A new African trade initiative announced by President Obama on Monday aims to boost imports to the US from the East African Community by 40 percent. Those countries – Kenya, Burundi, Tanzania, Rwanda and Uganda – will be the starting point for the initiative, which is expected to expand in the future.
In the near term, it aims to reduce transport time by 15 percent to Burundi and Rwanda, which are landlocked, and also cut the time by 30 percent that a truck spends at border crossings.
Obama said, “I see Africa as the world’s next major economic success story, and the United States wants to be a partner in that success.”
“The entire GDP of sub-Saharan Africa is still less than $2 trillion, which is about the same as Italy,” he said. “Our entire trade with Africa is about the same as our trade with Brazil or South Korea, countries with a fraction of Africa’s population. Of all our exports to the world, only about 2 percent goes to Africa.”
Under the African Growth & Opportunity Act, almost all of US trade goes to South Africa, Nigeria, and Angola. Obama aims to broaden that.
Apparel and textile imports from sub-Saharan Africa to the US amounted to about $881 million in the last year. Overall, the US imports around $50 billion from sub-Saharan Africa, most of which is oil and minerals.
The US will seek to harmonize regulatory issues among the economies, and also create a new commercial dialogue to bring private sector actors to the table with policy makers. The initiative will also aim to create US Trade and Investment centers, which can act as hubs fro information, services, and risk mitigation and financing. At the same time, the US will aim to enhance its “Doing Business in Africa” campaign, which promotes awareness of business opportunities on the contingent, organizes trade shows, and also oversees B2B matchmaking.
The ultimate goal is to double trade with East Africa by moving goods faster and streamlining investment procedures and trade.