U.S. President Joe Biden has been right about much of his evolving policy toward sub-Saharan Africa. He has rescinded travel restrictions implemented under his predecessor, reengaged with the World Health Organization, rejoined the Paris Agreement, and directed his diplomats to focus on the conflict in Ethiopia, among other measures.
Unfortunately, the Biden administration is at risk of getting it wrong on trade and investment with the region. Like former U.S. President Donald Trump, Biden’s administration appears resistant to the idea of a sectoral focus for the Prosper Africa initiative, which aims to significantly increase two-way trade and investment between the United States and African nations.
To correct course early in the term, the White House should identify two or three sectors of priority — selected to advance U.S. competitiveness globally and meet African investment needs — and promote them at home and abroad.
From satellite-based connectivity to financial services, the administration has many sectors from which to select. Under Trump, Prosper Africa failed to choose. Trump’s signature initiative for the region had a rough start.
After an inauspicious launch with then-national security adviser John Bolton using the 2018 unveiling to focus on China, there was confusion about the details, as well as when the initiative would start benefiting the meager U.S. trade with sub-Saharan Africa. After more delays, Prosper finally came into view with additional events and a glossy website in 2020.
Despite this staccato beginning, many observers — including us — rushed to congratulate the administration for its elevated focus on trade and investment. While we quibbled about the poor rollout, it was evident that Prosper Africa had the potential to help solve a perennial problem: the U.S. government’s ham-fisted coordination of its commercial tools.
The government’s siloed offices make it difficult for companies to identify support, which has been a long-standing stumbling block to increasing U.S. trade and investment with African nations.
To meet the goal of substantially increasing two-way trade and investment, the current administration must define priority sectors ... to prime U.S. businesses and engage African partners.—
The Trump administration’s core problem, however, was Prosper Africa’s lack of a sectoral focus. The Biden team has the opportunity to correct this if it acts with urgency. In private discussions, Trump officials said they intentionally chose to keep the program general, as they did not want to tell the private sector what to do.
This was a missed opportunity, failing to appreciate the power of the U.S. government’s bully pulpit. U.S. companies too often view African markets through the lens of risk — a contrast to Chinese organizations, which see profit.
This perception remains even when evidence points to the contrary. A change in this view will increase the attractiveness of the continent for U.S. investors.
To truly unlock trade and investment with Africa, U.S. commercial policy should target specific sectors. The Biden administration can then showcase where the most attractive opportunities reside and signal the importance of African markets. If Prosper Africa were to adopt a sectoral focus, it could inject excitement about potential investments through industry-specific communications and outreach.
That’s what happened with Power Africa. Following its launch in 2013, the U.S. government was able to generate new interest by simply putting a public focus on one sector. The initiative now boasts well over 100 private sector partners.
A sectoral emphasis also has a secondary effect: It improves U.S. government expertise, which can be leveraged to support investors. Instead of being jacks-of-all-trades and masters of none, U.S. officials become steeped in specific sectors and consequently become well positioned to help U.S. companies succeed.
The Biden team can build on this learning. It has a real opening to seize on Prosper Africa’s potential to advance prosperity in the U.S. and African markets through trade and crowd in new U.S. investments to promising new sectors. If the Biden administration fails to set sectoral priorities, it will walk into the same trap as its predecessor.
To meet the goal of substantially increasing two-way trade and investment, the current administration must define priority sectors — one, two, or even three — to prime U.S. businesses and engage African partners.
In our view, the most promising ones include financial services, agribusiness and renewables, technology, health care, and the entertainment industry. This is based on an original methodology by Aubrey Hruby — one of the authors of this opinion piece — using multifactor productivity, capital productivity, and capital intensity to determine sectors of American competitiveness.
A clearly communicated commitment to specific sectors, however, doesn’t mean closing the door on other U.S. companies interested in doing business within nonpriority sectors in African markets. To the contrary, Prosper Africa’s internal coordination mechanisms would remain available to all companies seeking support through the deal teams at U.S. embassies.
An effective Prosper Africa program would retain the back-end coordination that is unprecedented and powerful, but it would ensure that external communications and outreach to companies would be organized by priority sectors — to spur greater interest and entice new companies to invest in and trade with the region.
Thankfully, U.S. policy toward sub-Saharan Africa is a team sport. Republican and Democratic administrations have embraced each other’s initiatives, such as the African Growth and Opportunity Act, and subsequently strengthened and expanded them. There is a proud legacy of working collaboratively to advance U.S. interests.
The Biden administration has a chance to do the same. It should recommit to Prosper Africa and ensure that this new effort goes further, avoids the pitfalls of version 1.0, catalyzes new investment opportunities, and elevates U.S. commercial leadership in sub-Saharan Africa.