50s, post-independence, was so visionary. The leadership there was so devoted to building a country that would have the advantages that they wanted to see for their people after colonialism had finally ended. So they struck a hard bargain, and they created, essentially, a trust fund where a percentage of the revenues from the diamonds went into that fund, and then that fund was used to pave the roads. And if you’ve traveled in Botswana, you know that the roads are the best in Sub-Saharan Africa except for South Africa. And we can see the results year after year after year.
I got a letter the other day from the chairman, Mr. Oppenheimer, of De Beers saying, “Thank you for mentioning our relationship with Botswana. It has created a stable, successful environment for us to do business in.” Yes, you could have had short-term profits at the expense of long-term profitability. But instead, a different bargain was struck. I commend that example to all of you. (Applause.)
And let me just finally say that we stand ready to help. We stand ready to help our friends in Africa. We stand ready to help American businesses and corporations. We want to look back after the Obama Administration and be able to say we made a difference in Africa, and we can see the results. (Applause.) This is not only because it’s the right thing to do and the smart thing to do; it’s very personal to President Obama. He considers himself a son of Africa because of his father’s lineage. And he and I talk about how we want to see positive changes, changes that we all know can be made given the intelligence and the work ethic and the extraordinary abilities of the people of Africa. So let’s make sure that the governments of Africa are worthy of their people.
Thank you all very much. (Applause.)