In 2006, the Bush Administration launched the African Global Competitiveness Initiative (AGCI) to build services and promote trade between the US and Africa. With the global economic crisis and a change of administrations only months away, will the Initiative’s initiative fall prey to more pressing problems at home?By George Lauriat, AJOTUnder Presidential Initiative the five-year $200 million African Global Competitiveness Initiative (AGCI) was started in 2006, with basic goals of improving the business and regulatory climate for private sector-led trade and investment, strengthen Africa’s own private sector through knowledge based programs increase access to financial services, and facilitate investments in infrastructure.
In short the idea was to improve the prospects for companies in sub-Saharan Africa seeking to export goods to the US. Although the AGCI is a US program - an extension of the African Growth and Opportunity Act (AGOA) - the Initiative works other programs such as the World Bank’s Making Finance Work for Africa and the multilateral Infrastructure Consortium for Africa.
Although the AGCI is really fairly new, there have been some early returns on African Growth and Opportunity Act (AGOA). According to the State Department, over 98% of African exports to the US entered duty-free last year. In 2007, AGOA exports to the US totaled over $50 billion. To put this number in perspective, the increase is more than six times the level in 2001, the first full year of AGOA. During the same period, US exports to sub-Saharan Africa have doubled, totaling over $14 billion.
ROADBLOCKS TO TRADE
One of the key elements of the AGCI strategy was the establishment of “Competitive Hubs”. Under the AGCI four regional Global Competitiveness Hubs were established in Ghana and Senegal for West Africa, Botswana for Southern Africa and Kenya for East and Central Africa. These hubs are managed by the USAID Regional Missions in their respective regions. From the Competitiveness Hubs, (also called Trade Hubs), the US agencies provide information and technical assistance to African organizations and particularly to the private sector. In the “1st African Global Competitiveness Hub Meeting” held in Accra, Ghana in March, Jeff Malik of USAID outlined the general funding strategy for AGCI. In his presentation he outlined that infrastructure was the highest priority at $70.5 billion; Enterprise Development next at $51.5 million; followed by Access to Finance at $31 million; with Improved Climate accounting for $22 million.
The problem of infrastructure in Africa is a significant problem to expanding international trade. However, the problems with infrastructure go beyond simply building adequate airports, roads and port facilities. Much of the problem involves systematic corruption that literally acts as a roadblock to commerce. In the March meeting the AGCI outlined a proposed initiative that included cooperation with the Union économique et monétaire ouest-africaine (UEMOA), to record and document corruption on major transport corridors in West Africa. As a result West Africa has one of the world’s least efficient road systems. According to AGCI report, roadside corruption is rampant as police and customs frequently erect random barriers, detain truck drivers until bribes are paid, exact standardized bribes in business-like fashion. What AGCI’s West Africa Trade Hub along with ECOWAS & UEMOA is what they call “Improved road-transport governance” (IRTG), an information system that generates data on corruption:
- Provides continuing updates on bribes & delays
- Quarterly reports providing details of: which uniformed service takes most bribes; which trucking corridors cause most delays; which countries rate worst; whether bribery & corruption are getting better.
The drivers themselves would collect the IRTG data. Whether it will work will largely depend on how willing the drivers are to share the information and how bad the governments and private