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WebMemo #2537 on Africa and Foreign Aid and Development

July 10, 2009

The President's Ghana Trip: Obama Should Advance Freedom in Africa

By

President Barack Obama is scheduled to travel to Accra, the capital of Ghana, for a brief one-day visit on July 10. According to the White House, the President will give a "major speech in Ghana, setting the tone for his policy towards Africa over the coming years."[1] The President hinted at what that agenda might be in a July 2 interview in which he highlighted the need for "democracy and transparency and rule of law, in the protection of property rights, in anti-corruption efforts."[2] He also noted the need for Africans to take control and responsibility for their successes and failures.

These ideas are not original. Indeed, they have been a part of U.S. policy for years. It is gratifying to have President Obama echo them, however. This message is vital in a region historically lacking in development and good governance.

Africa's Growing Importance

Africa is an increasingly important region to the U.S. It is a growing source of U.S. energy imports, a rising economic and trade partner, and an influential region that can use its representation in international organizations to support or frustrate U.S. policy priorities. This increasing importance has been reflected in the attention lavished on the region by the U.S. in recent years:

  • President Bush met more African heads of state than any other U.S. President in history.
  • In 2003 the U.S. created the President's Emergency Plan for AIDS Relief (PEPFAR) as the largest commitment by any country for an international health program dedicated to a single disease. In 2005 the U.S. launched the President's Malaria Initiative, which aimed to halve the mortality rate of the disease in 15 African countries.
  • Between 2000 and 2007, the U.S. tripled its development assistance to sub-Saharan Africa in real terms to $4.6 billion.
  • The African Growth and Opportunity Act, signed into law in 2000, provides for duty-free access for most goods from eligible sub-Saharan Africa countries.
  • In recognition of the region's growing strategic importance, the U.S. established a new, unified combatant command for Africa in 2007, which had previously been divided among three commands focused primarily on other regions.

All of these initiatives have been embraced by the Obama Administration. Indeed, the continuity of policy between the Bush Administration and the Obama Administration has been remarkable insofar as sub-Saharan Africa is concerned.

Endorsing Good Governance and Trade

Not withstanding the Administration's stated objective of doubling U.S. foreign assistance,[3] President Obama was very clear in what he considers the way toward development in Africa:

I think that you've got some very strong leadership in Africa that is ready to move forward and we want to be there with them. On the economic front, that means opening up better trade opportunities. It means that we are interested not just in foreign aid, but in how we strengthen the capacity for development internally in these countries.[4]

This vision is strongly in line with past U.S. Administrations, and rightly so. The bulk of economic evidence shows that the key to development lies in the hands of the governments of developing countries.[5] African countries should first remove obstacles to development by adopting policies that bolster free markets and entrepreneurship, good governance, and the rule of law.[6]

The President also seems to grasp the need to focus on investment and combat corruption, noting that "you're not going to get investment without good governance. So that's part of the reason why we emphasize it. ... If government officials are asking for 10, 15, 25 percent off the top, businesses don't want to invest there."[7]

This is critical as private financial flows dwarf foreign assistance from governments. Specifically, private capital flows accounted for 83 percent of economic transactions from the developed countries to the developing countries and for "91 percent of America's total economic engagement with developing countries."[8]

In fact, the President's statements on governance and investment should lead him to reconsider his commitment to double foreign assistance. Africa's integration into the global economy is the key to poverty alleviation and has the power to dwarf all forms of traditional foreign assistance. To the extent that the U.S. can assist countries in making these positive policy choices, it will be aiding development. Without such policy changes, no level of assistance will be sufficient to realize long-term economic growth and development.

Standing testimony to this is the more than $3 trillion in development assistance (constant 2007 dollars) provided by donor countries since 1960 to developing countries--of which over a quarter, or $879 billion, went to sub-Saharan African countries--with scant evidence of development results unequivocally attributable to aid.[9]

Supporting Democracy in Africa

Considering his reticence on embracing democracy promotion as a U.S. policy, Obama's justification for choosing Ghana for his first visit rather than a more strategically important country like Nigeria, South Africa, or Kenya is also worth noting.

Part of the reason is because that Ghana has now undergone a couple of successful elections in which power was transferred peacefully, even a very close election. ... I think that there is a direct correlation between governance and prosperity. Countries that are governed well, that are stable, where the leadership recognizes that they are accountable to the people and that institutions are stronger than any one person have a track record of producing results for the people. ... And so, by traveling to Ghana, we hope to highlight the effective governance that they have in place.[10]

Ghana is among a very small group of African countries that have experienced a peaceful democratic transition of power through successive free and fair elections. The President is right to acknowledge Ghana's accomplishments, and his visit is a welcome reiteration of America's commitment to representative and accountable government.

