This is an archived USAID document retained on this web site as a matter of public record.

Administrator J. Brian Atwood
Congressional Forum on Africa
Washington, D.C., March 11, 1998
U.S. Agency for International Development

It is a very nice to be here today, and I would like to thank Congresswoman McKinney not only for arranging this event, but for being such a consistent ally and friend to our programs in Africa. The Congresswoman's vision and energy during the last several years have been instrumental in maintaining our international leadership at a time when many in the Congress were increasingly looked inward. We all owe her a debt of thanks for her commitment and hard work toward promoting a stronger relationship between the United States and Africa.

Before I go into detail about our assistance programs to Africa, I would like to echo some of the earlier sentiments expressed by my colleagues in the Administration. We are all very excited about President Clinton's trip to Africa for a number of reasons. First, this will give millions of Americans a chance to look at an Africa that they know very little about. I think the media's focus on Africa will help Americans see the region in a new light and help convince the public that remaining engaged in Africa only makes common sense.

Second, this trip will highlight what most of us already know: We are seeing a new commitment to reform in much of sub-Saharan Africa, and this commitment is making tremendous new breakthroughs in development possible across large parts of the continent.

Yes, we do face very serious challenges in education, public health, in the environment and across a range of other issues, but never before have we been better positioned to deal with these issues. The end of the Cold War has allowed us a luxury we did not have before: We now can direct our assistance toward people and governments who are genuinely committed to reform and working as good partners.

Third, I am very pleased that the President is going to Africa because I think his trip offers testament to our Administration's continuing commitment to work with those African nations willing to embrace democracy and open markets. Both the President and the First Lady are deeply knowledgeable about both Africa and our development program, and I consider myself blessed to serve as USAID Administrator under such forward-looking leadership.

I started my foreign service career in Africa, working as a junior foreign service office in the Ivory Coast a number of years back. Having closely followed Africa for so long, I cannot help but be energized by recent developments on the continent. Africa is now undergoing major political and economic changes that -- if supported -- can project sub-Saharan countries into the global economy in a very positive way. Our assistance programs to Africa are all about supporting promising economic developments, removing constraints to growth and helping to build the fundamental human capacity -- through education, health, and other efforts -- that will drive the development process over the long term.

While it is true that the substantial majority of the world's poorest countries are clustered in Africa, we have seen some very positive economic developments of late. Economic reforms in sub-Saharan Africa are resulting in sustained economic growth through increased trade and exports and increasingly attracting foreign capital.

Economic growth in sub-Saharan Africa -- excluding the larger and slower growing economies of Nigeria and South Africa -- reached 5.7 percent in 1996, and projected growth is in the 5 percent to 6 percent range for 1997 and 1998.

The trend toward improved growth is broad -- an estimated 35 countries experienced more than 3 percent growth in 1997. This represents a remarkable turnaround from even just several years ago. In 1992 we had 17 countries on the continent experiencing negative growth rates. That number was down to only four by 1996.

These improvements have come from reforms that have unleashed the dynamism of the private sector, lowered central government deficits, and increased investments in people through education and health and the greater stability associated with democracy and the rule of law.

As a result, Africa's exports are expanding rapidly, growing by more than 5 percent in 1994, 9 percent in 1995 and 14 percent in 1996. Promoting broad-based economic growth is fundamental to the success of USAID's development strategy in Africa. For American assistance to be effective it must stimulate the economic growth necessary for individuals to move beyond dependency upon the state and for the state to eventually move beyond reliance on donors.

For this equation to work, it is critical that USAID support those sectors that offer greatest promise for the health and independence of African economies: agriculture and small enterprise.

Agriculture remains the backbone of most African economies, affecting the well-being of virtually all Africans in terms of income, food security and the national economy. Small enterprises are also vital to the health of African economies as dynamic sources of job growth and diversification of production. Accordingly, USAID supports the expansion of non-traditional exports, market liberalization and small enterprise development.

For example, our Food Security Initiative for Africa recognizes the increasing threat to food security in the region posed by trends in agricultural production and population growth, and underscores the policy, technology, and infrastructure constraints to enhancing food production and marketing. In this pilot year of a ten-year effort, USAID will highlight programs in Ethiopia, Uganda, Malawi, Mozambique and Mali to increase attention and resources on combating hunger, promoting agriculture and improving nutrition.

