Rosa Whitaker’s Disruptive Vision
Time to change course in U.S.-Africa economic relations
By Rosalind McLymont, June 2021
Twenty-one years ago, the African Growth and Opportunity Act (AGOA) ushered in a new era in U.S.-Africa economic relations, offering duty- and quota-free trade essentially for all products from Africa. Rosa Whitaker, founder and CEO of The Whitaker Group, was one of the architects of that historic legislation. Whitaker, a 2013 Network Journal Influential Black Women in Business honoree, was the first assistant U.S. trade representative for Africa, serving in the administrations of Presidents George W. Bush and Bill Clinton. Her firm specializes in doing business in Africa.
Now, Whitaker wants to disrupt the law, she still describes as “the U.S.’ most consequential economic policy initiative toward Africa.” It’s time for change, she declares.
We have a unique opportunity to re-imagine what is possible in terms of U.S. trade and investment policy toward Africa. If I had to sum up where it is now, I’d say we are faltering and in fact we are failing,” she said during a virtual discussion hosted in May by the Association of Women in International Trade. “We must critically confront what has not worked, the mistakes we’ve made in the past, so we do not repeat them.
One major mistake is signaling to U.S. companies to stay out of Africa, she says. Instead, she explains, “what we have welcomed is the over-bloated, very expensive, costly, ineffective aid industrial complex run by the U.S. Agency for International Development as true development. We have incentivized this AID economic development model of development, which hasn’t worked, with its labyrinth of NGOs and consultants. Because we failed to incentivize the U.S. private sector, because we failed to incentivize measures that will grow businesses in Africa, we have not gotten the results that we should receive.”
Results would have been far better had AGOA’s trade incentives been paired with incentives for American companies to seriously consider Africa as a place to invest, she argues. “By our conservative estimates, this USAID funding of these NGOs the last decade is about $89 billion dollars. Nobody has really been able to say how much of this aid money — I would dare say the majority stays around Washington — actually hits the ground in Africa? How many businesses have they created? How many jobs? Where is the investment-impact ration? Where is the transformation? We don’t see it.”
The full diversification of African exports to the U.S. and the U.S. private sector investments in Africa we wanted to see have yet to be realized
AGOA, on the other hand, conservatively has generated 1.3 million new jobs in the African apparel sector alone, supported more than 100,000 jobs in the U.S., delivered nearly $75 billion, since 2001, in non-oil products into the U.S. market, duty-free. Even so, “the full diversification of African exports to the U.S. and the U.S. private sector investments in Africa we wanted to see have yet to be realized,” Whitaker notes.
Whitaker is calling for a bold new approach that builds on AGOA to expand U.S. trade with Africa on a reciprocal basis; facilitate African access to low-cost bond financing for infrastructure development; encourage U.S. investments in Africa through tax incentives; and reform and refocus USAID on humanitarian assistance and disaster relief. She wants to see commercially oriented initiatives at the center of development assistance for the continent, with the U.S. Development Finance Corporation, Millennium Challenge Corporation, and the U.S. Treasury taking the lead, not USAID.
Critically important, Whitaker contends, is that a new U.S. policy framework for Africa must support and reinforce Africa-led initiatives, such as the African Comprehensive Free Trade Agreement that took effect January 1 of this year, with its potential to increase the continent’s exports by $560 billion.
Successfully implemented, such bold new policies could help the U.S. constructively compete with China’s hegemonic ambitions in Africa and boost African support for U.S. positions on trade, climate change, and other transnational issues.
“As the world recovers from the COVID-19 pandemic, it is time for U.S. policymakers to begin treating African prosperity, stability, and partnership as a strategic priority – a ‘must-have,’ not a ‘nice-to-have’. On an ever-shrinking planet, the quality of American lives will increasingly depend on the quality of African lives,” Whitaker says.