Wrong Answer on Agriculture

One of the points raised by the President in his interview was the need to increase agricultural productivity in Africa:

I'm still frustrated over the fact that the green revolution that we introduced into India in the '60s, we haven't yet introduced into Africa in 2009. In some countries, you've got declining agricultural productivity. That makes absolutely no sense. And we don't need fancy computers to solve those problems; we need tried and true agricultural methods and technologies that are cheap and are efficient, but could have a huge impact in terms of people's day-to-day well-being.[11]

There is no doubt that declining agricultural production is troubling. Nearly 70 percent of Africans depend on agriculture for their livelihood and sustenance. Malnutrition and chronic food shortages plague significant numbers of people across the continent.

But agricultural methods and technologies are only a small part of the equation. Market distortions created through marketing boards, price controls, restrictions on land ownership or unclear titling, and trade barriers on fertilizer and other inputs are far more pernicious. When combined with trade barriers and subsidies in developed countries, including the U.S., there is little wonder why agricultural production is suppressed in many African countries.[12]

If the President is serious about raising agricultural productivity in Africa, he should call for the elimination of U.S. tariffs on agricultural products and subsidies for U.S. agricultural producers, endorse loosening of restrictions on buying local agricultural goods by USAID and other providers of food assistance, and urge African countries to remove their own economic barriers to agricultural production and trade.

Putting the Onus on Africa

It is hard to overstate the excitement in Africa following the election of Barack Obama, whose father was Kenyan. There is a widespread belief across the continent that the election will result in substantial financial and political benefits for Africa. In his recent interview however, President Obama seemingly sought to temper unrealistic African expectations. Specifically, he called on Africans to accept responsibility for their situation and take steps necessary to rectify it.

I think part of what's hampered advancement in Africa is that for many years we've made excuses about corruption or poor governance; that this was somehow the consequence of neo-colonialism, or the West has been oppressive, or racism. ... I'm not a believer in excuses. ... The fact is we're in 2009. The West and the United States has not been responsible for what's happened to Zimbabwe's economy over the last 15 or 20 years. It hasn't been responsible for some of the disastrous policies that we've seen elsewhere in Africa. And I think that it's very important for African leadership to take responsibility and be held accountable.

Obama should be commended for this approach. Africans have too long been encouraged to look abroad for their salvation. The key to African development lies in freeing African economies, combating corruption, unleashing the entrepreneurial talents of the people, and embracing competition in the global marketplace. Accomplishing these tasks depends on political will and action in African countries, not the United States. Although he may not be lauded for it, this is the message that Obama should communicate to African governments and citizens.

Brett D. Schaefer is Jay Kingham Fellow in International Regulatory Affairs in the Margaret Thatcher Center for Freedom at The Heritage Foundation.

Show references in this report

[1]Jesse Lee, "Previewing Ghana," The Blog, July 8, 2009, at http://www.whitehouse.gov/blog/Previewing-Ghana/ (July 10, 2009).

[2]President Barack Obama, interview by AllAfrica.com, The White House, July 7, 2009, at http://www.whitehouse.gov/the_press_office/Interview-of-the-
President-by-AllAfricacom-7-2-09/
(July 10, 2009).

[3]U.S. Department of State, "Department of State and Other Programs," February 26, 2009, at http://www.whitehouse.gov/omb/assets/fy2010_new_era
/Department _of _State_and_Other_International_Programs1.pdf
(July 10, 2009).

[4]Obama, interview by AllAfrica.com.

[5]Brett D. Schaefer, "How Economic Freedom Is Central to Development in Sub-Saharan Africa," Heritage Foundation Lecture No. 922, February 3, 2006, at http://www.heritage.org/Research/tradeandeconomicfreedom/hl922.cfm.

[6]These conclusions closely adhere to the findings of the Index of Economic Freedom, an annual study by The Heritage Foundation and The Wall Street Journal that assesses countries' economic policies to measure their level of economic freedom. Terry Miller and Kim R. Holmes, 2009 Index of Economic Freedom (Washington, D.C.: The Heritage Foundation and Dow Jones and Company, Inc., 2009), executive summary, at http://www.heritage.org/index/.

[7]Obama, interview by AllAfrica.com.

[8]Carol C. Adelman et al., Index of Global Philanthropy and Remittances 2009 (Washington, D.C.: Hudson Institute, 2009), p. 4, at https://www.hudson.org
/files/documents
/Index%20of%20Global%20Philanthropy%20and%20Remittances%202009.pdf
(July 10, 2009).

[9]Organisation for Economic Co-operation and Development, "Development Database on Aid from DAC Members: DAC Online," at http://www.oecd.org
/document/33/0,2340,en_2649_34447_36661793_1_1_1_1,00.html
(July 10, 2009).

[10]Obama, interview by AllAfrica.com.

[11] Ibid.

[12]Brett D. Schaefer, Ben Lieberman, and Brian M. Riedl, "Addressing the Global Food Crisis," Heritage Foundation Backgrounder No. 2151, June 26, 2008, at http://www.heritage.org/Research/tradeandeconomicfreedom
/bg2151.cfm
.

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