From the CIAO Atlas Map of Africa 

email icon Email this citation


The Tests of War and the Strains of Peace  

Peggy Dulany and Frank Savage, Co-chair, and
Salih Booker, Project Director

Council on Foreign Relations

Report of an Independent Task Force Sponsored by the Council on Foreign Relations

In 1997, Washington paid unprecedented attention to Africa and its continental rebirth. Both First Lady Hillary Clinton and U.S. Secretary of State Madeleine Albright toured the continent. President Clinton unveiled the "Partnership for Growth and Opportunity in Africa" to promote greater trade and investment in the region.

Yet an independent Task Force on Promoting U.S. Economic Relations with Africa, sponsored by the Council on Foreign Relations, found that recent initiatives to strengthen U.S. policy toward Africa fall short of what is required. The Task Force recommends a more comprehensive approach that integrates policy in the areas of foreign assistance, trade and investment, and debt reduction. The Task Force calls for the White House to promote economic relations more effectively, given the opportunities that Africa's renewal offers, not only to African nations and the United States, but the larger global community as well.

Specific recommendations for U.S. policy include:

The bipartisan Task Force-chaired by Frank Savage and Peggy Dulany-included experts on Africa and on development, as well as former government officials and academics. Its Statement was endorsed by several distinguished members of previous administrations, as well as other prominent American policy leaders. In addition to the Statement, this Report includes data on African debt and other relevant background materials

Preface and Acknowledgments

Rarely in the history of U.S.-Africa relations have America's economic interests in the countries of the African continent received as much high-level attention from policymakers, business people, analysts and the media as they have in 1997. The Independent Task Force on U.S. Economic Relations with Africa, sponsored by the Council on Foreign Relations, played a key role in this process of increasing interest and broadening public education on Africa's growing importance to the United States.

The Independent Task Force on U.S. Economic Relations with Africa was co-chaired by Peggy Dulany and Frank Savage. The Task Force began as a Study Group aimed at exploring the contours of current U.S. economic policy toward Africa. The Study Group was organized to have each of four sessions devoted to one of the key areas of U.S. development cooperation with African countries: economic policy reform, development assistance, trade and investment, and debt. The group was transformed into a Task Force to enable its members to adopt a consensus position and advocate in support of specific new directions for U.S. policy on most of these issues.

The Task Force met twice in New York and twice in Washington. A single meeting was also held in Atlanta with interested Council members and other citizens. In the course of its deliberations, the Task Force consulted with officials of the executive branch, members of Congress and their staff, and other knowledgeable individuals. The following Statement provides the findings and the recommendations of the Task Force. A number of other Council members were also offered the opportunity to sign the Statement.

As Project Director, I wish to thank all the participants for the time and intellectual energy they gave to this endeavor. I especially wish to thank our co-chairs for their commitment to this process and for the leadership they provided the entire group. I also want to thank those who served as speakers at our sessions, Adebayo Adedeji, Kevin Cleaver, Howard Stein, Carol Peasley, Julius Ihonvbere, Ernest Wilson III, Judith Aidoo, and Charles "Mike" Williams. Without the generous support of the Ford Foundation this project would not have been possible. The Atlanta meeting was organized by Senior Fellow Jennifer Seymour Whitaker and Colin Wheeler of the Council's National Program, and hosted at the Carter Center by Ambassador Harry Barnes. Michael Holtzman handled press relations for the Task Force from the Council's New York office. Finally, I particularly want to thank Marilyn Gayton, Research Associate for the Africa Studies Program at the Council, for facilitating all the communications involved in these proceedings and for the fine work she performed as rapporteur and editor of the Task Force Report.

I have included as Background Materials selected readings used to inform our Task Force deliberations. These texts provide helpful analyses of the key components of U.S. economic relations with Africa upon which the Task Force focused its recommendations.