USAID assistance has also been crucial in helping hundreds of thousands of Africans start small businesses or "microenterprises." In Uganda, USAID microenterprise programs in agriculture that assist small farmers are expected to provide employment to about 120,000 families by 1999 -- 70 percent of these families are headed by women.

Just last week I had the pleasure of meeting the founder of the Ghana Association of Women Entrepreneurs. This group, with support from USAID, has developed a program that focuses on strengthening the capacity of small businesses owned by women to compete in international markets. The association was created in 1993 and is the brainchild of a small group of Ghanaian women who recognized the need for women entrepreneurs to become more actively involved in international markets and to advocate for more liberalized policies on trade and investment. Today, the association's 150 member companies make the presence of women entrepreneurs felt in virtually all economic sectors in Ghana.

The association's president, Mrs. Lucia Quachey, spearheaded the first Global Women's Trade Fair and Investment Forum in Africa, held in Accra in June 1996. Over 1,500 women entrepreneurs from around the world participated in the event and took advantage of the network to establish business links, encourage investment in women's businesses and learn critical skills concerning investment promotion, business development, and production and marketing. This is but one of many examples of how assistance programs are driving development from the ground up in Africa.

I know some people have been concerned that discussions about a trade and investment initiative will mean less of an emphasis on assistance programs to Africa. This is not the case. In fact, it is our assistance programs that are crucial to helping establish an environment will expanded trade can occur. Africa's reality is aid, then trade.

Over the last 30 years, we have seen numerous cases where the pursuit of free-market policies -- when combined with open and transparent governments and investment in human capital -- spurred the capital flows and investment necessary to drive lasting economic growth. In each of these cases, USAID was a catalyst moving the process forward.

That is why USAID's and other donors' role in Africa today is so important. Trade does not just happen. Free markets do not simply materialize out of whole cloth. The enabling environment must be right before private capital begins to flow. That is why USAID is helping African nations remove institutional and legal trade barriers and foster cultures receptive to foreign investment.

That is why we support programs that create broad-based economic growth and promote initiatives that increase economic productivity by investing in people through programs in education, health care, family planning and child survival.

I have found strong support from American business leaders for our assistance programs, because they know these programs can address problems -- whether it be banking laws, the spread of AIDS, or supporting educational reform -- that the private sector has little ability to change.

But foreign investors are beginning to take notice of progress in Africa. Average net private capital flows, which were negative in 1990 and negligible in 1992, now average more than 2 percent of GDP, equivalent to 10 percent of total investment in Africa.

This is important progress, but only a start. Global private investment has surpassed 340 billion dollars annually, but still only about one percent goes to Africa. Internal institutional and policy reforms are the keys to facilitating the transition to a trade and investment relationship for Africa with the world economy.

Clearly education is also a core issue at the center of Africa's development challenge. Whether it be strengthening democracies, helping countries in crisis, improving health or promoting economic growth -- none of these efforts will succeed without a strong foundation of education. As American President Thomas Jefferson said, "Nothing more than education advances the power, prosperity and happiness of a nation."

From almost every study we have seen, the role of education in advancing a country's economic and political fortunes is tremendous. The World Bank found that investments in education for girls had the single highest rate of economic and social return for any development investment.

Data shows that societies with literacy rates less than 70 percent simply do not grow and flourish. By the same token, when we look at the enormous progress that countries like South Korea made in the 1960s and 1970s, many of these advances are traced directly back to heavy investments in education and building human capacity. While sub-Saharan Africa has made great progress in education, enormous challenges remain.

    Half of Africa's primary school-age children are not in school.

    Less than half of those entering first grade will complete their primary education. Many will drop out before they acquire minimal levels of literacy and numeracy.

    Few sub-Saharan countries have higher than 60 percent school enrollment. In Ethiopia and Mali, enrollment is below 30 percent.

    In most countries, far fewer girls enroll and stay in primary school than boys.

    Adult literacy remains at about 50 percent in Africa, compared to 64 percent in Asia and 84 percent in Latin America.

