Quantcast

Why President Obama wants to trade with Africa

Published: Friday, July 3 2015 11:33 a.m. MDT

US President Barack Obama speaks at the University of Cape Town, South Africa, Sunday June 30, 2013. Obama's visit followed a visit to Robben Island, where ailing former South African president Mandela was jailed. Mandela is in critical condition in a Pretoria hospital just weeks before his 95th birthday. (AP Photo) (Uncredited, ASSOCIATED PRESS) US President Barack Obama speaks at the University of Cape Town, South Africa, Sunday June 30, 2013. Obama's visit followed a visit to Robben Island, where ailing former South African president Mandela was jailed. Mandela is in critical condition in a Pretoria hospital just weeks before his 95th birthday. (AP Photo) (Uncredited, ASSOCIATED PRESS)

President Barack Obama's trip to Africa focused more on trade and economic partnerships than aid. There are three very good reasons for this, according to Olga Khazan at The Atlantic.

First, the middle class in Africa is growing rapidly. A report by the African Development Bank found that Africa's middle class will triple to more than 1 billion people in the next half-century. Khazan also noted that Africa's population is young, with more than half of Africans under the age of 20. This means there will be a large number of people entering the workforce in the near future.

Second, Obama may want to increase trade with Africa because the continent is an as-yet untapped market for American-produced consumer goods. As the middle-class in Africa grows, there will likely be accompanying demand for new consumer products. According to Khazan, American companies like Walmart, Caterpillar, Nestle and Harley Davidson are all expressing interest in increasing their markets into Africa.

U.S. President Barack Obama and First Lady Michelle Obama board Air Force One at the end of the final leg of their weeklong visit to Africa, at the Julius Nyerere airport in Dar es Salaam, Tanzania Tuesday, July 2, 2013. President Barack Obama on Monday courted African business leaders and announced new trade initiatives to open up East Africa's markets to American businesses, as he sought to counter the rise of Chinese economic influence in the growing continent.  (Ben Curtis, Associated Press) U.S. President Barack Obama and First Lady Michelle Obama board Air Force One at the end of the final leg of their weeklong visit to Africa, at the Julius Nyerere airport in Dar es Salaam, Tanzania Tuesday, July 2, 2013. President Barack Obama on Monday courted African business leaders and announced new trade initiatives to open up East Africa's markets to American businesses, as he sought to counter the rise of Chinese economic influence in the growing continent. (Ben Curtis, Associated Press)

Third, Obama's interest reflects an "aid for trade" philosophy, that rather than simply making aid transfers, an investment in infrastructure will improve Africa's ability to be a global trading partner and thus reduce long-term poverty through the growth of sustainable business.

In recognizing these benefits, it appears the United States is playing a bit of catch-up with China, which invested at least $14.7 billion in Africa in 2011, according to the International Business Times. China also surpassed the United States as Africa's largest trading partner in 2009.

"What the Chinese did that no one else had done before was that they considered Africa as a market — a market for Chinese goods, institutions and services — when the rest of world viewed Africa as an economic basket case and a place for aid programs," said Richard Poplak, a Johannesburg-based Canadian writer who is working on a book about China’s growing role in Africa.

U.S. first lady Michelle Obama gestures as she speaks during African First Ladies Summit: “Investing in Women: Strengthening Africa,” hosted by the George W. Bush Institute, Tuesday, July 2, 2013, in Dar es Salaam, Tanzania.   (Carolyn Kaster, Associated Press) U.S. first lady Michelle Obama gestures as she speaks during African First Ladies Summit: “Investing in Women: Strengthening Africa,” hosted by the George W. Bush Institute, Tuesday, July 2, 2013, in Dar es Salaam, Tanzania. (Carolyn Kaster, Associated Press)

As the Deseret News previously reported, there is a lingering question of whether Africa's incredible growth can continue given its sources. The problem may be that Africa's growth is coming out of extractive industries like mining instead of manufacturing, and that such growth may be unsustainable in the long term.

Obama seized on this concern and criticized Chinese policy during his tour. "A lot of people are pleased that China is involved in Africa," he told reporters on Friday. "On the other hand, they recognize that China's primary interest is being able to obtain access for natural resources in Africa to feed the manufacturers in export-driven policies of the Chinese economy."

In contrast, in a speech the next day, he promoted the United States' interest in a long-term economic partnership. "So, our primary interest when it comes to working with Africa on energy issues has to do with how do we power Africa so that it can be an effective market creating jobs and opportunity in Africa, but then we also then have somebody to trade with and sell iPods to, and airplanes and all kinds of good stuff."

U.S. President Barack Obama kisses First Lady Michelle Obama as they prepare to board Air Force One at the end of the final leg of their weeklong visit to Africa, at the Julius Nyerere airport in Dar es Salaam, Tanzania Tuesday, July 2, 2013. President Barack Obama on Monday courted African business leaders and announced new trade initiatives to open up East Africa's markets to American businesses, as he sought to counter the rise of Chinese economic influence in the growing continent.  (Ben Curtis, Associated Press) U.S. President Barack Obama kisses First Lady Michelle Obama as they prepare to board Air Force One at the end of the final leg of their weeklong visit to Africa, at the Julius Nyerere airport in Dar es Salaam, Tanzania Tuesday, July 2, 2013. President Barack Obama on Monday courted African business leaders and announced new trade initiatives to open up East Africa's markets to American businesses, as he sought to counter the rise of Chinese economic influence in the growing continent. (Ben Curtis, Associated Press)

EMAIL: dmerling@deseretnews.com

Copyright 2015, Deseret News Publishing Company