July 8, 2013
By Theodore R. Bromund, Ph.D.
Every presidential trip abroad is designed to produce signature moments and deliverable achievements. President Barack Obama's recent visit to Africa was no exception. His deliverables will do little to help Africa -- but they will fatten big business at home.
The president's carefully crafted African itinerary avoided most of the places where urgent U.S. interests are at stake. He shunned Nigeria, a major U.S. oil supplier threatened by Islamist radicals. He skipped the Congo, the festering center of a continental war.
He sidestepped Kenya, an American ally that is unfortunately led by a president charged with crimes against humanity. And he missed Morocco, a key U.S. trade partner.
Obama did make it to tiny Senegal, however, which by African standards is a thriving and successful democracy, and to South Africa and Tanzania. South Africa may be the home of Nelson Mandela, but its ruling African National Congress is corrupt and ineffective, and economically, South Africa is no more important to the United States than Belgium.
In Tanzania, at least, Obama hit the right notes. He joined former President George W. Bush to lay a wreath at the U.S. embassy there, the target of a 1998 al-Qaida attack. And he announced an initiative to reduce trade bottlenecks in five East African nations.
Right now, of course, this "Trade Africa" initiative is all words. But it aims in the right direction. There's no reason why it should be as hard to do business between African nations as it is. Restrictions on trade make people poorer and less free, and when there are food shortages, they can kill.
If only the United States would learn that lesson, we might do some real good for Africa -- and for ourselves. Instead, the centerpiece of Obama's trip was an object lesson in bad policy. In South Africa, the president announced his $7 billion "Power Africa" program.
His claim is that U.S. investment will bring 10,000 megawatts of electricity to sub-Saharan Africa. That sounds like a lot of power and a lot of money, but it's less significant than it seems. The Northport Power Station generates about 1,500 megawatts by itself.
And the $7 billion is a mere drop compared with the $300 billion bucket the White House says will be required to wire all of sub-Saharan Africa. More to the point, the $7 billion is not actually buying any electricity or running a power line to anyone's home.
Instead, the money is going primarily to the U.S. Export-Import Bank, which will finance African purchases from U.S. manufacturers. So the U.S. aid actually helps firms like General Electric. Not coincidentally, GE chief executive Jeffrey Immelt accompanied Obama on his trip.
The export-import bank is a classic example of corporate welfare. It's commonly known as "Boeing's Bank" because Boeing's customers have received nearly half of its loans since 2007. That's nice for Boeing. It's also how the bank helps out big, politically connected businesses.
Obama's African initiative continues that ignoble tradition by tossing money at GE: Immelt recently stepped down as the chair of the president's Council on Jobs and Effectiveness. The bank is a classic example of corporatist cronyism, exactly the kind of thing we criticize in Africa.
If we want to do some real good in Africa, we should go back to the Clinton-era African Growth and Opportunity Act, which liberalized U.S. trade with Africa. So far, that act has mostly expanded the U.S. market for African energy, textiles and transportation equipment.
The act is due to expire in 2015. Renewing it now, and expanding it to cover a wider range of African exports, would show a real commitment to African trade and growth. And unlike Obama's corporate welfare, which just benefits GE, having the freedom to buy African goods more cheaply would be good for all Americans.
-Ted R. Bromund is a senior research fellow in The Heritage Foundation's Thatcher Center for Freedom.
First appeared in Newsday
Theodore R. Bromund, Ph.D.
Senior Research Fellow in Anglo-American Relations
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