By Ben Leo, Special to CNN
Editor's note: Ben Leo is a Senior Fellow and Director of the Rethinking US Development Policy initiative at the Center for Global Development. The views expressed are his own.
"Where are President Obama and the United States? We see China every day and more and more of our officials are getting in bed with their leaders and businesses. But, where has America gone?"
I still vividly recall the remarks from a leading Ghanaian businessman two years ago over drinks in Accra. It summed up the confused mood of many Africans at the time – not just in Ghana, but across the rest of the continent. After years of economic growth and improving investment climates, they were increasingly bewildered that Washington had not elevated its economic engagement.
But while public attitude surveys perhaps unsurprisingly suggest Africans are most concerned about a lack of jobs, poor infrastructure, the economy, and rising inequality, the U.S. response to these concerns has been puzzlingly inconsistent. Indeed, while Africans have tended to worry most about the kind of economic policies that affect their wallets, only 16 percent of U.S. development assistance in Africa over the last decade has focused on these priorities.
Take the example of Kenya, the anchor of east Africa.
Kenya has received roughly $5 billion in U.S. development financing over the last decade. During this time, Kenyans consistently raised jobs, infrastructure, and economic policies as the three most pressing problems facing their country. Not surprisingly, the Kenyan government has sought to overhaul its business climate and dramatically increase financing for infrastructure as a way to boost economic growth, foreign investment, and job creation.
And what percentage of U.S. financing has been allocated helped to address such priorities? Only 6 percent. And a paltry 3 percent in 2011. And Kenya is only one example – U.S. financing patterns in Nigeria, Uganda, Zambia, and many other countries paint a similar picture.
But the tide may be starting to change. After five years in office, President Obama has emerged from the shadows on the issue, and is seeking to forcefully reinsert America on the African economic stage. This was underscored during his long-awaited visit to the continent this past summer, when he boldly declared that investment, trade, and economic opportunity would increasingly headline Washington's engagement with the region. To drive this message home, the White House announced a series of new efforts, including an electricity initiative, a regional investment treaty, and renewing and updating trade legislation.
Still, if President Obama's policy pivot in Africa is going to succeed, then his administration will need to address this longstanding mismatch between U.S. commercial, foreign, and development policy priorities and what Africans cite as their own priorities. That doesn't mean walking away from America’s instrumental and outsized contribution to fighting scourges like HIV/AIDS and malaria, which account for the lion's share of U.S. spending in the region – these programs, launched by President Bush and continued by President Obama, are doing a lot of good. But it does mean elevating woefully under-utilized tools that will ultimately help to foster greater trade, investment, and economic opportunities – all of which will anyway have positive impacts on challenges such as health.
So, what should this mean in practice? One change should include kicking into high gear a number of government bodies that very few people outside of Washington have ever heard of. Take the Overseas Private Investment Corporation, which supports U.S. private investment in frontier markets through loans, guarantees, and political risk insurance. OPIC has, for example, provided $209 million in loans and insurance to support Contour Global's new 100-megawatt power plan in the West African nation of Togo, an investment that helped to eliminate rolling blackouts and remove a major impediment to job creation and economic growth. The project was recognized this year as one of the best private-public partnerships in the world by the World Bank Group's International Finance Corporation.
And there’s also a little known program tucked deep inside the U.S. Agency for International Development called the Development Credit Authority, whose sole job is to help unlock local capital in developing countries through limited loan guarantees by showing that underserved entrepreneurs – like small factory owners or farmers – are worth the credit risk. With an annual operating budget of only $8 million, DCA has helped catalyze $1 billion in local lending over the last two years alone.
Finally, there is America's only development agency with an explicit mandate to support locally driven priorities, the Millennium Challenge Corporation (MCC). Once becoming eligible for MCC assistance, developing country governments – with active input from citizens and businesses – develop their own strategies and projects. Strikingly, nearly every African nation has chosen to focus on infrastructure, such as roads, ports, and power. In fact, where U.S. assistance has been strongly aligned with people's most pressing priorities, the MCC is almost always the key driving force behind it.
Based on President Obama's new rhetoric and initiatives, it sounds like his administration is now finally tuning in to what Africans have been saying for a long time: they want jobs, infrastructure, and better economic policies. But, the hard work of shifting Americans' mindsets and Washington's core policy priorities has only started. The good news is that once policymakers' views finally do change there will be plenty of underutilized tools waiting for them.