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Priorities for US-Africa Commercial Policy in the Biden Administration Aubrey Hruby Atlantic Council AFRICA CENTER

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Priorities for US-Africa Commercial Policy in the Biden Administration Aubrey Hruby Atlantic Council AFRICA CENTER Atlantic Council AFRICA CENTER Priorities for US-Africa Commercial Policy in the Biden Administration Aubrey Hruby Atlantic Council AFRICA CENTER The mission of the Atlantic Council’s Africa Center is to promote dynamic geopolitical partnerships with African states and to redirect US and European policy priorities toward strengthening security and bolstering growth and prosperity on the continent. This report is a product of the Afro-Century Initiative in partnership with the Africa Finance Corporation Priorities for US-Africa Commercial Policy in the Biden Administration Aubrey Hruby ISBN-13: 978-1-61977-169-7 Cover: Then-US Vice President Joe Biden addresses the US-Africa Business Forum in Washington on August 5, 2014. The forum is part of the US-Africa Leaders Summit, bringing nearly fifty African heads of state together for three days of meetings and events. Photo credit: Reuters/Jonathan Ernst. This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The au- thors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions. April 2021 Priorities for US-Africa Commercial Policy in the Biden Administration Table of Contents Introduction 1 Unique Moment 2 Three Pillars of Opportunity for US-Africa Reengagement 4 Commercial Opportunity 4 Climate and Green Growth 6 Green Bonds 7 Dedicated Climate Funds from Multilateral Development Institutions 7 Debt-for-Climate Swaps 7 People-to-People Ties 8 Text Box: Snapshot of US-connected Creative Sector Expansion 2020-2021 10 Recommendations and Conclusion 12 Double-down on Existing Programs and Tools 12 Make Good on the Biden Plans for Leadership in Climate Finance 13 Launch Flagship Initiatives 14 About the Author 16 Acknowledgements 16 II ATLANTIC COUNCIL Priorities for US-Africa Commercial Policy in the Biden Administration Introduction ith a renewed focus on multilateralism, edging Africa’s increasing importance to US priorities President Joe Biden, in his first one hundred and enhanced standing on the global stage. Doing so days, has actively been reengaging with tra- will allow the new administration to deepen commercial ditional US allies and partners repeatedly and people-to-people ties with African nations, benefit- Wsidelined by the Trump administration. African countries ing US businesses, furthering US interests, and working have been included in this effort. When addressing the to address global challenges, such as public health and African Union Summit of African presidents in February, climate change. This more multifaceted and nuanced he reaffirmed the United States’ commitment to partnering engagement with African states will set a foundation for with African nations to address challenges including cli- stronger US-Africa partnerships, support mutual eco- mate change and erosion of democratic institutions. Biden nomic growth, and contribute to strengthening US global has gained widespread praise for supporting the appoint- leadership. ment of Dr. Ngozi Okonjo-Iweala as the first African head of the World Trade Organization (WTO), nominating officials While cooperation with African states is critical to regional who have deep experience in African markets to Cabinet stability and global security, this issue brief sets aside se- positions, such as Linda Thomas-Greenfield as ambassa- curity policy and focuses on ways the Biden administration dor to the United Nations, and putting together a historical- can strengthen its commercial policy and public diplomacy ly diverse government, including many senior members of with African nations. This effort includes building on com- the African diaspora. Building on this early progress, Biden mercial policies started under the Trump administration, has an opportunity to reset US-Africa policy by not only facilitating green growth, and deepening people-to-peo- prioritizing it at a level unseen during the last four years, ple ties. In doing so, Biden’s domestic priorities of promot- but also changing the long history of siloing Africa policy. ing diversity and climate responsibility will be reflected in Africa policy and ensure US businesses can take advan- The Biden administration should look to further integrate tage of increasing opportunity in African markets and re- African nations into broader US foreign policy, acknowl- main competitive globally.1 1 See the domestic priorities in: “The Biden Plan to Build Back Better by Advancing Racial Equity Across the American Economy,” Biden-Harris 2020 Presidential Campaign website, accessed March 9, 2021, https://joebiden.com/racial-economic-equity/; and “Fact Sheet: President Biden Takes Executive Actions to Tackle the Climate Crisis at Home and Abroad, Create Jobs, and Restore Scientific Integrity across Federal Government,” The White House, press release, January 27, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/27/fact-sheet-president-biden-takes-executive- actions-to-tackle-the-climate-crisis-at-home-and-abroad-create-jobs-and-restore-scientific-integrity-across-federal-government/. ATLANTIC COUNCIL 1 Priorities for US-Africa Commercial Policy in the Biden Administration Unique Moment his new decade has created a unique moment to Africa, with little to no job displacement.6 A similar trend is reset US-Africa policy thanks to a combination of seen regarding broadband connectivity, with global tech two main factors: one, the US government’s grad- giants such as Google, Facebook, and others investing in ual recognition of the need to facilitate investment undersea cables to expand internet capacity, and Tesla Tand support US companies to effectively do business in and Alphabet piloting small-satellite and light-beam tech- emerging markets, and second, the compelling growth and nology, respectively, to expand and decrease the cost of increasing attractiveness of African markets. In terms of broadband.7 demographics, it is clear the continent will only command more attention over the coming decades, not less. While Furthermore, the African Continental Free Trade Area much of the rest of the world’s population is aging, Africa’s (AfCFTA) is overcoming the long-standing structural chal- median age is just eighteen with only 3 percent of the pop- lenge of fragmentation on the continent that has discour- ulation over sixty-five.2 This stands in contrast to current aged investment. A larger, more integrated market is on economic powers including China, where birth rates de- the horizon with a combined consumer and business base clined 15 percent in 2020 after already setting record lows of $6.7 trillion by 2030.8 While it will take a decade to im- in 2019.3 Africa also is home to the highest urbanization plement the details of this agreement, the continent-wide rates in the world, with cities set to absorb two-thirds of the market will better serve US interests, particularly for US com- expected doubling of the continent’s population between panies looking to expand, sell, or invest across the region. now and 2050.4 In less than ten years, the continent will be home to seventeen cities with over five million inhabitants; Africa’s growing economic importance also is likely to for comparison, Europe is currently home to just four and result in more influence and weight in international orga- North America only two. Thanks to millions of easily reach- nizations such as the WTO and the United Nations (UN), able consumers, these urban centers will become leading where the continent maintains a voting block of forty-four commercial hubs.5 and fifty-four, respectively. Biden administration priorities, such as tackling climate change, will require international Africa’s young, urban population is increasingly more collaboration, and the recommitment to multilateralism will digitally connected to the world with almost half of the continue to elevate African countries’ role in global govern- population already subscribed to mobile services and 50 ing bodies. Notably, the United States is rejoining fifty-one percent using smartphones. By the end of 2025, there will African countries in the Paris Agreement. be nearly 680 million smartphone subscribers, including thirty million connected to fifth-generation (5G) networks. The continent’s growing importance is an opportunity While African nations require more investment in digital that has not gone unnoticed by US allies and compet- infrastructure, operators in the region have already com- itors. Today, African nations enjoy a greater choice of mitted to investing $52 billion in infrastructure between partners, including interest from East Asia, Russia, Saudi 2019 and 2025, and studies have shown that faster in- Arabia, Turkey, Qatar, and the United Arab Emirates, ternet contributes to enhanced employment outcomes in providing African governments greater autonomy in the 2 Jeff Desjardins, “Mapped: The Median Age of the Population on Every Continent,” World Economic Forum, February 20, 2019, https://www.weforum.org/ agenda/2019/02/mapped-the-median-age-of-the-population-on-every-continent/. 3 Helen Davidson and Martin Farrer, “China Birthrate Slumps as Experts Blame Changing Attitudes,” Guardian, February 10, 2021, https://www.theguardian. com/world/2021/feb/10/china-birthrate-slumps-experts-blame-changing-attitudes#:~:text=The percent20data percent20released percent20on percent20Monday,China percent20was percent20founded percent20in
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