The Trump Administration’s Prosper Africa Initiative

The Trump Administration’s Prosper Africa Initiative

Updated November 17, 2020
The Trump Administration’s Prosper Africa Initiative
The Trump Administration’s Prosper Africa initiative aims
Structure
to substantially increase U.S.-African trade and investment
Prosper Africa is not a new foreign aid program. Rather, its
ties, spur joint U.S. and African economic growth, and—as
goal is to harmonize and mobilize the existing programs,
U.S. officials have stated—demonstrate “the superior value
proposition of transparent markets and private enterprise.”
resources, and capabilities of 17 U.S. agencies and

departments in a cohesive, coordinated manner to achieve
Past Administrations have similarly sought to expand U.S.-
the initiative’s goals. In addition to USAID, it includes the
Africa trade and investment ties, but gains to date have
U.S. International Development Finance Corporation
been modest. In 2019, Africa accounted for 1.4% of U.S.
(DFC), and U.S. trade promotion agencies: the Export-
global trade and received 0.7% of U.S. foreign direct
Import Bank (EXIM), the Trade and Development Agency
investment. Such shares have declined relative to their
(TDA), and the Small Business Administration (SBA).
historical highs a decade or so ago, suggesting that quickly
Other participating agencies include the Office of the U.S.
achieving sizable growth in such metrics may not be easy.
Trade Representative (USTR), the Millennium Challenge
As such, Congress may seek to determine whether Prosper
Corporation (MCC), the U.S. African Development
Africa is adequately funded, effectively configured, and an
Foundation (USADF), and the Departments of Agriculture,
appropriate vehicle to attain such goals. (See Figure 1 for
Commerce, Energy, Homeland Security, Labor, State,
recent U.S.-Africa trade trends.)
Transportation, and the Treasury.
Background, Vision, and Justification
Figure 1. U.S. Trade with Africa ($ in billions)
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
2019 at the U.S. Corporate Council on Africa’s U.S.-Africa

Business Summit in Mozambique.
Source: U.S. Bureau of Economic Analysis (BEA).
The State Department’s FY2021 budget request states that
A Prosper Africa Executive Chairman, currently the head of
Prosper Africa aims to unleash U.S. “unmatched
the DFC, provides strategic guidance for the initiative. Day
competitive advantages to vastly accelerate” U.S-Africa
to day implementation and coordination are led by a Chief
trade and investment, including by creating “a pipeline of
Operating Officer from USAID, aided by a USAID-based
U.S.-Africa trade and investment opportunities” for U.S.
interagency initiative secretariat and input from a Policy
firms active in the region. It seeks to do so, in part, by
Coordination Committee. This work is guided by a
helping to facilitate business transactions and “blended-
nonpublic National Security Council-coordinated strategy
finance solutions to de-risk investment opportunities,” and
and a separate inter-agency implementation plan setting out
by supporting business-facilitating regulatory and policy
initiative goals and assessment metrics.
reforms and environments in Africa, the request states. It
At the country level, each U.S. embassy in Africa maintains
also promotes African exports to the United States under
a Prosper Africa “Deal Team” drawn from existing mission
the African Growth and Opportunity Act (AGOA Title I,
staff. These teams aim to link U.S. firms to trade and
P.L. 106-200, as amended, a trade preference program).
investment opportunities in Africa, enable African firms to
Through such efforts, the initiative seeks to help transform
access similar prospects in the United States, and facilitate
U.S.-Africa relations from “an aid-based focus to [a] true
private sector access to U.S. trade assistance, financing,
trade partnership” (as the FY2020 budget request stated)—a
insurance, and related services. The secretariat and other
goal shared by several past Administrations.
Washington, DC-based staff support the teams in Africa, as
well as efforts to expand U.S. business interest in African
The FY2021 foreign aid budget request seeks $75 million
markets. USAID’s trade hubs in Southern and West Africa
for U.S. Agency for International Development (USAID)
(see textbox below) help implement the initiative, and a
implementation of Prosper Africa, which was funded with
similar hub in North Africa is planned. In place of a similar
$50 million in FY2020 and $50 million in FY2019. Further
former hub in East Africa, USAID plans to support a
separate funding also is planned (see below).
Prosper Africa “Private Sector Engagement” project
centered on increasing two-way U.S.-Africa investment,
https://crsreports.congress.gov

