STATE DEPARTMENT OFFICIAL ON TRADE AND INVESTMENT IN AFRICA
(America's commercial interests with Africa will deepen, says Rice)

New Orleans -- Susan Rice, U.S. assistant secretary of state for African affairs, says that economic reforms being undertaken by many African countries will open the way for increasing investment in the continent.

"Now is the time to explore innovative marketing strategies targeted toward African consumers," Rice said in April 16 remarks in New Orleans before a conference on trade and investment. "Now is the time to review African stock portfolios. Now is the time to find new African destinations for your products and to work with us to make the African Growth and Opportunity Act, and our partnership for the 21st century, a reality."

Following is the text of Rice's remarks as prepared for delivery:

(begin text)

Susan E. Rice
Assistant Secretary for African Affairs
Address to the U.S. Trade and Investment Conference
New Orleans, Louisiana, April 16, 1998

U.S. Trade and Investment in Africa

Thank you Mayor Morial for that warm introduction. It is, indeed, a pleasure to be with you today. I thank the Corporate Council on Africa for once again helping us with the U.S. Trade and Investment Conference, as well as my colleagues at the Department of Commerce. Thank you also to the City of New Orleans, the World Trade Center, and Congressman Jefferson. Members of the city government, Corporate Council, and local business community members, United States ambassadors and U.S. commercial officers--welcome. I see Nancy Powell, U.S. Ambassador to Uganda, and Millard Arnold, the Commerce Department's Minister Counselor for Commercial Affairs in South Africa. They both did a great job with the President's visit to their key countries 2 weeks ago. Thank you.

When I began my tenure as Assistant Secretary for African Affairs now almost 6 months ago, U.S.-Africa economic policy was beginning to garner sustained interest from both ends of Pennsylvania Avenue. First, we in the Administration were working with Congress and many in this room to achieve House passage of the African Growth and Opportunity Act, a key to transforming the way we do business with our African partners. We look forward to working with all of you to ensure passage of this important legislation in the Senate.

With President Clinton's return from a successful trip to the continent, we now have before us a rare moment in history. It is time we stop peering skeptically at Africa through a tiny keyhole and open the door to the continent's full potential. President Clinton was the first sitting U.S. President ever to undertake an extensive mission to Africa and was the first to visit the six countries of Ghana, Uganda, Rwanda, South Africa, Botswana, and Senegal. There, he met some of the largest crowds ever to greet an American President, cochaired an unprecedented summit of six other heads of state, and discussed Africa's future with one of the great heroes of our time, Nelson Mandela.

Equally important, the President helped refocus the lens through which Americans view Africa to see beyond the distorted images of war, famine, and disease. For the first time, Americans began to see Africa from a panoramic, broad view--vast and diverse societies, modern cities with impressive skylines, small villages, quality universities, modern factories, microenterprises, and regular hard-working people with aspirations very similar to our own.

The President's visit also reflected how far both our societies have come in just a short decade. Ten years ago, economic growth was measured in negative figures in many African countries, and the number of working democracies could be counted on the fingers of one hand. Now, the U.S. has jettisoned its Cold War calculus in Africa, and the days of colonialism, apartheid, and protracted war are over. Over half of the 48 countries of Sub-Saharan Africa enjoy a democratic form of government. There is hope for lasting peace in the Horn of Africa, Mozambique, Liberia, and Angola. And from Cape Town to Kampala, from Dar es Salaam to Dakar, growing economies are fueling a real transformation.

In a spirit befitting the dramatic political and economic reforms underway in many African countries, the President and his African counterparts committed to a new partnership for the 21st century--a partnership based on mutual interest, mutual respect and mutual benefit. In that same spirit of partnership, the President stressed our unwavering determination to work with Africa to achieve its integration into the global economy and to promote democracy, respect for human rights, peace, and long-term stability.

Today, I'd like to focus on the United States' economic policy toward Africa--a policy that aims to bring Africa fully and finally into the global economic fold, promote lasting African growth and development, and create new jobs on both sides of the Atlantic. It is a policy predicated on increased U.S.-Africa trade, greater U.S. private sector direct investment, continued development assistance and debt relief, and high-level forums for ongoing dialogue. Ultimately, it is a policy intended to maximize our efforts to assist Africans achieve their full potential in the interest of our mutual prosperity in the 21st century.

A number of African countries are experiencing what South African Deputy President Thabo Mbeki refers to as a "renaissance." Two-thirds of African nations are implementing reforms to open their markets, privatize industry, stabilize currencies, and reduce inflation. As a result, economic growth on the continent has averaged almost 5%, with some countries as high as 10%. Governments no longer completely control the region's private sector. African nations have privatized over 2,000 state enterprises in the last several years, raising over $2.3 billion in government revenue to invest in building infrastructure, lowering infant mortality rates, and boosting literacy. Africa now has 15 stock markets, with five more in the works, and over 1,000 companies listed. The average return on book value of U.S. direct investment is nearly three times as high as the global average. Numerous Africa-related funds have sprung up in some of the world's biggest investment houses, including Morgan Stanley, Baring Brothers, and Alliance Capital. The message is clear: Investment capital, both direct and portfolio, is starting to flow to Africa.

