The Brown Capital Management Africa Forum

Paper No. 10 State Department/Freddie Everett/Flickr

Africa’s Century and the United States:

Policy Options for Transforming U.S.-Africa Economic
Engagement into a 21st Century Partnership
March 2023

Introduction

In President Biden’s February 2021 address1 to the African Union Summit, he signaled his intent to
reframe the United States’ relationship with Africa, stating, “…the United States stands ready to be
your partner, in solidarity, support, and mutual respect. We believe in the nations of Africa.” The following
July, he announced2 the White House would host African leaders in Washington, D.C. for the U.S.-Africa
Leaders Summit.

In the eight years since the first U.S.-Africa Leaders Summit in 2014, the continent has transformed
significantly. The decade since the United States turned toward enhanced economic engagement has
yielded deeper U.S.-Africa commercial ties. The second Summit, hosted in December 2022, sought
to build on this trajectory and demonstrate visibly the administration’s commitment to building a “21st
century partnership” with Africa.

The Brown Capital Management Africa Forum is a premier platform for substantive and solutions-oriented dialogue on
key trade, investment, and sustainable development issues in Africa, and in U.S.-Africa relations. Launched in 2015, the
Africa Forum conducts research on key development issues and provides a high-level platform for convening African, U.S.,
and international business leaders, policymakers, and subject matter experts in forward-leaning, policy-oriented dialogue
aimed at advancing sustainable development in Africa and fostering mutually beneficial economic relations between
Africa and the United States. The Brown Capital Management Africa Forum is made possible by the
generous financial support of Brown Capital Management (BCM), LLC (Baltimore, Maryland).

This publication was made possible by a grant from Brown Capital Management. The statements made and views
expressed in this paper are solely the responsibility of the author and do not represent the views of the Wilson Center
or Brown Capital Management.

For more information please visit: https://www.wilsoncenter.org/Brown-Capital-Management-Africa-Forum

Progress Made and Challenges Faced
Twenty years of sustained economic growth from 2000 to 2019 averaged 5% GDP growth3 annually in
Sub-Saharan Africa. By 2020, thirty-nine African countries reached upper-middle or high-income status.
Foreign direct investment flows hit a record $83 billion4 in 2020. Africa’s growing middle class, increasing
digital access, improvements in the business climate, deepening global economic ties, and increased
trade and investment have increased African markets’ competitiveness. The United States’ flagship trade
program, the African Growth and Opportunity Act (AGOA) facilitated a 25% growth5 of U.S. trade volume
with Sub-Saharan Africa between 2000-2019. A number of initiatives—such as Prosper Africa, Power
Africa, the Millennium Challenge Corporation, the President’s Advisory Council on Doing Business in
Africa (PAC-DBIA), USAID trade hubs, and the U.S. International Development Finance Corporation—have
all worked to advance the economic relationship and policies.

Nevertheless, the economic impacts of COVID-19 did not spare African economies, with some countries
seeing a reversal of a decade of economic growth and setting millions back into poverty. Trade with the
United States declined, with AGOA’s impact smaller than hoped. Climate change and shocks to Africa’s
food systems have created food crises in some parts of the continent with many facing hunger. While
digital access continues to increase, global challenges to democratic governance have affected African
countries with citizens facing threats to their freedoms—both in the digital realm and on the streets.

Defining Issues for Africa’s Century
With a view toward the future, the United States recognizes the importance of the continent and is
seeking to embrace, using South Africa’s President Ramaphosa’s phrase, “Africa’s century.”6 Several
factors will distinguish this future, including:

• Demographic Change: In the last two decades, Africa’s population has grown, averaging over 2%
annually, with a current median age of 19.7 By 2050, the population is estimated to grow to 2.5 billion
and one in four people on the planet will be African. The region and its workforce will be the world’s
youngest.
• Economic Integration: The African Continental Free Trade Area (AfCFTA) will be the world’s largest
free trade area, with a combined GDP of $3.4 trillion and the potential to remake African trade and
commercial relations.
• Economic Recovery: As African economies seek to rebuild economic gains rolled back by the
COVID-19 pandemic (estimated at $154 billion in recovery costs8), they will need increasing
investments and innovative approaches to development financing to fill the additional $200 billion
financing gap9 needed to meet the Sustainable Development Goals by 2030.
• Climate Change and Food Security: Climate change, global responses, and “loss and damage”10
actions will have a significant impact on the continent, especially food insecurity, which has risen
sharply in recent years.
• Digital Transformation: Africa’s growing digital ecosystem and the inflows of technology sector
financing signify its importance in growing economies and creating commercial opportunities. Africa’s
digital economy is projected11 to grow from contributing $180 billion in 2025 to up to $712 billion by
2050.
• Democracy and Governance: Global headwinds against democracy are likely to continue, with only
eight countries in Sub-Saharan Africa12 as free in 2022—the smallest number since 1991. Yet, the
2020 Ibrahim Index of African Governance13 report revealed over 60 percent of Africa’s population
lives in a country where overall governance has improved over the last decade and Afrobarometer14
indicates widespread support (69%) for democracy. From Nigeria to the Democratic Republic of
Congo, the continent will see 17 state or parliamentary elections in 2023.15-16