While USAID supports building human capacity at many levels, the agency focuses the lion's share of its education and training resources on basic education, and particularly on primary education, where social and economic returns are the greatest, especially for girls and other disadvantaged groups.

For example, just two years after project implementation, USAID's basic education program in Uganda has tackled the underlying constraints to rebuilding that country's shattered education system. Over 2 million children and 75,000 teachers have benefited from USAID assistance. In Ghana, With USAID support, now more than 95 percent of all primary school teachers are certified to minimum standards through courses in math and English.

USAID's renewed commitment to economic growth in Africa -- the vehicle to accelerate the transition to trade and investment -- will be structured around several key principles. U.S. resources and policies will be carefully targeted to make the push for economic growth in Africa a highest priority. And we will work very hard to mobilize a concerted international effort to build broad support for this strategy.

USAID, for its part, will target its resources in greater concentration on reforms, institutions and capacities that spur economic growth. Given the scarcity of our resources, we will exercise greater selectivity in choosing development partners so we can reinforce the development efforts of African countries that are seriously committed to economic reform.

There will also be a greater linkage of USAID's economic growth assistance to our activities in the field of governance, such as the rule of law, judicial system reform, anti-corruption programs and regulatory and legal reform. Past experience has taught us that ownership of economic policy reform is greater among governments that are democratic, open and transparent.

We will also more directly link our economic growth assistance programs to our programs for health, family planning, basic education, democracy and the environment. These programs enhance an economy's enabling environment by improving human productivity, enhancing political stability and promoting the sustainable use of natural resources.

The Trade and Investment initiative also will support greater coordination within the U.S. government. The key U.S. partners will be the Departments of Commerce and Treasury, with their trade, investment and finance initiatives; the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corporation; the Trade and Development Agency and, of course, USAID with its economic growth programs. On an international level, the initiative will also facilitate greater U.S. government collaboration with other donor governments and international institutions.

Through the Trade and Investment Initiative, USAID will provide direct support through the following kinds of activities:

    In supporting African efforts to improve economic policy -- whether through technical assistance to individual countries or to regional economic integration entities such as the Southern African Development Community;

    In supporting new economic growth opportunities-- whether non-traditional exports in Uganda and Ghana, agribusiness development in Mali, new investments through the Southern African Enterprise Development Fund, or micro-enterprise development throughout much of the continent;

    In supporting telecommunications policy reform and the expansion of internet connectivity through the Leland Initiative; and,

    In supporting expanded linkages between African business associations and their counterparts in the U.S.

There are several key ongoing regional efforts that will complement the trade and investment initiative. The President's Greater Horn of Africa Initiative, for example, is focusing on preventing crises and achieving political stability and food security. The Initiative for Southern Africa, whose centerpiece is the Enterprise Development Fund, is promoting regional economic integration and investment across 11 countries. Our West African programs are promoting intra-regional trade through numerous private sector-led activities and networks.

We must be bullish on Africa, and we must be realistic. Serious challenges remain. Twenty-two of the world's 30 poorest countries are in Africa. A quarter of all African children will die before their fifth birthday from disease and malnutrition. Only half of all adults are literate, and fewer than 20 percent of young people attend high school. AIDS infection rates are the highest in the world.

Nowhere is the justification for foreign aid more compelling in terms of our national values than Africa. Nowhere are the potential returns on our long-term investments greater. Africa is important to America. Not only are 30 million Americans of African descent, but the U.S. depends on Africa for critical industrial inputs like oil and strategic metals and minerals. The U.S. imports about 15 billion dollars worth of goods from Africa per year, including over 10.7 billion dollars worth of oil.

In fact, the United States trades more with southern Africa than with all of the nations of the former Soviet Union. And, the United States trades more with South Africa than with Russia.

We have entered a new era in Africa -- and I do not recall a time when the continent has enjoyed such promising leadership and spirit since the heady early days of independence.

We share a future with Africa -- a future of ties that grow stronger, not weaker. The Clinton Administration is deeply committed to a new and concerted international effort to make economic growth work in Africa. The transition to trade and investment can, and will, be achieved on that continent. Foreign assistance is paving the way for growing trade and for a foreign policy that looks brightly to the future.

Thank you.

This is an archived USAID document retained on this web site as a matter of public record.

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