Five of the six countries the President visited are implementing diversified economic programs aimed at attracting this investment. Senegal began with a 50% devaluation of the regional currency--the CFA franc--in 1994 and moved on to privatize state-owned enterprises. Growth rebounded--from 2.1% in 1993 to 5.6% in 1996. In Uganda, the government has implemented far-reaching macroeconomic reforms, including government downsizing and trade liberalization. Now, nontraditional exports are increasing at a rate of 25% a year. Botswana, an enduring, but often overlooked democracy, tops every chart for economic stability in Africa, achieving its 15th consecutive budget surplus in 1997.

Ghana is third among African markets for U.S. goods. Its stock exchange today boasts a capitalization of almost $2 billion, and Ghana has the only African-owned company on the New York Stock Exchange-Ashanti Goldfields. And, of course, South Africa, where American companies have come back in record number--350 by mid-1997--is one of our most promising big emerging markets.

America's commercial interests in Africa will deepen as companies begin to tap this market of approximately 700 million people. Our exports to Africa now exceed by one-third our exports to all of the former Soviet Union combined. America relies heavily on the continent for petroleum and strategic minerals. Twenty percent of U.S. oil imports come from the continent, a figure that is rising rapidly as U.S. oil firms compete for major finds in the Gulf of Guinea. Sub-Saharan Africa is now a larger supplier of U.S. crude oil than the Persian Gulf. Africa possesses 54% of the world's cobalt, 32% of its bauxite, 52% of its manganese, and 81% of the world's reserve of platinum. From gold, tin, diamonds, and copper to its most precious resource, its people, Africa's human and natural wealth should pay even greater dividends in the 21st century.

There also are significant and lucrative openings for American trade and investment. The U.S. Trade and Development Agency notes there are $2 billion worth of aerospace contracts coming up in Africa and the Middle East, including a $400-million renovation of airports in Cape Town, Durban, and Johannesburg and a $25 million upgrade in air traffic control in Botswana. The trend toward regional economic integration also presents new opportunities for U.S. firms vying for future contracts. The West African Economic and Monetary Union comprises a market of 200 million people, as does the Southern African Development Community-SADC- -a block of 14 countries committed to creating a common trading area. And the revitalized East African Community of Kenya, Uganda, and Tanzania comprises 77 million potential consumers. The Clinton Administration is working hard to make Africa's regional markets relevant and accessible to American businesses large and small, corporate and minority-owned.

From AT&T to Coca-Cola, from American Express to NewAfrica Advisors, American companies are getting in on the ground floor hoping to reach the penthouse by the mid-2000s. Microsoft Chairman Bill Gates notes, "Africa is one of the most exciting continents we are working in at the moment, and despite its complexities, we see it as one of the [world]'s fastest-growing regions."

Still, in many ways, the United States and its companies are behind the curve. For although the U.S. is the continent's leading market, only 1% of our trade and 1% of our direct foreign investment is in Africa, and the U.S. accounts for only 7% of Africa's imports. With thousands of U.S. jobs tied to exports to Africa, a U.S. share of that pie would mean new American jobs nationwide.

That is why during the President's historic trip 2 weeks ago, he sought to demonstrate to the American people and to the world our firm resolve: Africa can and must play a central role in U.S. commercial and economic policy. To capture Africa's potential and fuel its growth, the President is committed to implementing his Partnership for Economic Growth and Opportunity in Africa, a plan intended to catalyze and complement the work of other industrialized countries, international institutions, and the nations and people of Africa itself. Through the African Growth and Opportunity Act--now pending before the Senate--the Administration hopes to offer all African nations greater access to our markets. For those African countries aggressively pursuing economic reforms, we hope to open the American market to 40% more products on a duty-free basis.

We will also target our technical assistance to help African nations further these reforms. This means helping countries with creative approaches to finance and privatization, supporting the integration of regional markets and infrastructure development, and encouraging African entrepreneurs to take advantage of increased access to America's markets. In South Africa, the President launched an initiative to place young African interns with American companies to gain technical expertise in commerce, trade, and finance. The President indicated the United States willingness to negotiate free trade agreements with strong performing, growth-oriented African economies. Moreover, he also stressed his desire to working with Congress to restore U.S. assistance to Africa to its historic high levels, supporting Africa's sustainable transition from aid to trade in the next century.

