The Africa e-Journal

President’s Message - March/April 2022 eJournal

As we conclude a busy March and April, our attention is focused on the need for U.S.-Africa public-private collaboration to strategically address the impact of the Ukraine war on Africa, its agricultural sector, and people. Recognizing the importance of this issue, CCA organized on April 20th an in-person event for the 2022 Africa Finance Forum on the sidelines of the World Bank spring meetings entitled “Disruptions in Global Agribusiness Supply Chains: Impact in Africa and Need for Collaborative Action.”

African countries, which continue to be impacted by the COVID pandemic, are now faced with another economic shock from the war in Ukraine. Increases in global commodity prices, and especially oil which rose above decade-long highs of more than $100 a barrel shortly after Russia invaded Ukraine on February 24, are inflicting heavy costs to many African governments, their agricultural sectors, farmers, and vulnerable food-dependent citizens. The conflict in Ukraine is severely impacting food security globally, and especially in many African countries that rely on key agricultural imports. Russia and Ukraine are among the top exporters of wheat (almost one-quarter of global wheat exports) as well as barley, sunflowers, and maize while Russia is a key producer of fertilizer. Hence, war-induced disruptions in the agricultural sector in Ukraine and heavy economic sanctions on Russia are raising the price of wheat, fertilizer, and other agricultural products.

Rising consumer prices are likely to impact the countries that are most heavily dependent on agricultural imports from Russia and Ukraine. African countries imported agricultural products worth $4 billion from Russia in 2020. Wheat accounted for nearly 90% of imports, while sunflower oil accounted for 6%. Egypt accounted for nearly half of these imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya, and South Africa. Russia is the third largest exporter of potash, a key ingredient in fertilizer, after Canada and Belarus. That’s the difficult food import picture.

When we look at this issue from the internal lens of African farm productivity, we see that Africa’s hundreds of millions of smallholder farmers, who already face challenges in accessing and using the latest and best technology to increase productivity, are now being hit by additional challenges.

Fertilizer prices across Africa are rising rapidly and out of the reach of many African farmers. For example, in Kenya fertilizer prices have doubled from about $30 a bag last year to roughly $60 a bag today. Farmers in Kenya’s agricultural zones are complaining that this dramatic increase will significantly push up their production costs. Moreover, the hike in fuel prices will also impact the ability of African farmers to use farm machinery and transport, further reducing their ability to grow sufficient crops this year. This scenario playing out all across the continent will likely lead to smaller crop yields, further impacting food prices, food security, and could potentially fuel social and political tensions.

All this is happening at a time when countries in the East Africa and Horn regions are facing food insecurity due to low rainfall. The United Nations estimates that 20 million people in Ethiopia, Kenya, Somalia, and Djibouti face hunger due to the longest drought in four years, which has killed livestock and ruined harvests. There is a strong probability that the Russia-Ukraine conflict will have negative and long-lasting multiplier effects on African economies and impede their efforts to relaunch as most governments no longer have the fiscal space to retain or even expand their safety nets.

Despite these challenges, CCA has high hopes for 2022 and beyond. While AfCFTA implementation and phase 2 negotiations proceed on the African side, we also anticipate that the Biden Administration will set a path for a stronger, reenergized U.S.-Africa relationship – advancing the Prosper Africa Build Together Campaign and Build Back Better (B3) World projects in Africa, soon announcing an Africa national security strategy, launching a Digital Africa initiative, and making plans to host the Africa Leaders Summit (last held in 2014). On March 10, CCA was delighted to host Deputy Assistant Secretary of State Akunna Cook and Prosper Africa Acting Chief Operating Officer Leslie Marbury for a webinar entitled “Prosper Africa’s View from the Ground.” The event served as an opportunity to highlight their recent trip to Nigeria, Kenya, South Africa, and Namibia as part of the first in a series of Prosper Africa Economic Diplomacy tours led by the U.S. Department of State. Prosper Africa enables the U.S. Government to speak in one voice across 17 participating departments and agencies about our shared commitment to an economic partnership with countries across the African continent. Their visit focused on increasing U.S. investment in the creative industries, ICT and digital technologies, infrastructure, and energy. The delegation engaged with entrepreneurs, business leaders, and government officials to remove barriers to U.S. trade and investment, to drive transactions forward, and to promote market opportunities.
In March and April, CCA hosted events focused on infrastructure, investment, and SMEs – highlighting their critical roles, respectively, in supporting greater U.S.-Africa trade. On March 8, CCA held “The U.S. - Kenya SME Trade Initiative Program Launch” with the Kenyan Private Sector Alliance (KEPSA). The initiative recognizes the critical role that SMEs play in U.S. and Kenyan trade, and it seeks to expand trade and investment between American and Kenyan SMEs through partnership, information sharing, training, logistics, financing, and more. The program will provide support to U.S. and Kenyan minority, women, youth, and diaspora owned businesses to access the Kenyan and U.S. markets.

On April 25, CCA hosted a discussion with the Hon. Raila Odinga, African Union High Representative for Infrastructure Development and former Prime Minister of Kenya. The program served as an opportunity to discuss Africa’s infrastructure agenda, the significant gap in financing of infrastructure projects in Africa – whether rail, road, and airports, green and renewable energy, or digitization of the African economy. Hon. Odinga also shared his views on Kenya and the significant opportunities for U.S. companies seeking to expand business in the East African regional market.

On the same day, CCA held a roundtable discussion entitled “Engaging U.S. Investors to Facilitate U.S. Investments in Africa” including speakers from the World Bank and IFC looking to leverage their investments into Africa with those of institutional and private equity investors. The discussion highlighted growing opportunities for U.S. institutional investors – including pension funds – to make profitable and relatively low risk investments – particularly for projects using “blended finance” platforms.

Another highlight in April was the signing of a Memorandum of Understanding between CCA and the Confederation of Tanzania Industries (CTI) to work together to enhance U.S.-Tanzania trade and investment and to cooperate in areas of trade promotion and private sector development. As we return to in-person events, it was a special delight to host an Iftar dinner with H.E. Samia Suluhu Hassan, the President of Tanzania celebrating distinguished women leaders in global affairs.

As we plan for the July 19-22, U.S.-Africa Business Summit, I traveled to Morocco, on March 17-25 to meet with senior government officials as well as Moroccan and U.S. private sector groups. In Rabat, I was delighted to meet with H.E. Nasser Bourita, Minister of Foreign Affairs, African Cooperation and Moroccan expatriates, H.E. Ryad Mezzour, Minister of Trade and Industry, Mr. Obaid Amrane, CEO, Ithmar Capital, as well as the intergovermental committee coordinating the organization of the U.S.-Africa Summit.
I also met with the senior leadership and a number of U.S. and Moroccan companies such as OCP, Citi, Attijariwafa, Mazars, Banque of Africa, Gilead Sciences, Banque Populaire, Maroc Telecom and trade associations, CGEM and AmCham Morocco. I was priviledge to meet with Mr. David Greene, U.S. Charge d’Affaires in Rabat and Mr. Lawrence Randolph, Consul General in Casabalanca. These meetings reinforced the choice of Morocco as the Summit host and demonstrated the full commitment of both government and private sector actors to make the U.S.-Africa Business Summit a resounding overall success.

We are excited to be partnering with the Government of Morocco on this much anticipated Summit and we look forward to seeing you there and providing CCA members and other stakeholders with the access, connections, and insights needed to take advantage of the positive developments in trade and investment in Africa.


Sincerely,

Florizelle Liser
President & CEO
Corporate Council on Africa

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