President Obama has announced
that he will be making a
homecoming African tour and
hopefully this is the beginning of
a series of such tours .
Africa’s son and the most
powerful man on the planet will
crisscross the continent from
Senegal in the west to South
Africa in the south and Tanzania
in the east, a grand safari.
The choice of countries is
possibly based on the criteria
outlined in my previous paper on
how Obama can engage Africa,
namely , size of countries and
their importance to the US ; the
long term relationship as an ally
or foe ; economic interests ;
security interests ; how aligned
are these countries with the
values of America and; the needs
of these countries, namely , their
need for foreign aid .
A major criterion must be added
to this list , namely , the China
factor. Since I wrote the paper
the Chinese leader has made
visits to the continent and
America is realizing that China is
making a major effort to engage
Africa.
Obama ’s visit is no doubt an
effort to emphasise that America
is a major player on the
continent and wants to be a
partner in developing the
resources of the continent. What
should be the wish list for the
countries visited and what are
the implications for the rest of
the continent, other countries
which will obviously look forward
to a visit by the President ?
In particular, what should they
do to merit a visit? The exposure
that it gives the countries visited
and in particular, the
opportunities in terms of
investment and tourism can not
be underestimated . In this paper
the emphasis is on business
opportunities on the continent
and the benefits of the visits will
be maximized if countries can
demonstrate that they are good
destinations for investment.
Why Senegal , South Africa and
Tanzania ?
Why were these three countries
chosen ? A quick review
demonstrates how the criteria
noted above played a significant
role in Obama’ s choice . Senegal
is a regional hub, playing an
increasing role in security issues
in Mali and the Sahel region as a
whole.
The bitterly fought recent
election which saw a siting
president accept defeat to a
challenger established the
democratic credential of that
country. Senegal has been stable
since independence albeit with a
long running insurgency in the
Cassamance region .
The US has economic presence ; it
is among the top five
destinations for Senegal’s
exports, with the US accounting
for 4 .8 % of that country’ s exports,
the fifth largest destination .
South Africa is the guardian of
the Cape of Good Hope where a
significant proportion of
American trade is routed
through.
South Africa, the continent’s
largest economy conducts
significant trade with America ,
with the US being the second
largest destination (8 .6 % ) for
South African exports, after China
the leading destination . The US ,
accounting for 8 % of South
Africa’s imports is the third
largest source after China and
Germany .
Tanzania ’s position in the group
has security implications in the
still volatile region , notably
Somalia and Yemen. The country
which has also made strides in
governance and economic
liberalization has seen
impressive economic growth rates
for over a decade .
It is a richly endowed country
with vast potential in oil ,
uranium , gas , agriculture and
tourism. Obama may also be
sending a message to Kenya, the
neighbouring country where his
father hails from, notably, that
Kenya should get its act together
to merit a visit. Tanzania which
has borders with eight countries
is in a good position as a
regional hub.
It does not have significant trade
relationship with the America, at
the moment; the US does not
feature among the top five
countries in terms of destination
for exports or source of imports .
The wish list and implications for
other countries All three
countries possess resources that
would be of interest to the US ,
are of interest to US security
concerns and are within Obama ’s
stated views on making the world
a better place .
What should be the wish list of
these countries and how should
they prepare for Obama ’ s visit?
The overall objective should be
to market their countries with
regard to governance ,
opportunities for US investors
and the market for goods and
services in those countries and
the US .
A key consideration should be on
how the US should assist in the
development of the
infrastructure , a major
impediment to economic
development and trade . Senegal
must emphasise its position as a
regional hub and base for US
investment and security projects .
It ’s relatively good ( particularly
compared to neighbouring
countries) infrastructure and
links with countries in the region
gives it a strong edge.
The Senegalese President stated
in a speech in July 2012 that his
government wanted an optimal
energy mix , with a view to
reducing supply costs over the
medium and long term through
diversification —natural gas ,
hydropower, and renewable
energies —as well as through
regional integration. American
companies should be well placed
to play an important role in
energy projects .
Senegal has vast solar energy
potential and American
companies who have pioneered
shale gas franking techniques
should be invited to make
explorations and investment .
Other opportunities that should
be explored include investment
in fertilizer production and other
downstream activities for the
country’s phosphates .
Investment opportunities should
also be explored for
manufacturing using cotton ,
groundnuts and fish,
commodities where Senegal has
abundant raw materials . US
investment and markets can also
be explored for the country’s
ship construction and repair
industry .
The country’s tourism industry
could benefit from US investment
and visitors . Senegal still has a
lot to do to make the country
attractive to investors . The World
Bank ranked the country 166 th
with regard to ease of doing
business in 2012 , having slipped
by four places in the index from
2011 .
The country’s five worst rankings
in terms of individual indicators
are : getting electricity ;
registering property ; paying
taxes ; protecting investors and
enforcing contracts. In the run
up to Obama ’s visit the country
needs to do a lot to make it an
attractive destination for
investors .
