The Private Sector and Trade: Powering Africa's GrowthJendayi Frazer, Assistant Secretary for Affrican Affairs
Remarks at the Foreign Press Center, National Press Club
May 11, 2006
Remarks as Delivered
It gives me great pleasure to be here today and to formally announce that the United States will host the fifth annual U.S.-Sub-Saharan Africa Trade and Economic Cooperation Forum, commonly referred to as the AGOA Forum, here in Washington, on June 6th and 7th. We are very pleased to have the opportunity to do so, and we look forward to the strong and active participation of all AGOA-eligible countries, as well as presentations from the African private sector and African civil society.
The original legislation that created AGOA, which was passed by our Congress in 2000, also mandated an annual high-level event at which U.S. and African economic and political leaders could meet to discuss expanding trade and investment relations between the United States and sub-Saharan Africa.
Traditionally, this Forum location alternates between the U.S. and an African country as a host. Last year, as you know, Senegal graciously hosted the Forum, and the event was a resounding success. This year, the Forum returns to Washington, D.C.
AGOA has been, and continues to be, a success. The overall statistics tell part of the story: in 2005, U.S. imports from AGOA countries totaled $38.1 billion, up 44 percent from 2004. This is an impressive increase in a wide array of product categories, not just petroleum. While U.S. imports of apparel from AGOA countries dropped in 2005, imports of products in other sectors, including agricultural products, machinery, and electronic products, all increased.
But to really appreciate AGOA's success you have to look at specific cases:
Under the leadership of the Southern African Trade Hub, Namibia, Botswana and South Africa developed a single administration customs form; with only one legal document required for transport, transportation costs will be reduced and shipment times should shorten.
The West African Trade Hub provided training for more than 40 firms and helped them participate in U.S. trade shows. The result was over $1.4 million in new sales, with $11 million in sales pending at year-end, including an apparel sale to Wal-mart. A female-owned Cameroonian company signed a contract with a U.S. textile firm to produce $3 million annual to supply medical scrubs.
Due in part to success stories like these, sub-Saharan Africa has been turning in an impressive growth performance. Real GDP growth in sub-Saharan Africa increased in 2004 by an eight-year high of 5%; and of the 17 countries that exceeded this rate of growth (13 were not oil-producing states).
However, there is one key area in which Africa still lags behind other parts of the world. That area is its business climate. Since 2004, the World Bank has collected and annually published indicators on doing business that track, for example, the number of days it takes to start a business, or the average cost required to do so, or how many procedures are required to register a piece of property.
This brings me to the theme of this year's Forum, which is: “The Private Sector and Trade: Powering Africa's Growth.” We have chosen this theme because we strongly believe that the real driving force that will help Africa reach its full potential is not foreign assistance, but the energy and initiative taken by Africans themselves through a vibrant private sector.
Thanks to AGOA and years of successful trade liberalization, most African countries already face low or zero tariffs for the great majority of the products that they export to the United States . The key to greater economic growth in Africa , therefore, lies primarily in making the required reforms within African countries so that African entrepreneurs can take full advantage of the opportunities that are now available to them.
The annual AGOA Forum is not just a meeting of governments, but also a meeting of representatives from across the spectrum of business and civil society. Now I would like to introduce to our Deputy Assistant Secretary for African Affairs, Linda Thomas-Greenfield, who will elaborate on the mechanics of the event.