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Updated November 12, 2020
The Trump Administration’s Prosper Africa Initiative
The Trump Administration’s Prosper Africa initiative aims
Structure
to expand U.S.-African trade and commercial ties. Its goals
Prosper Africa is not a new foreign aid program. Rather, its
include doubling U.S.-Africa trade, spurring joint U.S. and
goal is to harmonize and mobilize the existing programs,
African economic growth, and—as U.S. officials have
resources, and capabilities of 17 U.S. agencies and
stated—demonstrating “the superior value proposition of
departments in a cohesive, coordinated manner to achieve
transparent markets and private enterprise.”
the initiative’s goals. In addition to USAID, it includes the
U.S. International Development Finance Corporation
Past Administrations have similarly sought to expand U.S.-
(DFC), and U.S. trade promotion agencies: the Export-
Africa trade and investment ties, but gains to date have
Import Bank (EXIM), the Trade and Development Agency
been modest. In 2019, Africa accounted for 1.4% of U.S.
(TDA), and the Small Business Administration (SBA).
global trade and received 0.7% of U.S. foreign direct
Other participating agencies include the Office of the U.S.
investment. Such shares have declined relative to their
Trade Representative (USTR), the Millennium Challenge
historical highs a decade or so ago, suggesting that quickly
Corporation (MCC), the U.S. African Development
achieving sizable growth in such metrics may not be easy.
Foundation (USADF), and the Departments of Agriculture,
As such, Congress may seek to determine whether Prosper
Commerce, Energy, Homeland Security, Labor, State,
Africa is adequately funded, effectively configured, and an
Transportation, and the Treasury.
appropriate vehicle to attain such goals. (See Figure 1 for
recent U.S.-Africa trade trends.)
Figure 1. U.S. Trade with Africa ($ in billions)
Background, Vision, and Justification
Then-National Security Advisor John Bolton announced
Prosper Africa in a late 2018 speech unveiling the
Administration’s Africa strategy. The initiative, he said,
would foster U.S. investment, expand Africa’s middle class,
and enhance business climates across the region. He also
said it would help to counter “predatory” financial and
political efforts by Russia and China in Africa; “encourage
African leaders to choose high-quality, transparent,
inclusive and sustainable” U.S. and other foreign
investment projects; and expand African access to business
finance. U.S. officials formally launched Prosper Africa in
Source: U.S. Bureau of Economic Analysis (BEA).
2019 at the U.S. Corporate Council on Africa’s U.S.-Africa
Business Summit in Mozambique.
USAID hosts a secretariat that coordinates Prosper Africa
and is led by a Chief Operating Officer (CEO) from
The State Department’s FY2021 budget request states that
USAID. The initiative as a whole is led by an Executive
Prosper Africa aims to unleash U.S. “unmatched
Chairman (currently the head of the DFC). Its work is
competitive advantages to vastly accelerate” U.S-Africa
guided by a nonpublic National Security Council-
trade and investment, including by creating “a pipeline of
coordinated strategy and a separate inter-agency
U.S.-Africa trade and investment opportunities” for U.S.
implementation plan containing initiative goals and
firms active in the region. It seeks to do so, in part, by
assessment metrics.
helping to facilitate business transactions and “blended-
finance solutions to de-risk investment opportunities,” and
At the country level, each U.S. embassy in Africa maintains
a Prosper Africa “Deal Team”
by supporting business-facilitating regulatory and policy
drawn from existing mission
reforms and environments in Africa, the request states. It
staff. These teams aim to link U.S. firms to trade and
also promotes African exports to the United States under
investment opportunities in Africa, enable African firms to
the African Growth and Opportunity Act (AGOA Title I,
access similar prospects in the United States, and facilitate
P.L. 106-200, as amended, a trade preference program).
private sector access to U.S. trade assistance, financing,
Through such efforts, the initiative seeks to help transform
insurance, and related services. The secretariat and other
U.S.-Africa relations from “an aid-based focus to [a] true
Washington, DC-based staff support the teams in Africa, as
trade partnership” (as the FY2020 budget request stated)—a
well as efforts to expand U.S. business interest in African
markets. USAID’s trade hubs in
goal shared by several past Administrations.
Southern and West Africa
(see textbox below) help implement the initiative, and a
The FY2021 foreign aid budget request seeks $75 million
similar hub in North Africa also is planned. In place of a
for U.S. Agency for International Development (USAID)
similar former hub in East Africa, USAID plans to support
implementation of Prosper Africa, which was funded with
a Prosper Africa “Private Sector Engagement” project
$50 million in FY2020 and $25.5 million in FY2019.
centered on increasing two-way U.S.-Africa investment,
Further separate funding also is planned (see below).
https://crsreports.congress.gov
The Trump Administration’s Prosper Africa Initiative
pursuing new trade and investment-expanding activities,
improving business climates as a means of spurring private
and reducing trade and investment barriers. A broader five-
sector-led growth) are broader outcomes that direct U.S.
year, $500 million to $750 million USAID Africa Trade
agency action may be less capable of rapidly achieving.
and Investment Program supporting a wide range of
Building the capacity of African states to ensure
initiative goals and activities also is planned.
