When President Obama announced his intention to convene the first-ever U.S.-Africa Leaders Summit, policymakers, pundits, and other interested parties made numerous predictions as to how the historic event would fare, especially in comparison with the summits convened by China, the European Union, and others.  Now that the activity of what came to be known as “Africa week” has settled down, it is time to take stock of what was achieved and what comes next.

So What Was Achieved at the U.S.-Africa Leaders Summit?

One of the most significant achievements of the Summit was the clear emphasis placed on trade and investment as a top priority in the U.S.-Africa relationship.  Not only was this one of three themes on the official Summit agenda, but a full-day was devoted to a business forum co-hosted by Commerce Secretary Penny Pritzker and former New York Mayor Michael Bloomberg.  The forum, which drew nearly 300 public and private sector leaders, and in which President Obama participated, focused on deepening the U.S. business community’s engagement in Africa across a range of sectors including consumer goods, finance and capital investment, information and communications technology, infrastructure, and power and energy.

With more than $33 billion dollars in deals, commitments and investments announced during and around the Summit, it is evident that there are significant opportunities for the private sector. Several policy developments from the Summit will be of particular interest to businesses seeking to realize these opportunities and navigate the challenges of this expanding commercial engagement.

• Continuation of Investment Incentives.  Throughout the Summit, senior Administration officials committed to working with Congress to achieve a “seamless renewal” and "long-term" extension of the African Growth and Opportunity Act (AGOA).  A cornerstone of the U.S.-Africa commercial relationship, the preferential trade legislation is intended to incentivize African economies to open their markets to American investment.  Currently set to expire on September 30, 2015, AGOA is critical to commercial interests on both sides of the continent; it has generated an increase of over 221% in U.S.-Africa trade, approximately 100,000 jobs in the U.S., and over one million direct and indirect jobs in Sub-Saharan Africa.  Long-term renewal of AGOA is especially important because the size of investment needed to make a venture viable—particularly in the textile industry—requires a longer period of time to amortize. The sense of urgency conveyed about the need to renew and extend the legislation was welcomed by policymakers and investors alike.

• Increased Assistance to U.S. and African Private Sector Companies.  In connection with the Summit, the Administration announced new initiatives which will significantly expand its Doing Business in Africa (DBIA) campaign.  The initiatives related to increasing the counseling and technical assistance provided to U.S. and African private sector companies include:

  • Upgrading USAID’s three regional trade hubs into U.S.-African Trade and Investment Hubs, which will continue to support African businesses in taking advantage of AGOA as well as support American businesses in their commercial activities across the continent.  The hubs are located in Accra, Ghana; Nairobi, Kenya; and Gaborone, Botswana;

  • Doubling the physical presence of the Commerce Department in Sub-Saharan Africa, expanding its operations in Ghana, and re-establishing a Commerce position at the African Development Bank;

  • Launching “a One-Stop-Shop” website (http://www.trade.gov/DBIA) to offer American businesses and entrepreneurs “convenient instant access to critical African market information, financing tools available to them, projects to consider, key contacts, and much more”;

  • Establishing a private sector-led President’s Advisory Council on “Doing Business in Africa” to focus on the development and dissemination of U.S. private sector strategies for taking advantage of trade and investment opportunities on the continent; and

  • Committing to support at least 20 trade and reverse trade missions by 2020.

• Investment in the Energy Sector.  The White House also announced a new goal of extending reliable sources of power to 60 million households and businesses across the continent through the Power Africa initiative.  To date, the private sector has pledged to invest $26 billion into this project. These commitments are supported by the U.S. government, the Millennium Challenge Corporation, the World Bank, and the government of Sweden through advisory services, direct financing, grants, investment guarantees, loans and technical assistance. This doubling of the Initiative’s goals will create more opportunities for investors who are looking to participate in projects in Africa’s energy sector.

• Strengthening Urban Governments.  USAID and the Gates Foundation are partnering with the Development Credit Authority to issue a non-sovereign backed municipal bond in Dakar, Senegal. This model, if successful, will generate new financing for infrastructure projects and services in Africa’s cities, where much of the continent’s future growth will occur, creating increased access to African markets for investors in the coming years.

• Focus on Future Leaders. Reflecting on a clear demographic shift towards younger, urban, middle class populations in Africa, President Obama created the Young African Leaders Initiative.  More than 50,000 applied to participate in this leadership training program and 500 Mandela Washington Fellows were selected, several of whom participated in the Summit. Building on the impressive momentum gained since the Initiative’s inception, the Administration will launch Regional Leadership Centers in South Africa, Ghana, Kenya and Senegal to ensure that young leaders across the continent have the tools needed to succeed in modern economies. This investment in human capital will prove critical in many respects, including to companies entering the market in need of skilled employees.

In all, the U.S.-Africa Leaders Summit laid ambitious, but tangible goals to accelerate the region’s economic development and strengthen U.S.-African relations. Members of Covington’s Africa Group are well-positioned to help clients understand how Summit discussions and agreements may impact their businesses, create opportunities and to develop strategic plans for engagement on the continent.