The US-Africa Leaders Summit hits 'reset.' Now what?

There was pageantry, snarled traffic, announcements worth billions of dollars, and even time to watch the World Cup, but the U.S.-Africa Leaders Summit has come to a close with some success in its efforts to “reset” the relationship.

The summit, which stretched over three days last week, avoided major controversy but included commitments for the U.S. to invest some $55 billion in the continent in the next three years.

The real legacy of the summit, however, is whether those commitments materialize, how quickly they come to fruition, and whether they truly represent new money or just a reallocation of existing resources. With a divided U.S. Congress in the new year expected to make budget discussions incredibly difficult, it’s also unclear whether the administration will get any additional money to fulfill its pledges.

The man charged with overseeing the summit follow-through is Johnnie Carson, a several-time former ambassador and longtime diplomat who has been called out of retirement to handle the task.

Leaders attending the summit told Devex they need to see real action in the coming months, from President Joe Biden’s promise to visit the continent to more trade missions and actual investments.

“They need to find a way to demonstrate that U.S. funds have gone into projects in Africa in the next six months. If this is not the case, it’s a sign this was all political posturing, not a commitment to deliver,” Sameh Shenouda, the chief investment officer of the Africa Finance Corporation, told Devex.

Even if the government is slow to move, the private sector can deliver deals quickly, said James Mwangi, CEO of Equity Bank, a major East African entity, adding that he expects concrete deals to result from his meetings at the summit.

During former President Donald Trump’s administration, relationships with countries on the continent were strained, and the U.S. was seen as largely absent. But there was a real shift in tone at this summit, both from the U.S. and African leaders, Mwangi said, adding that African heads were more confident than he’s ever seen.

“They did not come to beg,” or ask for aid, he said; rather, they came with an understanding of their resources and to talk about how to gain better access to U.S. capital.

That shift is partly because “the world will not solve its problems without Africa for the first time,” Mwangi said.

African leaders were also clear that they would not be forced to choose who to work with but instead would work with everyone to meet their development objectives. That means the U.S., China, and other countries can invest and work on the continent, but African nations will not choose sides — including on conflicts such as the Russian war in Ukraine.

As the post-summit chapter begins, here are a few initiatives, sectors, and issues to keep an eye on:

Digital Transformation

One big announcement during the summit was the new Digital Transformation With Africa “signature initiative,” aimed at expanding digital access and literacy across the continent. Congress must approve any new funds needed for the $350 million initiative.

The initiative focuses on three pillars: the digital economy and infrastructure, human capital development, and strengthening the regulatory, legal, and governance that oversee the digital ecosystem.

Efforts around internet access often focus on mobile connections. But to ensure expanded quality connections, including for business, investment in fixed fiber connections is critical, said Cina Lawson, Togo’s minister of digital economy and transformation. No business will put their headquarters or open a subsidiary somewhere without a fiber internet connection, she said.

As Africans gain access, data assets are “not generating sufficient wealth on the continent,” she said. It is essential that technology is “domiciled in Africa to enable African youth to be part of Africa’s digital revolution,” Lawson said.

Food security

Food security continues to be a critical challenge on the continent. “Vigorous action” on agriculture and food security was front and center during Senegalese President and African Union Chair Macky Sall’s speech at the start of the leaders’ meetings.

President Biden announced that the U.S. would provide an additional $2 billion in humanitarian assistance to address acute food insecurity in the continent, and launched a new strategic partnership with the African Union to create a more resilient food system. U.S. Agency for International Development, U.S. International Development Finance Corporation, and Millennium Challenge Corporation will invest as part of the commitment.

The U.S. and African Union will work to improve how communities grow, sell, and buy their food, including investments in infrastructure such as irrigation, roads, and grain storage.

It’s unclear, however, what the agreement could change or what type of additional cooperation or programs it could spur.

Creative industries

Infrastructure investment was at the top of the agenda, but investment demands went well beyond that, including the creative industries such as music, film, art, and sport.

These industries are already important for job creation and income generation — Nollywood, Nigeria’s film industry, is the country’s second-largest employer and accounts for about 2% of its gross domestic product, generating between $500 million and $800 million annually.

And while these industries are traditionally hard to finance, Nigeria’s Bank of Industry employed a group of experts to evaluate film scripts, allowing it to provide financing based on the value of such scripts, Olukayode Pitan, the bank’s CEO said at an event organized by the Atlantic Council.

As Africa’s middle class grows, demand for these industries will increase, but more than just an engine of job creation, film and television distributed internationally can help change perceptions and bring in more foreign investment, experts said.

A greater role for the U.S. Export-Import Bank?

For many years the U.S. Export-Import Bank, or Ex-Im, was a quiet institution, lacking congressional approval of its board, which hampered investments. But with a new board and mandate, the official U.S. export credit agency, charged with supporting American jobs by facilitating exports, is ramping up its work in Africa.

Reta Jo Lewis, Ex-Im’s president and chair, told Devex the bank has not done “nearly enough” in Africa and is working to change that. She attended numerous events throughout the week to sign agreements and get the word out that it’s ready to work on the continent.

The bank signed a $500 million memorandum of understanding with the African Export-Import Bank, a $500 million deal with the Africa Finance Corporation, and a $300 million accord with Africa50. Those agreements should help Ex-Im build a bigger pipeline of potential clients for its insurance, loans, and guarantees to export products to the continent, she said.

Ex-Im has to listen and “target resources to their priorities,” Lewis told Devex.

Diaspora

One thing that stood out at this summit, and was a notable change from the 2014 event, was the role of the African diaspora. Not only were members of the diaspora in attendance, but their role was discussed and amplified, attendees told Devex.

Biden signed an executive order to create a new President’s Advisory Council on African Diaspora Engagement. The 12-member council will be established in the next six months.

The U.S. government should find ways to make it easier for the diaspora community to invest in the continent and use them as a resource to build relationships in trade and business, attendees said.

Move faster

Pledges and announcements are great, but when it comes to making progress, speed matters.

The growing African middle class is vocal in demanding services, which “should create a sense of urgency to address those needs,” Alain Ebobissé, the CEO of Africa50, an organization charged with helping bridge Africa’s infrastructure funding gap, told Devex.

The speed of execution is too slow, and instead of waiting to create perfect projects "in an imperfect environment," he said that institutions should accept those that are good enough and move faster.

A leadership mindset shift is needed — though Ebobissé said he already sees more engagement from some U.S. agency heads he met at the summit — and the U.S. needs to better target its resources. There is often financing available when projects are bankable, but little support to make sure projects are ready for investment, so the U.S. should focus on project preparation, he said.