transparency and the rule of law in economic contexts (e.g.,
Implementation
to effectively enforce contract, property rights, and
anticorruption laws, and ensure equal market access for
As of early November 2020, Prosper Africa’s website
foreign and local investors) also are likely to be long-term
states, the initiative had helped bring more than 280 deals
endeavors. The same may be true of efforts to reform
worth an aggregate $22 billion to financial closure (i.e.,
inefficient cross-border trade procedures and encourage
completion of financing agreements necessary to enable a
African states to adopt and implement effective trade and
transaction to proceed) in more than 30 countries. Projects
investment policies—all long-standing U.S. goals.
it has supported are diverse. Many center on infrastructure
or access to credit or financial services. Other key sectoral
Whether an initiative like Prosper Africa can double total
foci include energy, agribusiness, transport, healthcare, and
U.S. trade with Africa—dominated in 2019 by U.S. exports
technology, and several focus on addressing emergent
of machinery, vehicles, aircraft, and fuels, and U.S. imports
COVID-19-related challenges. The initiative also supports
of fuels, precious metal and stones, agricultural goods, and
industry-specific and broader policy reforms.
ferroalloys—may be debated. Some of the fastest-growing
economies globally are in Africa, and a marked increase in
Prosper Africa in Perspective
trade with a handful of them could drive marked Prosper
Several past U.S. efforts in Africa have, like Prosper Africa,
Africa progress. Multiple structural and economic
sought to expand U.S.-Africa trade and investment by
governance weaknesses, however, have long made Africa
enhancing U.S. inter-agency coordination and by fostering
less economically competitive than other world regions.
private sector transaction activity centered on such ends.
Even in the better-performing countries, structural barriers
USAID’s Africa trade hubs, launched in the early 2000s, have
substantially hinder trade. Infrastructure gaps (e.g., limited
each pursued a unique, evolving set of region-specific trade
and unreliable electrical, transport, and communication
capacity-building activities. They also have supported intra-
systems), for instance, often impose high production,
regional trade and economic integration and worked to
logistical, and transport costs, dampening commerce.
expand African exports globally and to the United States
Meanwhile, low rates of industrialization and value-added
under AGOA. Other past U.S. efforts include the Obama
processing of raw commodities often constrain the
Administration’s Trade Africa and Doing Business in Africa
production of higher-value goods, economies of scale, and
(DBIA) initiatives. The former was a trade hub-led effort to
cross-sectoral linkages in goods, services, and financial
achieve many of the same goals as Prosper Africa in selected
markets. Some African exporters also face U.S. import
countries, as well as sub-regional economic integration. While
restrictions, such as tariffs and quotas, that limit their access
increased U.S.-Africa trade was a Trade Africa goal, the hubs
to the U.S. market, notably for some import-sensitive
offered few direct services to Africa-bound U.S. investors, in
agricultural goods, among other products.
part as USAID’s mandate focuses on foreign development, not
U.S. commercial activity. DBIA, a Commerce Department-led
Broader U.S. Aid Context and Issues for Congress
effort to increase U.S. business knowledge of African markets
Prosper Africa is augmented by diverse other U.S. trade
and U.S. trade promotion programs, is now defunct, apart
capacity building activities in Africa, including efforts to
from the DBIA President's Advisory Council. Made up of
support African implementation of the World Trade
private sector appointees, it provides advice on strengthening
Organization’s Trade Facilitation Agreement, which seeks
U.S.-Africa commercial ties, including under Prosper Africa.
to streamline cross-border trade processes and regulations.
Prosper Africa could potentially complement and leverage
African-led intra-regional trade expansion efforts, notably
Prospects and Challenges
the African Continental Free Trade Area (see CRS In Focus
At an institutional level, success for Prosper Africa may be
IF11423, African Continental Free Trade Area (AfCFTA)).
measured, in part, by how effectively the multiple
U.S. officials have voiced support for AfCFTA, but how
participating agencies—which have highly varied missions,
Prosper Africa may help to advance its realization—or the
performance goals, and organizational cultures—coordinate
Administration’s ongoing effort to clinch a U.S. free trade
their efforts. To do so, agencies are drawing on experience
agreement with Kenya (see CRS In Focus IF11526, U.S.-
gained under other ongoing multi-agency development
Kenya FTA Negotiations)—is not clear.
initiatives, such as Power Africa, an effort to expand access
to electricity in Africa. Under Power Africa, USAID and
For Members of Congress who support the goals set out
U.S. trade agencies, among others, jointly pioneered a
under Prosper Africa—including countering Chinese
project and transaction facilitation approach that closely
economic sway in Africa—the initiative may be welcome.
informs Prosper Africa’s Deal Teams model.
Some Members may seek to better understand how the
initiative is operating in practice—and vis-à-vis its strategy,
Some Prosper Africa goals may be easier to achieve than
implementation plan, and metrics—as they weigh how, if at
others. Streamlining access to U.S. trade and investment
all, to further fund and support execution of the initiative
programs and aiding specific transactions, for instance,
following an anticipated U.S. presidential transition.
while challenging, is in U.S. agencies’ direct span of
control—although utilization of U.S. government loans and
Nicolas Cook, Specialist in African Affairs
financial services ultimately depends on private sector
demand. Other goals (e.g., financial sector expansion and
https://crsreports.congress.gov
The Trump Administration’s Prosper Africa Initiative
IF11384
Brock R. Williams, Specialist in International Trade and
Finance
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https://crsreports.congress.gov | IF11384 · VERSION 3 · UPDATED