The Wilson Center’s Brown Capital Management Africa Forum event, Transforming U.S.-Africa Economic
Engagement into a 21st Century Partnership,17 discussed important issues shaping the U.S.-Africa
economic relationship and presented policy options and recommendations for the United States to
tackle the defining issues and make the most of opportunities to build mutually beneficial U.S.-Africa
partnerships that move beyond rhetoric to action and truly embrace Africa’s Century.

Wilson Center - Africa Program | 2

The Future of AGOA and U.S.-Africa Trade
AGOA is set to expire in 2025 and the time is now to evaluate adjustments needed to enhance its
effectiveness and benefits. Co-creation by U.S. and African stakeholders of a new AGOA dispensation is
critical to its success; mutual respect and listening should inform that process. Agenda 2063,18 adopted in
2015, shapes the aspirations and strategies of the African Union (AU) and its Member States. In this, the
AU prioritized regional economic integration and the implementation of the African Continental Free Trade
Area (AfCFTA). The AfCFTA aims to dismantle trade barriers and create a “made in Africa” revolution. The
U.S.-Africa economic partnership should build on this vision.

Lessons for the United States from the last two decades reflect that AGOA was impactful in some
countries and sectors but did not realize widespread impact. Value-addition of African products was
limited, with commodities and raw materials prioritized—maintaining African markets at the bottom of
global value chains. Furthermore, the growth and sheer volume of Chinese investments in infrastructure
now serve as a context for African countries as they evaluate their relationships with the United
States—a point the United States should remember in its negotiations.

Moving forward, the United States should consider renewing AGOA on its non-preferential terms, thus
allowing the AfCFTA time and space to operationalize and advance production, value-addition, and
incorporation into the global trading system. Furthermore, an AGOA plus model that considers additional,
complementary measures not previously included, such as targeting the infrastructure, technology, and
finance sectors, would benefit the trade relationship. Tapping into the African diaspora to would also
strengthen U.S.-Africa ties and attract investment. Specific value chains19 identified by the United Nations
Development Programme (UNDP)20 as market opportunities that bolster a “made in Africa” revolution
also present an accessible entry point for U.S. businesses. The United States should seek to encourage
U.S. businesses—through tax incentives, for example—to work with local African companies and invest
in these value chains in countries that have ratified the AfCFTA.

A recalibrated U.S. trade relationship, that takes into account the lessons of two decades of AGOA and
the future of the continent, would bolster the commercial ties and advance mutual economic benefits.

Rethinking Development Finance

Thirty years of receiving official development assistance, at a price tag of $1.2 trillion, has failed to
effect economic transformation in most African countries. During this time, loans and remittances have
replaced aid as the largest source of capital inflows. Foreign direct investment (FDI), though not spread
at all evenly throughout the continent, has increased. While impressive economic growth has seen an
increase in the number of middle-income countries and higher GDPs, the continent still faces structural
impediments and remains at the bottom of global value chains. Countries have limited market access,
making them non-competitive. Fragile institutions and poor accountability, complicated at times by
political uncertainty and conflict, hold them back, as does the need for more capital, infrastructure, and
technology to eliminate poverty. As the COVID-19 economic reversals demonstrated, more needs to be
done to build the institutional resilience and macroeconomic stability necessary to withstand economic
shocks.

Rethinking development financing, including U.S. approaches to development, are necessary to move
the needle in building resilient, stable economies. Reframing development financing as necessarily
temporary and aimed at equity, sustainability, and poverty reduction is a critical step. Underpinning
this approach should be financing structural reform, versus project-based funding, and targeting efforts
toward expressed African needs and priorities, such as critical infrastructure, that mobilize African
resources.

