The Americans Are Coming!

KUMAR

First it was the Chinese and now the Americans are heading to Africa. The US anticipates trade relations could reach up to 25 billion dollars. So what took our Yankee partners so long? CNBC Africa sat down with Anthony Foxx, US Secretary of Transportation, and Haroon Kumar, Assistant Secretary of Commerce for Global Markets.

MUTIZWA: This is the first trade visit by a US Transportation Secretary, why the long wait?
FOXX: We recognise Africa is an incredibly important continent to the US’ interests, not only political but economic interests. There’s an awful lot of commerce that occurs between the US and Africa; we have 14 businesses here with us. We are travelling from Ghana to Mozambique to South Africa and Kenya. Our goal is to straighten ties between governments but also straighten economic ties.

MUTIZWA: What’s the message you’re delivering?
FOXX: Well, it is that our doors are open for business and in fact we have many businesses that are already doing work here in Africa. We have a very good track record of American businesses. Not only generating economic returns but also putting in training programs, hiring locally and making sure we are putting people to work on this continent. That’s a very big part of what we want to do.

MUTIZWA: I referred earlier to the fact that it’s the first time that you guys are coming here. People will suggest that perhaps you guys are coming here because you’ve seen the Chinese really squirming on to the continent. I mean, when you try to look at the figures, the difference is huge. Look back into 2014, the total trade between Africa and the Chinese was about 200 billion dollars but the total trade between Africa and the US, 25 billion dollars. Is it because of the Chinese that you guys are coming?
FOXX: It’s because we see the African continent on the rise and we see an opportunity for US businesses and government to strengthen our economic and our political relationships. The US sees a very important set of partners here in Africa. We are not here because of China; we are here because of Africa.

MUTIZWA: I was hoping that you would give me some target numbers for the next few years in terms of growing Africa-US trade partnership.
FOXX: Numbers are very good but the reality is that we nothing upside in the African continent. Whatever the baseline of relationships, Africa is growing. It’s the second largest growing continent in the world right now. And we see an opportunity not only for US businesses to strengthen their relationships but we help create jobs, we help prepare people to work.

MUTIZWA: I was going to make the point that there’s a different strategy between the US and the Chinese of course because you guys focus more on creating environment for your businesses. Is there any other opportunity that perhaps there could be greater involvement by the US government in terms of helping to create that environment and also boosting trade numbers?
KUMAR: In South Africa alone, we have six hundred US companies employing a hundred and fifty thousand South Africans contributing about ten percent of the country’s GDP – that is enormous. We would like to see a significantly increased engagement between US business and sub-Saharan African countries. What can the US government do? Well, there’s already a lot that we are doing. ‘Power Africa’ is a major initiative focused on giving thirty thousand megawatts of clean energy to markets. That is a great example of a public-private partnership. The US government is putting three hundred million dollars a year into it and US companies.
FOXX: In the department of transportation, we’ve also had a longstanding partnership between many countries in Africa through something called ‘Safe Skies For Africa’. This is an initiative to build the capacity of civil aviation systems in Africa to be as safe as possible.

MUTIZWA: A very important aspect.
FOXX: Yes, very important. I understand that logistics are a big part of the challenge for Africa in terms of going forward. We are bringing technical capacity along with US businesses to bear here.

MUTIZWA: Absolutely. I was looking at the diversity of the sectors that you are representing here today. So I’ve got transportation, energy, equipment and services and of course agricultural equipment. What informed the selection of that focus?
KUMAR: We have a fairly rigorous process of picking companies to come on these trade missions. We look at the demand, what those countries need and which are the best companies that can bring capabilities, so we have a nice process. And actually, it’s working out very well. This afternoon there’s going to be partnership signing; we are seeing handshakes and agreements occurring.

MUTIZWA: But also there’s something else that it’s pointing to: the diversity of the relationship beginning to come to the fore. If you’re going to talk about any trade relationship between the US and Africa in the past, you would have talked about oil whereas these days, we are talking about the consumer, we are talking about electronics, we are talking about ICT. So in terms of your focus, are you finding it easier now to find companies to bring to the continent?
FOXX: Another aspect of this is that the world is just getting smaller. As people are more connected, they want to be more connected and I think whether it’s technology, whether it’s agriculture, whether it’s logistics, what’s happening is that Africans, not just the government, not just the private sector but people on the streets are looking for ways to get connected to the twenty first century global economy.

MUTIZWA: You have been to Ghana, you have been to Mozambique, you probably wouldn’t have experienced some of the things that we find difficult when you travel around the continent. You are in transportation so air services will be one of the aspects that you cover. One of the challenges that you find around the continent is actually flying from one part of Africa to another part of Africa. It’s easier probably to go to Dubai before you go back to Lagos or some other part of the continent. Is there any way in which you are working with African governments to try to ease that?

FOXX: Look, I think it’s part of the trade mission. One of the things we do is we listen and we have taken a lot of opportunity to listen to governments about the challenge of border crossings and interoperability of the transportation networks in Africa. Frankly, I think it could be a constraint on Africa’s ability. We have an interest in trying to be helpful, of course, led by the African countries themselves and trying to help find ways to get through – we want to be part of the solution.

MUTIZWA: You’ve been to Mozambique, you’ve been to Ghana, what are some of the key things that have come up in the discussions that you’ve had with the business people as well as government people there?
FOXX: First of all, I think every country has a vision for what it wants to achieve and I think that’s very important because as they say in the bible, without vision, people perish so having a vision is very important. Led by that vision, we have tried to tailor the teams that come in to talk to them whether it’s the businesses or whether it’s our technical teams.There’s a question about how real transportation happens in a hub like South Africa to the rest of the continent. That’s a conversation we’ve brought expertise here to have discussions about.

MUTIZWA: And what’s your stance in terms of the companies that you spoke to when they see someone like yourself coming out to the continent?
FOXX: I sense a great deal of enthusiasm on both sides. Our companies are actually eager to invest and I think the discussions that I’ve had with several of our teams have been “Can we get our goods to other parts of the continent?” and “Can we do it at a reasonably predictable cost?”. These are some things that are up to the government officials and I think that there’s receptivity in understanding that businesses are going to want that.
KUMAR: I will echo that. I will say that governments and businesses have been very welcoming of our visit. Our focus on transportation, energy, agriculture has been welcomed because it meets the needs of the government and the people.

MUTIZWA: But what about the challenge of actually doing the trade itself because it’s easy for companies to sign an agreement and then try to get their goods over here. We know about the challenges of actually getting those goods through custom, transport and those kind of things.
KUMAR: Yes, those are significant challenges. If we were to think about challenges and the opportunities, one of them is logistics and transportation. The second really is moving goods so you don’t fill new customs forms, new procedures especially in a continent like Africa where there are multiple countries for you to go through. So, easing that whole movement – not only the hardware of the moving but also the software of the moving – is critical. A third one really, is having policies that do not impede or create barriers to trade.

MUTIZWA: I want us to talk about another one and that’s of course the big elephant in the room, corruption and how to deal with that because we know that corruption is an issue when you come to trade with some African countries.
MUTIZWA: Anthony Foxx, US Secretary for Transportation, and Arun Kumar, US Assistant Secretary for Commerce and Global Markets, thank you for your time.