The Trump Administration’s Prosper Africa Initiative
pursuing new trade and investment-expanding activities,
agency action may be less capable of rapidly achieving.
and reducing trade and investment barriers. A broader five-
Building the capacity of African states to ensure
year, $500 million USAID Prosper Africa Trade and
transparency and the rule of law in economic contexts (e.g.,
Investment Program supporting a wide range of initiative
to effectively enforce contract, property rights, and
goals and activities also is planned.
anticorruption laws, and ensure equal market access for
Implementation
foreign and local investors) also are likely to be long-term
endeavors. The same may be true of efforts to reform
As of early November 2020, Prosper Africa’s website
inefficient cross-border trade procedures and encourage
states, the initiative had helped bring more than 280 deals
African states to adopt and implement effective trade and
worth an aggregate $22 billion to financial closure (i.e.,
investment policies—all long-standing U.S. goals.
completion of financing agreements necessary to enable a
transaction to proceed) in more than 30 countries. Projects
How much an initiative like Prosper Africa can expand total
it has supported are diverse. Many center on infrastructure
U.S. trade with Africa—dominated in 2019 by U.S. exports
or access to credit or financial services. Other key sectoral
of machinery, vehicles, aircraft, and fuels, and U.S. imports
foci include energy, agribusiness, transport, healthcare, and
of fuels, precious metal and stones, agricultural goods, and
technology, and several focus on addressing emergent
ferroalloys—may be debated. Some of the fastest-growing
COVID-19-related challenges. The initiative also supports
economies globally are in Africa, and a marked increase in
industry-specific and broader policy reforms.
trade with a handful of them could drive marked Prosper
Africa progress. Multiple structural and economic
Prosper Africa in Perspective
governance weaknesses, however, have long made Africa
Several past U.S. efforts in Africa have, like Prosper Africa, sought to
less economically competitive than other world regions.
expand U.S.-Africa trade and investment by enhancing U.S. inter-
Even in the better-performing countries, structural barriers
agency coordination and by fostering private sector transaction
substantially hinder trade. Infrastructure gaps (e.g., limited
activity centered on such ends. USAID’s Africa trade hubs, launched in
and unreliable electrical, transport, and communication
the early 2000s, have each pursued a unique, evolving set of region-
systems), for instance, often impose high production,
specific trade capacity-building activities. They also have supported
logistical, and transport costs, dampening commerce.
intra-regional trade and economic integration and worked to expand
Meanwhile, low rates of industrialization and value-added
African exports global y and to the United States under AGOA.
processing of raw commodities often constrain the
Other past U.S. efforts include the Obama Administration’s Trade
production of higher-value goods, economies of scale, and
Africa and Doing Business in Africa (DBIA) initiatives. The former was
cross-sectoral linkages in goods, services, and financial
a trade hub-led effort to achieve many of the same goals as Prosper
markets. Some African exporters also face U.S. import
Africa in selected countries, as wel as sub-regional economic
restrictions, such as tariffs and quotas, that limit their access
integration. While increased U.S.-Africa trade was a Trade Africa goal,
to the U.S. market, notably for some import-sensitive
the hubs 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.
Broader U.S. Aid Context and Issues for Congress
commercial activity. DBIA, a Commerce Department-led effort to
increase U.S. business knowledge of African markets and U.S. trade
Prosper Africa is augmented by diverse other U.S. trade
promotion programs, is now defunct, apart from the DBIA President's
capacity building activities in Africa, including efforts to
Advisory Council. Made up of private sector appointees, it provides
support African implementation of the World Trade
Organization’s Trade Facilitation Agreement, which seeks
advice on strengthening U.S.-Africa commercial ties, including under
Prosper Africa.
to streamline cross-border trade processes and regulations.
Prosper Africa could potentially complement and leverage
Prospects and Challenges
African-led intra-regional trade expansion efforts, notably
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
For Members of Congress who support the goals set out
to electricity in Africa. Under Power Africa, USAID and
under Prosper Africa—including countering Chinese
U.S. trade agencies, among others, jointly pioneered a
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
Brock R. Williams, Specialist in International Trade and
demand. Other goals (e.g., financial sector expansion and
Finance
improving business climates as a means of spurring private
sector-led growth) are broader outcomes that direct U.S.
IF11384
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The Trump Administration’s Prosper Africa Initiative

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