Outlook for US-Africa Business Relationship

OUTLOOK FOR US-AFRICA BUSINESS RELATIONSHIP

The US - Africa business relationship has deteriorated over the years if you compare the figures of trade between Africa and China to it. And also if you compare the volume of trade between the African Growth and Opportunity Act (AGOA) which defines US business relationship to sub-Saharan Africa, to that of similar initiative been run by the Europeans, termed “everything but arms initiative.”

However, as at 2014, trade between China and Africa has exceeded $244 million, which is three times the size of US-Africa trade. AGOA was established to boost trade relations from Africa to the US market with 6400 product lines from sub-Saharan Africa.

90% of these exports from Africa to the US are mostly crude oil products which have started mitigating over the years because of the US exploration of oil in their country.

If these exports from oil declines, the US will have to increase its stake in the manufacturing and agricultural sector of the African continent both of which take up 5.2% of total exports to the US. While it remains to be seen what US relations yield for the country, it, however, helps put the teeming African population to work to avoid a revolt against the government like what is happening in the middle-east.

AGOA is aimed at promoting democracy; it is the same reason while one of its fundamental rules for acceptance into the program is to;

  • The nation must gain ground towards a market-based economy, upgraded manage of law, disposal of exchange obstructions and frameworks to battle defilement, and the security of laborer's rights;

 

  • The nation must not take part in exercises that undermine U.S. national security;

 

  • The nation must not take part in gross infringement of human rights.

With all most 33 countries benefiting from this program to enable them self-sustain themselves and promote economic growth, the integration of the global economic market can also stimulate growth for both the US and Africa.

Africa’s teeming youthful population has always been projected as a bedding foundation for the US to tap into it, especially when this population will be seeking jobs and other infrastructure available to them. The US can cash in on this by establishing manufacturing industries in Africa that might be regionally based, take Chevrolet having a plant in Ghana that services the need of the African continent.

Another important aspect is the rural-urban migration of most African countries. It also comes with a big strain on the infrastructure of such countries, which can lead to massive chaos if not properly managed. The US can invest in most African power sector and reap massive profit, as power is more like a scourge in Africa. By bringing its technological advancement to the fore, US will only be making allies for life in Africa.

It cannot be argued the immense respect the African continent hold for the US, but most of it has been through aids and grants for different programs. It now needs to build new relations, one that promotes the US - Africa economically.

 

 

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