Elevating the U.S. Agency for International Development (USAID) to play a coordinating role across U.S.
development assistant efforts could also invigorate assistance efforts and contribute toward reducing aid
and accomplishing a long-term exit. Empowering African initiatives means looking at African resources
and supporting instruments of development finances suited to future needs, such as carbon trading

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or diaspora bonds. Leveraging resources held by Africa’s pension and sovereign wealth funds and
building strategic partnerships with private finance and technology firms can both catalyze and de-risk
investments. Plugging gaps, through support for technology and skills to address illicit financial flows
and create stronger taxation, oversight, and financing agreements would support efforts to mobilize and
leverage African resources.

Development assistance can be made more effective through supporting African initiatives that tap into
using Africa’s existing natural and financial resources and building strategic partnerships with private
finance and technology firms to home in on growth sectors.

Food Security and Opportunities in the African Food Market

Africa’s food market offers vast economic and commercial opportunities. The continent’s population
growth presents a market of 1.3 billion people, and rising incomes of the growing middle class
have created a demand for high-value commodities, including in the food market. African countries
have pursued consistent but adaptable policies in the food sector, underpinned by Agenda 2063’s
Comprehensive Africa Agriculture Development Programme (CAADP).21 Nevertheless, Africa faces food
security challenges. In 2021, 20% of Africans—nearly 300 million people—were hungry.22

Economic and private sector enterprises can meet some of these challenges and take advantage of
the growing market. In particular, opportunities exist in supporting trade and infrastructure, amplifying
productivity, providing needed technologies, and improving data in the food sector. The AfCFTA is an
important lever to increase trade in agricultural commodities from food surplus to food deficit countries
to boost food production. The public and private sectors can work together in linking their experiences
supporting farmers and providing needed technologies. Bolstering farmers’ access to high-quality seeds,
resilient breeds, and fertilizers is key to increasing food production and productivity on African farms.
Opportunities also exist to connect African food markets through improved infrastructure that will reduce
transaction costs and deliver more food quickly, safely, and more cheaply.

U.S. businesses could seek and be supported in public-private partnerships (PPPs) that leverage
infrastructure investments to connect markets. U.S. efforts through the United States Department of
Agriculture (USDA) to improve food safety are a good example of policies that also support food trade
and prevent trade barriers due to food safety concerns. Research in biotechnology and its applications to
agricultural productivity—particularly in creating technologies that are adaptable to climate change and
reflect African realities should be supported. Furthermore, more, and better-quality data supported by
stronger data services in the agricultural sector are needed. As regular CAADP reviews show, quality data
collection, archiving, and retrieval are important for planning, strategy, and policy formulation. Investment
in this area would also bolster mutual accountability and strengthen dialogue and partnerships between
countries, policymakers, and practitioners or the private sector.

Focusing long-term policies and investments to garner more interest from the private sector and leverage
private capital to African markets that raises productivity and trade is key to enhancing food security and
creating economic opportunities.

Africa as Driven by Digital Transformation

The story of Africa’s Digital Transformation is a story of entrepreneurship and innovation spurred by a
mobile phone revolution. The growth of internet penetration and connectivity has brought 600 million
Africans online (primarily through mobile phones) with another 300 million to come online in the coming
years.23 Africans are early pioneers of mobile money and cashless systems, and Africa’s internet
economy will have a market size of $180 billion estimated to grow to $712 billion by 2050. The AU is
working hard to promote universal digital access and market opportunities are vast.

Investment partnerships are a critical entry point to realize success and anchor a trade and investment
relationship in the digital sector. PPPs in the technology sector could also enhance the United States’

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competitiveness among other international players (e.g., Russia, China, the Gulf States). The United
States can target partnerships and engagement with U.S. companies and the African market in several
areas: talent and workforce development, infrastructure, innovation, and regulation.

The United States can advance a growth agenda centered on African talent by investing in talent and
up-skilling workers. Furthermore, investment support for Africa’s tech ecosystem will spur growth and
support future ventures. In 2021, African technology companies raised $5.2 billion24 in venture capital, an
increase of 150% over 2019. There are over 700,000 software developers in Africa, largely concentrated
in a few powerhouse tech economies. These countries can offer examples of effective ways to nurture
these ecosystems by building training into education systems or pursuing partnerships with the private
sector. Furthermore, many young professionals are self-taught, which also opens opportunities for
educational exchanges or tech-focused fellowships using existing U.S. programs, such as the Young
African Leaders Initiative (YALI).