Salih Booker
Project Director

Statement Of The Task Force
Introduction And Summary

Significant positive developments in Africa have recently created a sense of economic and political renewal throughout much of the continent. Over two-thirds of African countries are implementing economic policy reforms that emphasize growth, private-sector development, and greater openness to the global economy. Aggregate growth rates for these 35 African countries in 1995 and 1996 averaged 5 percent, more than twice the rates of the previous decade. A new generation of leadership in Africa is promoting a reform agenda that offers important opportunities for rapid economic growth and increasing African countries' participation in the global economy. Now that an increasing number of African countries are becoming strong candidates as potential trade and investment partners, the United States should be at the forefront of the industrialized world in pursuit of these new opportunities. Recognizing the favorable economic and political trends occurring in most African countries, the Council on Foreign Relations--while taking no position on the subject as an organization--sponsored an independent Task Force of distinguished private citizens, committed to strengthening American ties with Africa, to make recommendations on how best to advance mutual U.S. and African interests in the sphere of economic relations.

Despite the renewal in Africa and the quiet expansion of U.S. economic interests on the continent, the prevailing perceptions of Africa's potential remain overwhelmingly negative within parts of the policymaking and business communities, and among the larger American body politic. In the minds of many Americans, economic and political crises in a handful of traumatized countries have tended to obfuscate the impressive growth and political turnarounds occurring in many other African countries. Consequently, the Task Force believes that new opportunities to increase economic ties with Africa will require considerable executive branch leadership if they are to receive the attention and support they deserve.

Prior to this year, American economic interests in Africa have consistently received less attention from U.S. policymakers than those in every other world region. The late Commerce Secretary Ronald Brown's trade missions to the continent, his appointment of a minister counselor for southern Africa, and Vice President Al Gore's efforts in the U.S.- South Africa Bi-National Commission are the main innovations in U.S. economic policy toward Africa in recent years. Outside of these deeds, however, the countries of Africa have been largely excluded from the most dynamic component of the administration's foreign policy, namely, the promotion of U.S. trade and investment in an expanding and increasingly integrated global economy. This is despite the fact that the United States exports more to Africa than to all the newly independent states (NIS) of the former Soviet Union and Eastern Europe combined. In fact, U.S. exports to South Africa alone nearly equaled U.S. sales to Russia and are greater than U.S. exports to all of Eastern Europe.

In light of this history, the Task Force notes with approval the recently increased attention given to African trade and investment issues by both Congress and the administration. However, the Task Force believes that legislative and executive initiatives fall short of offering a new economic policy for Africa that is as comprehensive as is warranted. The Task Force concludes that the United States needs a new economic policy for Africa that integrates trade and investment, aid, and debt reduction in a more coherent manner aimed at expanding mutually beneficial economic ties.

A new policy must more aggressively promote trade and investment and involve all relevant government agencies, while simultaneously strengthening our development assistance programs with those African countries demonstrating the strongest commitment to economic and political liberalization and poverty reduction. It must also promote the extinction of outstanding concessional bilateral debt and a more rapid application of the new debt reduction initiative of the World Bank and the International Monetary Fund (IMF). Finally, a new policy must include the payment of outstanding U.S. commitments to those international organizations whose programs are critical to progress in Africa, as well as a willingness to work to improve the performance of those organizations.

The Task Force calls on the president and the secretaries of state, commerce, and treasury, along with the U.S. trade representative and the administrator of USAID, to focus greater attention and provide stronger collective leadership on new initiatives that transform the nature and content of U.S. economic policies toward Africa. The Task Force calls upon members of Congress to provide the administration with the resources and support it will need to begin a new era of cooperation with an increasing number of African countries.

