Author: Marian L. Tupy
Site of publication: Cato Institute
Type of publication: Handbook for Policymakers
Date of publication: 2017
Sub‐Saharan Africa (hereafter “Africa”) consists of 46 countries and 9.4 million square miles. One billion out of 7 billion people on earth live in Africa. The continent’s share of the world’s population is bound to increase because Africa’s fertility rate remains higher than elsewhere. In 2014, for example, Africa’s fertility rate was close to five births per woman. In America, it was close to two births per woman. If current trends continue, there will be more people in Nigeria than in the United States by 2050.
Africa is the world’s poorest continent, but it is no longer a “hopeless continent,” as The Economist described it in 2000. Since the start of the new millennium, average per capita income adjusted for inflation and purchasing power parity rose by more than 50 percent. Africa’s growth rate has averaged almost 5 percent per year not only as a result of high commodity prices, but also as a result of better economic policies.
The United States can help by further opening its markets to African exports. Congress took a step in the right direction by adopting the Africa Growth and Opportunity Act (AGOA) in 2000. In 2015, AGOA was extended until 2025. Today, 39 African countries remain eligible to export to the United States under the terms of AGOA. In 2013, about 91 percent of U.S. imports from AGOA countries entered the United States duty‐free. Combined two‐way trade between the United States and AGOA countries doubled between 2001 and 2014, with a peak in 2008 of almost $100 billion. The global financial crisis and declining U.S. reliance on foreign oil have reduced the total amount of trade between the United States and AGOA countries to roughly $50 billion per year, with Africa’s trade surplus amounting to some $2 billion.
First, free trade can be a potent weapon against terror directed against the United States. Apparel trade with the United States alone has created tens of thousands of jobs in the AGOA countries. By providing opportunities, such increased economic interconnectedness between the world’s trouble spots and the United States may help dissuade potential terrorist sympathizers from harming the United States. Second, trade increases specialization, which leads to increasing productivity. Reductions in the cost of production lead to cheaper goods and services, which, in turn, increase the standard of living for Americans and Africans alike.
If Congress insists on spending resources on “African” projects, then developing human capital might deliver greater dividends than giving money to African governments
Unfortunately, Washington limits the economic benefits of AGOA in two specific ways. First, some quotas predate AGOA and were not amended by the legislation. Second, AGOA excludes some agricultural products from duty‐free access, including sugar, tobacco, dairy, beef, and processed agricultural goods such as dried garlic, canned peaches, and apricots.
In addition to making AGOA comprehensive and unconditional, the U.S. government should stop subsidizing the American agricultural sector. The 2014 farm bill is expected to cost the U.S. taxpayer $956 billion between 2014 and 2023. If history is any guide, the cost of farm subsidies will rise. The 2002 farm bill, for example, cost 30 percent more than the expected $451 billion. The 2008 farm bill cost the taxpayer 42 percent more than the projected $641 billion.
Aid and Debt
Since most African nations gained independence in the 1960s, the region has been one of the largest recipients of aid per capita. Yet the region’s growth rate averaged less than 2 percent per year during the final 15 years of the last millennium and has averaged close to 5 percent since the start of the new millennium. The difference in the growth rates then and now is not due to the increased amount of aid, but rather to high commodity prices and domestic reforms.
Considering the negative consequences of aid and the precarious state of American finances, it is surely time to stop transferring financial resources to governments abroad. The sums are not trivial. In 2001, the USAID spent $15 billion on foreign aid globally, with disbursements in Africa amounting to $1.7 billion. In 2014, USAID spent $41 billion globally, with disbursements to Africa amounting to $10 billion. Put another way, in 2001, the USAID spent every ninth dollar in Africa; in 2014, it spent every fourth dollar in Africa.
Unlike America’s other regional commands, Africom is not intended merely to manage military planning in its area of responsibility. Instead, Africom’s mission is to coordinate with other U.S. agencies, such as the USAID, to help African governments establish peace and stability and bring about economic development
If Congress insists on spending resources on “African” projects, then developing human capital might deliver greater dividends than giving money to African governments. More African judges and lawyers, for example, might benefit from observing the workings of an efficient and impartial judiciary in the West. Similarly, African businessmen and women might benefit from easier travel to and work in the United States, thereby learning best business and accounting practices. Congress could help build Africa’s human capital by relaxing visa and work requirements for Africans and could even offer scholarships and apprenticeships to qualified applicants.
Aside from bilateral aid, Washington also participates in multilateral aid schemes overseen by a variety of international institutions, including the World Bank, the African Development Bank, and the International Monetary Fund (IMF). Those multilateral institutions have often backed unsavory African regimes that have engaged in human rights abuses and gross macroeconomic mismanagement. And although the World Bank’s structural adjustment programs and IMF lending were designed to provide credit in exchange for reforms in the region, African compliance with lending conditions has been poor or nonexistent.
The U.S. Africa Command (AFRICOM) began operations on October 1, 2007. Today, AFRICOM has approximately 2,000 assigned personnel. About 1,500 people work at the command’s headquarters in Stuttgart, Germany. Others are assigned to AFRICOM units at MacDill Air Force Base, Florida, and Royal Air Force Molesworth, United Kingdom. In 2015, AFRICOM had a budget of $248 million.
Unlike America’s other regional commands, AFRICOM is not intended merely to manage military planning in its area of responsibility. Instead, AFRICOM’s mission is to coordinate with other U.S. agencies, such as the USAID, to help African governments establish peace and stability and bring about economic development. AFRICOM’s mission assumes not only that American military officers know the causes of Africa’s problems, but that they are able to help Africans to fix those problems.
In the past, the United States has often imposed some form of sanctions to punish the perpetrators of gross human rights violations. However, it is important to recognize that few international sanctions have led to policy changes in targeted countries. To the extent that they helped to end apartheid, the success of sanctions against South Africa appears to be an exception, not the rule.
There are a number of reasons for the limited effectiveness of sanctions. Global agreement on imposition of sanctions is difficult to reach and even more difficult to maintain.
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