Infrastructure aimed at making connectivity equitable and accessible is another target area, as are the
regulatory and legal frameworks that allow the tech sector to thrive while protecting consumers.

Involving the private sector in regulatory and legal discussions can allow for responsible innovation that
creates pathways for commercial opportunities and economic growth. Nigeria’s 2022 Startup Bill offers an
example of legislation created in consultation with the sector. The African e-commerce market is largely
untapped and an area where commercial diplomacy from the United States could facilitate e-commerce
that advances U.S. competitiveness and bolsters African markets.

The recently announced U.S. Digital Africa Strategy is an important signifier of the strengthening
U.S. economic engagement in Africa’s digital evolution. Increasing private sector collaboration with
policymakers and the market, in contexts that support innovation and fair competition, will advance U.S.
competitiveness in this sector and its part in the story of Africa’s digital transformation.

Conclusion
The U.S.-Africa Leaders Summit should be commended for its progress toward recognizing the
transformations in Africa and the need to reframe U.S.-Africa engagement more equitably while
seeking to embrace the Africa of the future with the United States as a ready partner. The financial and
programmatic announcements that emerged from the Summit provide a partial roadmap and areas
to track progress. The appointment of the Special Presidential Representative for U.S.-Africa Leaders
Summit Implementation bodes well for U.S. commitment. Accountability is crucial for taking the rhetoric
of the Summit out of Washington and realizing these commitments and potential benefits to the lives of
African citizens.

For more discussion and policy recommendations on the topics discussed, see the Brown Capital
Management Africa Forum paper series on the U.S.-Africa Leaders Summit:

• Recalibrating U.S. Economic Engagement with Africa in Light of the Implementation

of the AfCFTA and the Final Days of the Current AGOA Authorization
by Dr. Joy Kategekwa

• Reimagining Development Finance for a 21st Century Africa

by Dr. Raymond Gilpin

• U.S. Africa Engagement to Strengthen Food Security: An African (Union) Perspective

by Dr. Godfrey Bahiigwa

• Accelerating Africa’s Digital Transformation for Mutual African and U.S. Economic Prosperity
by Mrs. Pren-Tsilya Boa-Guehe

Wilson Center - Africa Program | 5

1. U.S. Embassy in Rwanda, “President Biden’s Message to the African Union Summit,” U.S. Embassy in Rwanda, February 5,
2021, https://rw.usembassy.gov/president-bidens-message-to-the-african-union-summit

2. The White House, “Statement by President Biden on the U.S.-Africa Leaders Summit,” The White House, July 20, 2022, https://
www.whitehouse.gov/briefing-room/speeches-remarks/2022/07/20/statement-by-president-biden-on-the-u-s-africa-leaders-
summit

3. Colin Coleman, “This region will be worth $5.6 trillion within 5 years - but only if it accelerates its policy reforms,” World
Economic Forum, February 11, 2020, https://www.weforum.org/agenda/2020/02/africa-global-growth-economics-worldwide-
gdp

4. United Nations Conference on Trade and Development, “Investment flows to Africa reached a record $83 billion in 2021,”
UNCTAD, June 9, 2022, https://unctad.org/news/investment-flows-africa-reached-record-83-billion-2021

5. Daniel F. Runde and Sundar R. Ramanujam, “Beyond 2025: The Future of the African Growth and Opportunity Act,” Center
for Strategic and International Studies, March 4, 2022, https://www.csis.org/analysis/beyond-2025-future-african-growth-and-
opportunity-act

6. Robin Pomeroy and Anna Bruce-Lockhart, “‘This is Africa’s century’ - what we learned at the World Economic Forum in Cape
Town 2019,” World Economic Forum, September 6, 2019, https://www.weforum.org/agenda/2019/09/world-economic-forum-
africa-2019-ramaphosa-gender-violence-youth

7. United Nations Department of Economic and Social Affairs, Population Division, “World Population Prospects 2022,” UN, 2022,
https://population.un.org/wpp/Download/Standard/MostUsed

8. UNCTAD, “Economic Development in Africa Report 2020: Press Conference,” UNCTAD, September 28, 2020, https://unctad.
org/osgstatement/economic-development-africa-report-2020-press-conference

9. “Economic Development in Africa Report.”