The Task Force is convinced that a new U.S. economic policy toward the countries of Africa should have as objectives the following:

Africa Today Since the dawn of this decade, Africa has been experiencing profound social, political, and economic changes that are carrying African countries into the new millennium with greatly improved prospects for economic development and growth. This renaissance is taking place amid equally dramatic changes in the global political economy and portends important opportunities for African nations to deepen their participation in the international system in numerous, mutually beneficial ways. The positive trends--democratization, economic reform, and settlement of long-standing conflicts--characterize the present era as the most promising period since the onset of African independence 40 years ago. While the continent's continuing problems should not be understated, it is evident that we are witnessing the inception of Africa's second independence.

A failure to fully appreciate the economic aspects of this continent-wide renewal and their bearing on Africa's security and political interests will result in lost opportunities to maximize and sustain positive change in ways benefiting not only African nations, but the United States and the larger global community as well. In terms of America's national interests, it should be self-evident that as we become more dependent on the expansion of world trade for our own economic well-being, the potential for significant growth in Africa--resulting in substantial new trade and investment opportunities at high rates of return--merits aggressive U.S. economic engagement with the continent.

U.S. Economic Interests In Africa countries to support sensible macroeconom

The United States has considerable interests in Africa's economic development. In an era of increasing international economic competition and rapid globalization, the United States should not neglect a region as enormous as Africa, with over 10 percent of the world's population and a wealth of untapped natural resources. Economic development in Africa will benefit the United States by producing stronger and larger emerging markets for U.S. exports and by enabling African nations to participate more in addressing problems that transcend national and regional boundaries, such as environmental degradation, international crime and terrorism, migration, and regional security matters. Sustainable development in Africa will also dramatically reduce the need for, and costs of, humanitarian assistance and intervention that have surpassed development assistance levels for Africa in too many recent years. As Africa grows and becomes more integrated into the global economy, trade and investment will completely replace official development assistance as the fuel for further economic expansion, ending the era of aid dependency.

The importance to the U.S. economy of expanding its exports is greater than ever before, as more than a third of economic growth in the United States now results from exports. Within another three years, more than 16 million jobs will depend upon overseas sales, and many American companies are already earning more than half their revenues abroad.

U.S. trade with Africa is already considerable. For example, in 1996, U.S. trade with the 12 countries of southern Africa totaled over $9 billion, a level comparable to trade with the 15 Republics of the former Soviet Union combined. Significantly, U.S. exports to Africa have grown over 20 percent a year in recent years. In 1995, U.S. businesses increased their exports to Sub-Saharan Africa by 23 percent to a total of $5.4 billion, and in 1996 that figure rose to $6.1 billion. Nevertheless, the U.S. market share in the region--at 6.7 percent--lags behind Japan's 7.2 percent and well behind the 30 percent share enjoyed by the European Union. Moreover, with imports from the region totaling $15.2 billion, the United States still runs a significant trade deficit, while most of our European allies maintain a trade surplus with the continent.

U.S. Economic Policy Toward Africa

During the first four decades of Africa's independence from colonialism, American foreign policy toward the continent was overwhelmingly influenced by global competition between the United States and the former Soviet Union. Africa's economic development interests as well as American economic interests in Africa were largely marginalized because of the primacy of the Cold War. The end of the Cold War has led some policymakers to conclude incorrectly that there are no compelling reasons for continued U.S. economic engagement in Africa.1

Until recently, U.S. economic policy toward Africa has depended on the provision of aid as the principal instrument for advancing U.S. interests. Though subordinate to Cold War imperatives, development concerns have also been a part of the motivation for U.S. aid to Africa. Whereas in the 1960s, the focus was on "promoting growth," the 1970s witnessed a shift in emphasis to poverty reduction and meeting "basic human needs." During the 1980s, aid predominantly focused on support for "structural adjustment," or stabilization programs, and trade liberalization to encourage economic recovery and growth. In the 1990s, aid has since shifted to promote good governance and political democratization as a precondition for economic development.

More recently the Clinton administration has stated that the primary goal of U.S. economic policy toward Africa is to support sustainable development and to quicken the pace of that development, to boost U.S. trade and investment. In many ways, sustainable development embraces all the primary objectives of the preceding decades and represents a better and more integrated understanding of Africa's development challenges.

