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Africa Rising and Morocco Leading the Way: Notes from Marrakech
Simon Locke, Vice President, FPA, USA
Last week’s U.S.-Africa Business Summit in Marrakech, Morocco highlighted important recent developments on the Continent and in U.S.-Africa relations.
I attended the conference, listening to and spending time with leaders, and here are five key takeaways with links to useful context:
U.S. Engagement with Africa
The U.S.’s engagement with Africa is once more on the front burner. In a video message to the conference, Vice President Kamala Harris announced that in December the White House will host the first U.S.-Africa Leader’s Summit since the Obama administration in 2014. This will build on current engagement through significant government-supported and private investment into the Continent to build both physical and technological infrastructure. (Read: Washington Post AP Story)
The U.S.’s re-engagement with Africa is clearly welcome, but there’s a lot of ground to catch up. Take Morocco for example, where France and the United Arab Emirates are the top investors, followed by the U.K. Despite Morocco’s unique relationship with the U.S. – it was the first country to recognize America’s independence – the U.S. is still far down the list of sources of foreign direct investment in the country. See FDI data.
This matters. Economic ties translate to political ties. Africa’s tepid response to Ukraine underscores this. The U.S. will need to put its money where its mouth is, and move beyond its stop-start engagement if it is to have the influence it would like. Although, there’s skepticism and a mixed bag of attitudes towards the U.S. especially in the Middle East, the Marrakech Summit underscored the receptivity to American companies and technology, and the engagement underway.
Africa: The Solution, Not the Problem
At the business summit, leaders restated again and again the huge potential of the Continent, emphasizing that it is not only rich in resources and economic opportunity, but young people in an aging world. Africa will have a quarter of the worlds’ population by 2050, be a major global market, and center of industry as it transforms from a provider of raw materials for the world to an intrinsic part of value and supply chains. Read this Guardian article on Africa’s population growth.
It was clear that African countries look at summit host Morocco as a model. Over the last 15 years, the country has built a thriving automotive industry, the largest in Africa and now the leading exporter of cars into Europe. This has been achieved through a disciplined approach to public private partnerships, the creation of, and investment in, industrial zones, and championing of free markets under King Mohammed VI. Autos have leap-frogged its world-leading fertilizer industry to become the country’s primary export.
It is important to highlight that the industry is not simply building cars from parts made elsewhere… the majority of the components in the cars it exports are made in Morocco, as part of a 250-company strong manufacturing ecosystem that has been built from the ground up.
The African Continent Free Trade Agreement – which has more than 40 signatories – promises to open up intra-continental trade and provide the opportunity to scale industries to compete worldwide. Even with the challenges of COVID as a backdrop, six of the ten fastest growing economies in the world are in Africa, underscoring confidence expressed by leaders in the Continent’s prospects.
The Abraham Accords
The Abraham Accords – with the normalization of diplomatic relations between Israel, United Arab Emirates, Bahrain, Morocco, Oman, and Sudan - are widely viewed as a positive for the political stability and economic opportunities they are seen as providing North Africa.
Although initially seen in binary terms as a win for Israel and lose for Palestinians, there is a palpable sense that the Accords are more significant, offering hope for moving beyond what have felt like intractable issues in the region. They are providing opportunities for signatories to engage with Israel in efforts to build trust and advocate for Palestinians. The most recent example being Morocco’s role in the opening of the Allenby bridge between the West Bank and Jordan.
Having made huge leaps in mobile technology which has driven innovation in financial services, healthcare and eCommerce, the Continent is focused on adding power generation capacity to drive the digital infrastructure required to build new industries and provide services for its people.
Outside the cognoscenti, perceptions around technology in Africa in the West are largely out-of-date. The Continent’s technology ecosystem is thriving. National online financial services businesses are for example consolidating into pan-African powerhouses. Healthcare providers are delivering services to more people. Agricultural businesses are leveraging technology to enhance crop yields. And, governments are building infrastructure, industries and services required to move people from the informal economy to the formal economy.
Technology is critical not just to provide jobs and increase productivity, but to the goal of delivering services for populations based on as simple a concept as unique identifiers such as a Social Security number for large populations.
There’s a major focus in Africa on governance. Despite this, the last key takeaway from my time in Marrakech is the frustration of some leaders that global investors continue to see Africa through an out-of-date lens, as a high-risk investment.
On a country-by-country level, what I heard consistently was recognition that there is work to be done, but also that progress has clearly been made in many countries. The point leaders were looking to make was that Africa is in fact a huge investment opportunity.
There’s also some acknowledgment that there is work to do to engage more effectively with the media, and provide context to understand each Country’s history, unique institutions, and culture. In conversations about Morocco, its monarchy combined with democratic institutions, was key to the country’s stability and growth – yet something few understand.
A better understanding of what is taking place in Africa is critical to understanding its place in the world.
In the coming months, at the FPA we’ll be exploring ways in which we can contribute to a better understanding of African countries, economic development, culture, technology and politics to our members and audiences. If African leaders are right that the Continent is the solution and not the problem, deeper insights into Africa and its effects on the world will be increasingly important and valuable.
We welcome feedback on topics and issues you’d like to hear more about.
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