Kerry Calls for U.S. Investment in Africa, Warns on Corruption

Secretary of State John Kerry today urged greater U.S. investment in Africa to help develop a U.S.- Africa relationship focused more on shared opportunity and economic growth than on crisis management.

“For too long, ties between the United States and Africa were largely rooted in meeting the challenges and crises of the moment,” Kerry told an audience of diplomats and dignitaries in Addis Ababa, Ethiopia.

“We want more American companies to be here, to invest here -- both to unleash the power of the private sector in Africa and to create jobs in America,” Kerry said, even while warning of the damage that conflict, corruption, and curbs on freedoms can do to Africa’s potential.

The top U.S. diplomat is on a five-day visit to Africa, with stops in Ethiopia, South Sudan, Democratic Republic of Congo, and Angola.

Africa has eight of the world’s 10 fastest-growing economies and will have a larger workforce than India or China by 2040, Kerry said. Conditions are ripe for investment in its people, partnerships with the U.S. and freedoms, he said.

“The time is now for us to get ahead of the curve, to invest in education for the vast and increasing number of young people, to build a more open exchange of ideas and information that leads to partnership and innovation,” Kerry said.

IBM, Microsoft

As part of that effort, President Barack Obama is “committed to a seamless renewal” of the African Growth and Opportunity Act, which gives trade preferences to certain sub-Saharan African commodities to support regional economies and broaden ties, Kerry said.

He noted that U.S. companies are active in Africa. International Business Machines Corp. (IBM), based in Armonk, New York, has invested at least $100 million in the continent, while Microsoft Corp. (MSFT), with headquarters in Redmond, Washington, is investing in what it calls the “Mawingu,” the Swahili word for “cloud.” Google Inc. of Mountain View, California, is exploring ways of developing underused spectrum to bring broadband Internet access to remote communities, Kerry said.

With 60 percent of the world’s arable land, Africa’s agribusiness opportunities are huge, and the U.S. is encouraging investment in crops with greater yields and better resistance to extreme weather, he said.

Crop Yields

The U.S. is investing “several billion dollars” in the Feed the Future program to improve seed quality, enhance farming methods, protect against soil erosion, and link small farmers to markets, he said.

Climate change poses the greatest risk to African agriculture and a danger to its economies, Kerry said. The United Nations Intergovernmental Panel on Climate Change has warned that parts of Mombasa, Dakar, Monrovia and dozens of other coastal cities could be under water by the middle of this century.

Yields from rain-fed agriculture in areas of Africa could decline by 50 percent, Kerry said, and an additional 100 million people or more will be living without water or face greater difficulties with water supplies, he said.

Corruption is another obstacle to investment, with the African Union reporting it “costs Africans tens of billions of dollars, if not more,” Kerry said.

Transparency and accountability attract investment and create a more competitive marketplace, he said. “It’s a responsibility for citizens in Africa and in all nations to demand that public money is providing services for all, not lining the pockets of a few.”

Press Freedom

Kerry also stressed the social and economic benefits of freedoms, without referring directly to repression, an issue in Ethiopia, where press freedoms are curtailed, as well as in Angola and DRC.

He noted that over the next three years, 37 of the 54 African nations will hold national elections, including 15 presidential elections.

“These elections will be vitally important, but elections cannot be the only opportunity for citizens to shape the future,” Kerry said. “Nations in Africa, like nations all over the world, are strongest when citizens have a say, when they have a stake in their nation’s success.”

As part of U.S. efforts to support African economies, Kerry touted the president’s Power Africa Initiative and the U.S.- Africa Clean Energy Finance Initiative. “We’re leveraging public resources to support $1 billion in clean energy investment from the private sector,” Kerry said.

Military Support

Referring to his stop in South Sudan yesterday, Kerry said conflict remains a challenge to the continent’s stability and development. The U.S. supports the African Union Regional Task Force against Lord’s Resistance Army rebels in eastern Africa, has committed up to $100 million to support AU and French forces in the Central African Republic, and $67 million in humanitarian assistance, he said.

The U.S. provides financial and logistical support to AU-led efforts in Somalia, where the al-Qaeda-linked al-Shabaab Islamist group “is under significant pressure,” Kerry said. The government in Washington is also working to strengthen Nigeria’s institutions and military “to combat Boko Haram’s campaign of terror and violence,” he said.

“The African Union’s commitment to silence the guns of Africa by 2020 is an ambitious goal,” Kerry said. “It’s the right goal. It’s a vision worth fighting for and one we will do everything in our power to help you achieve.”

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Bruce Stanley, Ville Heiskanen

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