But regardless of the particular orientation of U.S. economic policy toward Africa over the years, its effectiveness has always suffered from the low priority it received within the prevailing foreign policy agenda and within the foreign policy bureaucracy.

Moreover, by limiting economic relations with Africa to those of aid-donor and aid-recipient, instead of promoting real partnerships utilizing a full range of aid, trade, investment, and debt management instruments, the United States wrongly casts Africa as a region of little economic significance or potential.

Frustrated by this legacy and cognizant of the economic dynamism now manifesting itself on the continent, legislators recently introduced proposals in Congress that encourage reorienting U.S. economic policy by promoting American private-sector involvement in Africa and increasing the role of trade and investment as vehicles for supporting African economic development.

At the same time, proposals to restructure and reduce the U.S. foreign aid program raise serious questions about the future of U.S. aid to Africa (with the exception of Egypt). While economic assistance to Africa was regularly undercut by Cold War geostrategic and political issues, thereby retarding sustainable development, the post-Cold War period has been characterized by a sudden dismissal of development assistance on the grounds that it has achieved little positive development impact. This trend discounts the fact that efforts to reform aid and focus more on strengthening Africans' capacity to find their own development solutions are still in their infancy, and that aid has only recently been freed of its Cold War constraints. It also ignores the increased opportunities for more effective use of aid in countries that are implementing serious reform programs.

Unfortunately, the convergence of these developments (declining aid levels and increased interest in trade) has led to an often simplistic "trade versus aid" debate over which is the more constructive approach for changing U.S. economic policies toward Africa. Fortunately, efforts to avoid this false dichotomy are evidenced in the revised legislation.

With the recent reintroduction of the African Growth and Opportunity Act in Congress, and the upcoming G-7 economic summit in Denver--where new economic initiatives on Africa will figure prominently on the agenda--there exists a new momentum for redefining U.S. economic policy toward the continent. The administration is working to finalize proposals for a "Partnership for Economic Growth and Opportunity in Africa" that embraces most of the items proposed in the legislation. These developments, combined with U.S. support for the World Bank/IMF debt-reduction program for Heavily Indebted Poor Countries (HIPC), offer key components for what should become a more integrated U.S. economic policy toward Africa.

Recommendations

The Task Force is convinced that a new policy promoting economic relations with Africa must be driven more effectively by the White House than in the recent past, that it must strengthen the complementarity of development assistance programs and the new trade and investment initiatives, and that it must include new human and financial resource commitments to promote greater U.S. economic engagement in Africa. In addition, a new U.S. economic policy toward Africa necessitates both greater U.S. leadership in efforts to reduce Africa's unsustainable debt burden and payment by the United States of outstanding commitments to international organizations whose programs are critical to Africa's economic development.

Furthermore, to create an expanded economic partnership with the African continent of significant mutual benefit to both Americans and Africans, the president with the cooperation of Congress must broaden the proposed "Partnership for Economic Growth and Opportunity in Africa" program to include the following elements:

Trade and Investment

The Task Force recognizes that the executive branch's draft "Partnership" program now includes most of the proposals contained in the legislation pending in the House of Representatives but believes that it is important to legislate these changes in U.S. economic policy toward Africa for several reasons. First, the legislation includes significant items absent from the administration's initiatives, specifically measures to increase African access to U.S. markets by eliminating trade barriers in the textile industry and increasing the Generalized System of Preferences (GSP) program benefits available to African exporters. Second, new statutory requirements on Africa policy are needed to change the mindset in the foreign affairs bureaucracy from donor to trade and development partner. Third, Congress similarly needs to debate this new approach in order to help enlighten members about the depth and breadth of U.S. economic interests in Africa. Finally, bipartisan support of this new U.S. economic policy toward Africa will send a positive signal to leaders in Africa and the rest of the world.

