Somaliland:Why Obama’s Africa Trip Matters
The president’s visit will cement enduring U.S. commercial relations with the continent.
By Jake Bright and Aubrey Hruby
July 25, 2015
As President Barack Obama visits Kenya and Ethiopia this week, media coverage has fallen predominately into one of two categories: the return of a native son or the threat of terrorism in East Africa.
This is not completely unexpected. The trip will be Obama’s first as president to his father’s homeland, and Kenya does face security challenges related to Al Shabaab in neighboring Somalia. Still, press coverage so far seems to be missing a core theme of the president’s trip: trade, investment and enterprise. Obama’s most visible commitment is attending the Global Entrepreneurship Summit in Nairobi, which has attracted 200 American investors, including Shark Tank’s Daymond John and AirBnB’s Brian Chesksy, who will interact with Africa’s future business leaders.
One might expect us to make the hard case for greater priority of economic issues in U.S.-Africa relations – something reminiscent of the aid versus trade debate that’s played out for many years. That is only partially correct.
Today, the undeniable progress in business, innovation and entrepreneurship occurring in places like Kenya and Ethiopia has done two things: turned trade and investment into a priority for U.S. diplomacy toward Africa and rendered unidimensional doctrines toward the continent obsolete. Much of that has to do with Sub-Saharan Africa’s rapidly changing realities, which are influencing a shifting political economy between the U.S. and the region.
The increased attention on trade and investment in Africa is a result of several core factors. Some of the continent’s largest economies are not only experiencing rapid growth and reform, but they’re also receiving record foreign direct and personal investment. The continent has also hit a number of demographic milestones, such as having the world’s fastest-growing populations and consumer class. Finally, it is also experiencing mass modernization of digital and hard infrastructure, such as broadband capacity, power, roads and bridges.
For each of these, more examples uniquely connected to the U.S. are emerging daily. U.S. companies continue to expand into Africa, attracted to opportunities around its surging economies and new consumer classes. Starbucks recently announced its entry into Sub-Saharan Africa. IBM launched its first Africa research facility in Nairobi with a commitment of $100 million. Facebook recently opened its first Africa office. GE is heavily engaged in upgrading Africa’s infrastructure in power, healthcare and transport.
Africa’s burgeoning technology sector is also attracting U.S. investment. In Kenya, the country’s iHub tech center, which has launched over 150 companies, has also received financial support from Google and eBay founder Pierre Omidyar. One of iHub’s recent inventions – the solar powered BRCK mobile WiFi router – counts Internet pioneer Steve Case as an investor.
Nigeria’s leading e-commerce startups – Jumia and Konga – have received over $300 million in venture capital, much of it from American funds. The founders of each, including Sim Shagaya and Tunde Kehinde, worked and studied in the U.S. before launching ventures in Africa.
In fact, most of Africa’s new tech entrepreneurs have personal and financial ties to the U.S. Many are raising startup capital from the continent’s increasingly affluent immigrant population in the U.S. that now (collectively with the global diaspora) remits more money back to places such as Kenya and Ethiopia than foreign aid for all of Africa.
A multifaceted U.S. foreign policy toward the continent, including an enduring prioritization of commercial relations, may be the one of the longest lasting legacies of Obama’s current Africa visit. Either/or doctrines that address business without security or politics without markets will become increasingly less credible. The days of aid versus trade Africa debates are over.
Jake Bright is a Whitehead Fellow of The Foreign Policy Association and co-author of “The Next Africa: An Emerging Continent Becomes a Global Power House.” You can follow him on Twitter @jakerbright.
Aubrey Hruby is a coauthor of “The Next Africa: An Emerging Continent Becomes a Global Power House.”