Working to spur private investment, the President announced an Overseas Private Investment Corporation--OPIC--fund of half a billion dollars to support infrastructure investment to open roads, rail, and water ways for international commerce. The fund will also provide credit to microenterprises and women-owned businesses. The President also encouraged African efforts to create a binding anti-corruption convention. And because crippling debt continues to retard growth in many African states, the Administration has asked Congress for enough funding for the next fiscal year to wipe out all bilateral concessional debt for the fastest reforming countries. With our G-7 partners, we have secured a commitment from the World Bank to increase lending to African reformers by as much as $1.1 billion and to speed relief through the Highly Indebted Poorest Countries--HIPC--program. In the last several weeks, Uganda, Burkina Faso, Cote d'Ivoire, and Mozambique have qualified for HIPC debt relief. Mozambique's debt, for example, will be slashed from $5.6 billion to $1.1 billion when the program is implemented.

The President's trip to Africa was ground-breaking not only for the these commitments made to promote trade and investment, but because these and other initiatives will drive our political and economic agenda far into the future. In Rwanda, the President announced concrete steps to help the Great Lakes states establish durable and accountable justice systems. In Uganda, he unveiled an education initiative to invest further in human capital, provide Africans access to technology and information, and build strong democratic communities. The U.S. agreed to guarantee a loan for two barge-mounted power plants in Ghana to help respond to that country's energy shortages. We committed $61 million to a new African food security initiative aimed at improving the quality, safety, and distribution of African crops--and announced an immediate effort to help Sub-Saharan nations meet international air-safety standards and improve airport security.

At a summit in Entebbe, Uganda, with six other heads of state, President Clinton committed to forge a genuine partnership with Africa for the 21st century and to transform America's role in Africa's economic revitalization. Leaders from Uganda, Kenya, Rwanda, Tanzania, the Democratic Republic of Congo, and the Federal Republic of Ethiopia promised to join with us and help Africa move from the margins to the mainstream of the global economy. They pledged to speed the regional economic cooperation that is already underway and reconfirmed their desire for future high-level dialogue to advance the cause of modernization and reform.

Finally, the President announced his intention to invite leaders of reforming African nations to a summit meeting in Washington, and to increase high-level official missions to the continent over the coming year. Secretaries of Commerce, Treasury, and Transportation will each travel to Africa later this year, and on Friday, just 2 weeks after the President's return, the Chairman of the Export-Import Bank, James Harmon, will take an unprecedented trip to Africa.

All across America, in boardrooms and on the factory floors, in schoolrooms and shopping centers, Americans are beginning to talk about Africa. Through the prism of the American press corps that traveled with the President, they began to see new images of Africa--entrepreneurs receiving a $50 loan to start a business, the prospect of U.S. sixth graders linked up to the Internet reviewing math lessons with African children, and concerned African environmentalists discussing global development challenges. As business leaders in this room can attest, when perceptions change positively--among shareholders, advertisers, exporters, and consumers-- profits are likely to follow.

Yet for all this promise, Africa plainly is not free from peril. The potential for renewed genocide in Rwanda; the recent civil wars in Sierra Leone, Liberia, and both Congos; pariah states that export terror and military dictatorships all continue to threaten to reverse the fragile progress Africans have achieved and to stifle economic development. As the President noted in Rwanda, in Africa--as well as everywhere else in the world--there are still some who wish to "tear down, instead of build up." They must not succeed. We must continue to engage with Africans as they enter the 21st century. Their aspirations, achievements, and failures are tied closely to our own. Our stake in Africa is simple, enlightened self-interest. Americans can make themselves safer and more prosperous by helping Africa realize its potential.

Yet, we need your help to sustain the momentum of the President's visit and to strengthen relations between the United States and Africa. We need your help to create new economic ties based on partnership, not paternalism; trade and investment, as well as aid; and future opportunities, rather than past prejudices. We need your help to match American business experience with African entrepreneurial ingenuity. And we need your help to promote democracy, safeguard human rights, and encourage U.S.-Africa prosperity. This conference is one opportunity to begin the process of seizing this moment in history--a moment in which Africa's potential is clear and its future is still to be determined. In the words of President Clinton, now is the time to stop talking about what we should do for Africa, or about Africa--and talk in terms of what we can do with Africa. Now is the time to explore innovative marketing strategies targeted toward African consumers. Now is the time to review African stock portfolios. Now is the time to find new African destinations for your products and to work with us to make the African Growth and Opportunity Act, and our partnership for the 21st century, a reality.

I sometimes hear the question: How can the U.S. and Africa be true economic partners if our GDP dwarfs Africa's in comparison? An old Latin proverb states, "a dwarf on a giant's shoulders sees the further of the two." Let's work together to promote both African and U.S. affluence in the next century. As Africans pull up a chair at the global economic table, let's make sure we meet them with a clear, realistic, and focused agenda; that the reception they receive is warm, the dialogue lively, and the results beneficial to both our peoples. Thank you.