The Task Force also calls on the president to direct the agencies primarily responsible for trade and investment promotion--the Export-Import Bank, the Overseas Private Investment Corporation, and the Trade and Development Agency--along with the U.S. Agency for International Development, to coordinate efforts that facilitate the growth of the African private sector and to facilitate greater links between the American and African business communities. Similarly the Department of Commerce should commit larger numbers of Foreign Commercial Service officers to work in Africa and continue the post of minister counselor for southern Africa. The Task Force also believes that a major Department of Agriculture effort developing the agro-industry in Africa is long overdue. Similarly, the USDA should step up support for research, training, and technical assistance in Africa and promote agro-business linkages through its trade-related programs in Africa.

The Task Force also calls on the president to designate one of the directors for African affairs within the National Security Council to be responsible for dealing with aid, trade and investment, and debt reduction questions related to Africa.

Investments in Sustainable Development

The Task Force is convinced that there is a strong continuing role for bilateral development assistance to Africa and that current aid levels should be increased. Specifically, to reverse the decline in U.S. aid levels to Africa at a moment when it is more likely to be used more effectively than ever before, Congress should authorize and appropriate up to $1 billion for the Development Fund for Africa and the African Development Foundation in each of the next five years. The Task Force believes that while more emphasis is needed on promoting trade with Africa and U.S. private investment in Africa, the United States must expand its sustainable development programs to help reduce poverty, strengthen democratic governance and the rule of law, and invest in human resource development, all of which are necessary to help Africa create the economic base needed to meet global competition for export markets and investment funds, and to sustain economic growth.

The Task Force also recognizes the need for restructuring USAID to better perform in its development roles. It is worthwhile to consider a variety of alternative models such as a more decentralized and field-based institution with grant-making and auditing functions, and bilateral development finance institutions--such as the United Kingdom's Commonwealth Development Corporation. However, any such restructuring should be considered in close collaboration with Congress and should not be allowed to weaken the content nor reduce the amount of bilateral aid going to Africa at this critical juncture.

Within both its development assistance programs and its new trade and investment initiatives, the administration must act on its commitment to support regional economic cooperation and integration in Africa by using a portion of development assistance funding to support multi-country development projects and encourage greater intra-African trade, investment, and private-sector development (beyond what USAID already has been doing in southern Africa). In both of its Trade and Development Policy reports, the administration has emphasized the need for African countries to accelerate efforts at regional economic integration in order to increase their appeal to potential investors by increasing their market size. Regional economic integration is also an important part of the process by which African economies become more active in the global economy.

The United States must also pay outstanding American commitments to the International Development Association, the African Development Bank and Fund, and the United Nations in order to carry a fair share of international cooperation in support of African development and to maintain leadership in shaping the global economy. These multilateral institutions are perhaps more important to Africa than any other world region. While the United States should push for reforms that improve the effectiveness of these institutions, the ability to do so requires the payment of outstanding obligations. Moreover, the arrears endanger important development resources for Africa and jeopardize the ability of U.S. firms to compete for projects financed by these institutions in African countries.

Debt Reduction

Conclusion African renewal, as described earlier in this Statement, while largely self-generated, will nevertheless require significant international support and enhanced development cooperation if it is to be sustained. Such cooperation is equally important to the larger international community itself. The old notions of "aid donors" and "aid recipients" must give way to more relevant concepts that emphasize partnership and encompass the full range of areas of economic cooperation including trade and investment. Such international cooperation is equally necessary to address contemporary global concerns that transcend national and regional boundaries and affect the security and well-being of all nations. The quest for collective solutions to such global problems is greatly strengthened if participating nations have the economic strength and democratic forms of governance necessary to support resolutions that are sustainable.

