The United States wants to fundamentally change economic relationships with Africa – a lot is at stake for the countries there. At an economic summit in Angola, they tried to avert the worst.
According to local media, around 1,500 delegates took part in the economic summit between the USA and Africa in Angola’s capital Luanda this week. They wanted to maintain relationships and, if necessary, complete deals. It is not only since US President Donald Trump that the economic relationships have lost strength, says TK Poee, economic expert at the Wits University in Johannesburg.
“America has hardly invested in Africa, especially in the past five or ten years,” he says. “It was independent of Republicans or Democrats. The American presidents and their parties simply did not see Africa as a valuable goal,” is his analysis.
US ambassadors should Trade contracts thread
For example, US President Joe Biden had only visited the African continent once in his entire term. TK Pooe says: The USA is still one of the most important trading and investment partners. If it goes to Troy Fitrell, it should stay that way. He represented the US government at the summit in Luanda and wants to expand the economic commitment of the United States.
Next to him, the US government sent further delegates to the summit. However, there were no really senior representatives. In the future, Troy Fitrell described the US ambassadors of the economy in his speech. The private sector is directed, he said: “Our messages work for you. We have changed the incentives. It is now your main goal and it is what we am evaluating on how you support you.”
Fitrell calls this “Commercial Diplomacy” – i.e. economic diplomacy. In the ears of the state and government heads from Africa represented in Angola, this should have sounded good. The summit is currently important to establish contacts, to gain clarity and to show the possibilities of the African market – such as great raw materials, says the Economic observer TK Pooe from Johannesburg.
An important US law is about to
However, there was no clarity at two central construction sites in the economic relationships: the US law AGOA and the announced tariffs of US President Trump. With the law Agoa, the African Growth and Opportunity Act, the US Congress made its way for better economic relationships 25 years ago. In this way, selected countries from the Subsahara region can then export certain goods to the USA.
Only: Agoa expires this year. This is afraid of investors, such as in the poor Lesotho, in the south of Africa, says TK Pooe. “Chinese citizens came to build a factory in Lesotho. They knew that Agoa allowed them to export them to the USA,” he explains. “Now they no longer want to make investments, they do not want to expand their factories,” says Poee, describing the effects on the unclear future of AGOA.
According to the regional media, the Economics Minister Mozambiks, Basilio Muhate, demanded an extension of Agoa by ten years. Similar demands came at the summit in Angola from representatives from Namibia.
Many jobs could be omitted
Many countries are equally concerned with the import tariffs announced by Trump. Most of them are still exposed to the beginning of July, but would then hit some African countries particularly hard. Then Madagascar is to be occupied with tariffs of 47 percent. Other countries also hit: Mauritius threatens 40 percent, Botswana 37 percent and the small Lesotho even 50 percent tariffs. Larger states such as South Africa or Algeria in the north of the continent are to get 30 percent each.
Important jobs could be omitted. In Lesotho it could hit the essential jeans industry for the country. Governments should therefore look at the coming days with concern. Most US tariffs are considered exposed to July 9th. So far, it is unclear whether they really come into force.
The Africans meanwhile rely on relationship care and hope that Americans Africa will continue to see as a favorable country of production and investment target for coveted raw materials. Because there are many of them in Africa. China has also recognized this for several years, says TK Poe. The economic power is investing strongly in the African infrastructure.