South Africa will be looking for
acknowledgement and concrete
measures to develop and expand
its position as the largest , most
developed and diversified
economy on the continent. It
should be looking at getting US
companies to invest in
production for the home market
and exports to the rest of Africa
and the world.
US investment in power
generation and support in
marketing South Africa as a
tourist destination should be
areas to stress. US support for
regional integration would also
be appreciated. Of particular
importance is US help in
addressing the dichotomy in the
country, a first world advanced
economy and a third world
developing economy existing side
by side.
Despite steady but relatively low
economic growth and sound
macroeconomic and fiscal policies
the economy has a daunting
problem of skill shortages co -
existing with very high
unemployment. The World Bank
stated that “the potential for
faster growth has been held back
by industrial concentration , skill
shortages, labour market
rigidities , chronically low savings
and investment rates and spatial
barriers from the former
apartheid system .”
US help in revamping the
educational sector with emphasis
on math , science and technical
skills and assistance in the
regulatory and delivery framework
of the industrial and labour
markets should be a priority. The
country scores quite high, 39th ,
in terms of the World Bank ’s
ranking on ease of doing
business .
The worst individual rankings
are : getting electricity ; trading
across borders ; resolving
insolvency , enforcing contracts
and registering property. South
Africa needs to do a lot to rise up
in rankings in these areas where
it currently lags behind . In
addition , there are two areas
which are not covered by the
rankings , namely , availability of
skilled labour and crime, two very
important issues that the country
needs to address to demonstrate
that it is a good destination for
investment.
American help, possibly modelled
on the New York City experience
in crime reduction should be
considered. Tanzania is well
endowed in minerals , agriculture
and tourism potential. The
country will be looking for US
investment in a wide range of
sectors and in particular, in
mining and processing and
manufacturing the plethora of
raw materials for the domestic ,
regional and world market .
It would be looking to develop its
huge tourist potential in terms of
investment in facilities and
marketing the country to US
tourists. Investment in the
agricultural sector in a country
with a huge area and a wide
range of agro -climatic conditions
would be welcomed.
Agricultural production has been
stagnant because of low yields
even with this huge potential
and US support and investment
should be considered. Tanzania
is ranked 134 th in terms of ease
of doing business . In terms of
the individual indicators the
country ranks lowest in: dealing
with construction permits ;
registering property , paying
taxes ; resolving insolvency and ;
getting credit .
The country needs to take
measures to improve these and
other indicators to demonstrate
that it is open for business . It
has identified bottlenecks in the
infrastructure as priority in its
development plan. Efforts would
need to be made to continue and
escalate the fight against
corruption and in training to
ensure that a skilled workforce is
available if it is to continue its
rapid economic growth .
All three countries need to make
preparation for Obama ’ s visit so
that they can get the maximum
benefits . They must prepare an
agenda long before the visit to
ensure that Obama ’s team is
made up of the relevant staff and
potential investors . They need to
highlight the sound
macroeconomic and fiscal policies
that all of these countries have
put in place and measures that
they are taking to make them
more attractive to investors .
They need to highlight their
importance in terms of security
issues. This trip will hopefully be
the start of other African tours
and countries should try to gear
up for future visits by Obama .
Countries which could be next on
the list need to closely monitor
developments in the three
countries and prepare for visits .
Obama as a “change ” President
is likely to visit countries that
meet his progressive agenda and
America’ s interests .
Other countries need to find out
what are the prime motivators for
Obama to come calling . A country
with democratic, legal, press and
economic freedom , sensible
macroeconomic policies is likely
to attract Obama ’s attention and
if he decides to pay a visit it
could give that country an
opportunity to sell its attributes
to the world and attract investors
and tourists.
Obama is star attraction and
countries he visits need to make
use of the brand . Senegal, South
Africa and Tanzania must do
their best to get value from the
brand. This means doing an
Obama on Obama , who would
have done considerable research
on countries he is visiting.
They should do their homework
by letting him, members of his
team and business executives
know what their countries
priorities are ; do media
campaigns involving print ,
broadcast or digital slot to
engage a wider pool of potential
investors and policy makers and ;
get the home team aware and
prepared for the opportunities
before and when they meet with
the American team .
The emphasis must be on the
infrastructure , including physical ,
governance and education and
regional projects. Obama is keen
on infrastructure projects and so
he should be eager to discuss
how America can help build and
maintain Africa ’s infrastructure.
Obviously, he and his team and
business executives
accompanying them would need
to be convinced of the viability of
proposals, benefits to the US and
the position of the competition .
African countries must emphasise
that America is losing out in the
current scramble for the
continent’ s resources and that
the US needs to up its game .
Africa has got resources that are
in strong demand and other
countries, including China, India
and Brazil are taking a keen
interest in the continent . For
Africa the competition is good
and it would welcome America
taking an active role in
developing its resources. The US
has certain attributes that make
the country a good partner in
aid , investment, trade and
security.
The emphasis must be on
investment and trade , to explore,
discuss and decide on areas ,
projects and business deals by
African and American
participants in meetings. Other
African countries must take note
and try to be next on the list
which will give them a spotlight
and opportunities.
Location : Lema Rd, Moshi,
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