While Africa's rebirth offers greater prospects for a new age of international cooperation with the continent, the current post-Cold War era is equally marked by the industrialized countries' turning away from much of the developing world, especially Africa.3 This obviously shortsighted trend is not only lamentable, it is dangerous. Yet, absent the emergence of committed leadership from among these same economically developed democracies, the tendency toward narrow nationalism on their part will undermine Africa's opportunities to promote peace, democracy, and economic development. The need for a strong U.S. role in forging some manner of collective leadership in encouraging renewed international engagement in Africa is inescapable. As the world's sole remaining superpower, the leading Western nation without considerable colonial "baggage" on the continent, and a country where over 10 percent of the population is of African ancestry, the United States is uniquely situated to provide the impetus and the example for greater and mutually beneficial cooperation with Africa.

In the United States, the crumbling of the old conventions that sustained foreign policy throughout much of this century, and the need to redefine the national interests that will guide it into the future, should offer Africa new opportunities for greater engagement with the United States. There now exists a convergence of interests among African peoples' broad objectives of security, democracy, and economic development and the emerging U.S. framework for foreign policy in the 21st century.

Realistically, however, this moment of opportunity could easily be lost. Indeed, the low priority that continues to be given to African affairs by Washington despite this convergence, as well as the unchanged staple of negative stereotypes of Africa that continue to predominate in American attitudes toward Africa, are discouraging. These factors underline the need for new and innovative efforts to address the prevailing misperceptions of Africa's progress and of its importance to the United States and the global political economy as a whole.

The continent-wide renaissance in its fragile infancy, the opportunities offered by a redefinition of U.S. interests abroad, and the emergence of a new generation of African leaders suggest that the three years remaining in this century represent the best opportunity ever to end Africa's historic marginalization.

Unless the president provides the leadership needed to launch a new approach for U.S. policy toward Africa, it is unlikely that the various initiatives emanating from a scattering of federal agencies and Congress will provide a coherent vision or be very innovative and well integrated into our larger foreign policy agenda. Between now and the Denver Economic Summit, the president must decide that the African continent, with its 53 nations, nearly 800 million people, and enormous natural resources, is far too important to remain marginalized on the eve of a new century in which America will need a far more productive relationship with the continent than ever before. Such a relationship awaits Washington's new policy.

The statement of the Task Force reflects the general policy thrust and judgements reached by the group, although not all members necessarily subscribe fully to every finding and recommendation.

  1. Herman Cohen argues that while the Cold War certainly contributed to Africa's economic marginalization between 1975 and 1990, the main reason was failed African economic policies, which discouraged investments and production of wealth.
  2. Because much of the data necessary to calculate estimates for debt reduction plans is held confidential by the World Bank and the IMF, no official figures for the cost of the HIPC proposals have been offered. However, a discussion of the complexities of estimating the costs of debt reduction proposals appears in the article by Jonathan E. Sanford in the Background Materials section of the printed report. As Sanford notes, U.S. Secretary of Treasury Robert Rubin said in April 1996 that meeting the cost of reducing multilateral debt, "should be done with the resources, of the IMF and the World Bank. We do not think [it] should require contributions from the donor nations."
  3. Michael Smauels argues that this statement is inaccurate and misleading. In his view, there have been many efforts by industrialized countries to expand economic activities with the developing world, such as the Asia Pacific Economic Cooperation (APEC) forum, suggestions for a Free Trade Area for the Americas (FTAA), as well as a number of new initiatives by the European Union and Japan and through the International Financial Institutions.
Endorsers of the Statement

Rapporteur

Marilyn R. Gayton is Research Associate for the Africa Studies Program at the Council on Foreign Relations.

Note: Institutional affiliations are for identification purposes only.

*      Individual is a member of the Independent Task Force on Promoting U.S. Economic Relations with Africa.

**    Individual largely concurs with the Statement but submitted an additional view.

*** Individual participated in the Task Force discussions but chose to be an observer or was not asked to endorse the Statement because of his or her official capacity.