The United States is wisely pursuing trade and investment opportunities around the world and formalizing lucrative partnerships with growing economies. This is a smart strategy for domestic job creation, business expansion and economic growth, given that 95 percent of the world’s customers and 80 percent of its purchasing power lie beyond U.S. shores. Our strategy would be even smarter if Africa was a bigger part of the mix.
Africa is home to 54 countries and six of the 10-fastest growing economies on the planet. The continent’s population is projected to reach 2 billion by 2050 — more than half of which will be a thriving middle class with rising spending power. A new report issued by the U.S. Chamber of Commerce and Investec Asset Management reveals that consumer spending in Africa will climb to $1 trillion by 2020, including $200 billion in discretionary spending. Newly empowered consumers are increasingly in the market for household goods, financial services and health care. Moreover, there is a tremendous demand for U.S. goods and services in the region.
Despite the booming market and the growing demand, the United States is late to the game. Global competitors like China, India and Europe recognized the opportunity long ago, and they are aggressively investing in Africa and exporting their goods and services to the region. The bilateral trade relationship between China and Africa amounted to $210 billion in 2013. By contrast, the United States and Africa conducted just $85 billion in trade last year. That’s not nothing — but it could be a lot more!
Many American companies see potential. Major corporations like General Electric, Walmart and IBM are investing in African infrastructure or expanding their presence in key markets. But others have been deterred by perceived risks, such as security. And a great many more companies, many of them small and medium size, are simply unaware of the prospects for growth.
The U.S. Chamber’s Africa Business Initiative is working with both U.S. and African partners to make more American companies aware of the opportunities in Africa and to highlight the region’s continued strides in security, democracy, economic growth and social development. We hope that the recent U.S.-Africa Leaders Summit, which convened African heads of state in Washington, signals the beginning of a strong and growing commercial relationship between the United States and nations across Africa.
Greater U.S. engagement in African markets is a chance for us to drive stronger job creation and business and economic growth at home. But it would also enable us to be a part of one of the most exciting and important economic revitalizations happening in the world today — one that could enrich lives and expand opportunities for literally billions of people.
— Tom Donohue is president and CEO of the U.S. Chamber of Commerce. The opinions expressed are his own.