10. United Nations Climate Change, “COP27 Reaches breakthrough Agreement on new ‘Loss and Damage’ Fund for Vulnerable
Countries,” UNCC, November 20, 2022, https://unfccc.int/news/cop27-reaches-breakthrough-agreement-on-new-loss-and-
damage-fund-for-vulnerable-countries

11. Accenture, “Tuning into Africa’s digital transformation,” Accenture, February 26, 2022, https://www.accenture.com/us-en/
insights/software-platforms/africa-digital-transformation

12. Sarah Repucci and Amy Slipowitz, “The Global Expansion of Authoritarian Rule,” Freedom House, February 2022, https://
freedomhouse.org/report/freedom-world/2022/global-expansion-authoritarian-rule

13. Mo Ibrahim Foundation, “2020 Ibrahim Index of African Governance: Key Findings,” Mo Ibriham Foundation, November 25,
2020, https://mo.ibrahim.foundation/news/2020/2020-ibrahim-index-african-governance-key-findings

14. E. Gyimah-Boadi and Joseph Asunka, “Do Africans want democracy—and do they think they’re getting it?” Afrobarometer,
November 2, 2021, https://www.afrobarometer.org/articles/do-africans-want-democracy-and-do-they-think-theyre-getting-it

15. Martina Schwikowski, “Will Africa’s 2023 elections strengthen democracy?” DW, December 26, 2022, https://www.dw.com/
en/will-africas-2023-elections-strengthen-democracy/a-63987574

16. Joseph Siegle and Candace Cook, “Africa’s 2023 Elections: Democratic Resiliency in the Face of Trials,” Africa Center for
Strategic Studies, January 31, 2023, https://africacenter.org/spotlight/elections-2023-nigeria-sierra-leone-zimbabwe-gabon-
liberia-madagascar-drc

17. Wilson Center Africa Program, “Transforming U.S.-Africa Economic Engagement into a 21st Century Partnership, Wilson
Center, https://www.wilsoncenter.org/event/transforming-us-africa-economic-engagement-21st-century-partnership

18. African Union, “Agenda 2063,” AU, https://au.int/en/agenda2063

19. AfCFTA Secretariat, “The Futures Report,” UNDP, November 20, 2021, https://www.undp.org/africa/publications/futures-
report-2021

20. Identified as automobiles, lithium ion batteries, leather and leather products, clothing, soya, cocoa, pharmaceutical, vaccines,
mobile financial services, and cultural/entertainment services.

21. African Union, “The Comprehensive African Agricultural Development Programme,” AU, February 22, 2021, https://au.int/en/
articles/comprehensive-african-agricultural-development-programme

22. FAO, IFAD, UNICEF, WFP and WHO, “The State of Food Security and Nutrition in the World 2022. Repurposing food and
agricultural policies to make healthy diets more affordable,” Rome, FAO, 2022, https://doi.org/10.4060/cc0639en

Wilson Center - Africa Program | 6

23. Emmanuel Paul, “Google is building the infrastructure for Africa’s 300 million future Internet users,” TechPoint, October 6,
2021, https://techpoint.africa/2021/10/06/subsea-internet-cable-google-africa

24. Risana Zitha, “A booming tech sector can unleash pan-African trade,” Chatman House, August 3, 2022, https://www.
chathamhouse.org/publications/the-world-today/2022-08/booming-tech-sector-can-unleash-pan-african-trade

The Wilson Center Africa Program works to address the most critical issues facing Africa and
U.S.-Africa relations, build mutually beneficial U.S.-Africa relations, and enhance knowledge and
understanding about Africa in the United States.

Brown Capital Management Africa Forum

For the full series of Brown Capital Management Africa Forum publications, please see our website at:
https://www.wilsoncenter.org/Brown-Capital-Management-Africa-Forum

Wilson Center - Africa Program | 7

The Africa Program
The Africa Program works to address the most critical issues facing Africa and US-Africa relations, build
mutually beneficial US-Africa relations, and enhance knowledge and understanding about Africa in the
United States.

The Program achieves its mission through in-depth research and analyses, including our blog Africa Up
Close, public discussion, working groups, and briefings that bring together policymakers, practitioners,
and subject matter experts to analyze and offer practical options for tackling key challenges in Africa and
in US-Africa relations.

The Africa Program focuses on four core issues:

i. Good governance and leadership

ii. Conflict prevention, peacebuilding, and security
iii. Trade, investment, and sustainable development
iv. Africa’s evolving role in the global arena

The Program maintains a cross-cutting focus on the roles of women, youth, and technology, which are
critical to Africa’s future: to supporting good governance, to securing peace, to mitigating poverty, and to
assuring sustainable development.

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