Can Prosper Africa actually boost trade and investment in Africa?

A United States initiative to improve trade and investment with Africa has struggled to find its footing after an anemic start. But with its mission in the political spotlight, Prosper Africa is hiring staff, expanding outreach to businesses, and spreading the word about what it has to offer. The initiative, which still isn’t widely known, aims to better coordinate 17 U.S. government departments to make it easier for American companies and investors to do business deals on the continent. Prosper Africa has helped close 800 deals worth more than $18 billion since 2021 in places like Uganda, Ghana, and Nigeria. But some African and investment experts are skeptical about the initiative and say that confusion about its mission, a lack of funding, and sometimes a wrong focus have constrained its success. President Joe Biden’s administration and many African leaders have said that boosting economic and trade ties is a priority. The U.S. used to be Africa’s largest economic partner, but two-way trade dropped from just over $141 billion in 2008 to $64 billion in 2021. China has now eclipsed the U.S. in trade with the continent. The question is whether Prosper Africa, which will soon have a new leader, can effectively meet its intended goals. “There are pieces of what a successful Prosper Africa would look like, but it has not been put together. As long as it’s haphazard, it’s difficult to see what impact it could have,” Gyude Moore, a former Liberian government official and senior policy fellow at the Center for Global Development, told Devex. Prosper Africa is supposed to organize existing U.S. government programs related to trade and investment on the continent and make them more accessible. It also promotes and brokers business deals through the work of its business advisors and outreach efforts including events in the U.S. and organizing trips taking investors to the continent. “It’s not about an aid program that has time limits. It’s about how the U.S. government can play a role in deepening the commercial relationship between the U.S. and Africa.” --— Leslie Marbury, Southern Africa mission director, USAID By offering business advice, or connecting African or U.S. businesses to investment or loan programs, the initiative has helped close numerous deals. Cropsafe, a Nigerian company tackling post-harvest losses, and Yemaachi, a Ghanaian biotech firm, were both able to secure financing with the help of the initiative. It has also helped American companies expand their supply chains on the continent. The history Prosper Africa, headquartered in Washington, D.C., was first announced by then-National Security Adviser John Bolton in 2018, but didn't really get off the ground for about three years. In 2021 the Biden administration revamped the effort. The stated goal went from doubling two-way trade and investment between the U.S. and Africa to a far more vague target of “significantly increasing” it. It has also struggled to communicate its mission, which has led to a lack of clarity about what it does, several experts said. Many U.S. and Africa-based business owners, investors, and government leaders don’t even know the program exists. Part of the problem is a “mismatch” between expectations when it was announced in a high-level speech and what it is in practice, Moore said. “When they called it Prosper Africa, it created expectations of something more,” akin to other major U.S. initiatives targeted at tackling AIDS or expanding access to electricity, Moore said. African leaders had hoped it would be a substantial economic commitment to boost African economies rather than an effort more focused on coordinating U.S. government agencies and helping U.S. businesses, he said. Prosper Africa has potential, but it should be more proactive, target businesses across the U.S. that don’t have offices in Washington, D.C., do more events, and organize trips to the continent, experts told Devex. It should also provide critical information about real levels of risk, regulatory conditions, and other data that companies need to make decisions. The plan Prosper Africa seems to have heard some of those critiques. Looking ahead, the initiative will focus more on outreach within the U.S., helping educate companies through information campaigns, and bringing delegations to the continent. “People don’t invest in what they can’t see,” said Leslie Marbury, who until recently was the Prosper Africa deputy coordinator. When you bring “concrete transactions and opportunities” along with market insights and financing, the transactions happen, she told Devex before her departure in February. Marbury, who is now the U.S. Agency for International Development’s Southern Africa mission director, pointed to Prosper Africa’s virtual deal room, where about 70 African companies have posted their business proposals and are seeking investments. While some experts expressed skepticism about the effectiveness of digital deal-making platforms, she said the platform and Prosper Africa’s business advisors are finding success. Those advisors — including on teams in Washington, D.C., Johannesburg, and Rabat, Morocco — are working on more than 450 deals worth about $20 billion, Marbury said. They recently advised African telecom company Ubuntu Towers, connecting Ubuntu with an investor and helping raise $35 million. “It’s not about an aid program that has time limits. It’s about how the U.S. government can play a role in deepening the commercial relationship between the U.S. and Africa,” Marbury said. The greatest challenge thus far has been how to use limited resources efficiently to make the most of the opportunities, she said. When Biden overhauled the program in 2021, he heralded $500 million spending over five years. So far the U.S. Congress hasn’t approved that level of funding, though it did authorize $100 million for fiscal year 2023. Witney Schneidman, who has more than 40 years experience working in sub-Saharan Africa for the State Department and private companies, will be Prosper Africa’s new coordinator. Schneidman, who spoke with Devex before his appointment, said Prosper Africa has “great potential,” particularly for companies that haven’t yet invested in Africa. While companies in every U.S. state export to Africa, more of them could also invest on the continent, he said. “Prosper can be sort of the catalyst for making that happen and making it easier to do,” Schneidman said. There are some examples already. Red River Foods, a Virginia-based company that sources cashews from West Africa, is building a processing facility in Côte d'Ivoire, with Prosper Africa support. The cashews used to be sent to Asia for processing, but this investment will create local jobs and avoid shipping delays, Marbury said. Prosper Africa also has a key role to play in changing American perceptions of investing in Africa, including through telling stories of successful business ventures that can help alter how potential investors think about risk, Schneidman said. The initiative should work with state trade commissions to do more trade missions focused on specific sectors and people — be it Texas businesses, ports in the U.S., or digital companies. Getting firsthand experience shifts the first thought from “what are the risks to what are the opportunities,” he said.