I’m looking forward to attending the upcoming US-Africa trade summit in Johannesburg. After the drama of will-it-or-should-it-be held in South Africa, for reasons that had nothing to do with trade, I’m glad the issue is settled and the summit is on.
The stated purpose of the summit is the future of the African Growth & Opportunity Act (Agoa), the flagship US trade programme for the continent, granting tariff-free access to the US market. The agreement is due to expire on September 30 2025.
The minister of trade & competition, Ebrahim Patel, has been clear about the need for Agoa's extension. “An extension of Agoa beyond 2025 will promote inward investment in Africa and provide benefits to both the US and African countries,” he said in a recent statement.
Extending Agoa is the pretext for the meeting, but it should be the subtext. Extending Agoa is a no-brainer. For the US, it underscores President Joe Biden’s seriousness about engaging Africa. It gives even greater substance to previous overtures, from Biden’s African leaders summit hosted last year in Washington to Vice-President Kamala Harris’s follow-up visit to the continent this year.
Having said that, if Agoa is the sole focus of the summit, it will be a wasted opportunity.
On October 20, China announced a ban on exports of natural graphite, artificial graphite and products made with them unless the Beijing government grants permission. The ban takes effect on December 1. Given that graphite is one of the essential minerals critical to the clean energy transition around the world, China’s ban is huge.
In light of this, endorsing Agoa should be a fait accompli. The only real issue for discussion is what should the US be doing to secure its supply chain of critical minerals and how does its relationship with Africa advance that agenda?
Africa is estimated to have 21% of the world’s graphite reserves, 85% of the world’s manganese, 80% of the platinum and chromium, and the list goes on. The amount of money going into mineral exploration in Africa is a fraction of what’s spent on exploration worldwide. Given US needs, Africa’s abundant resources, and the degree to which these resources are under-explored in Africa, the focus of the summit seems obvious.
The US recently initiated a minerals security partnership (MSP), the purpose of which is to increase public and private investment in the world's most important mineral supply chains. Members of the MSP are Norway, Italy, India, Australia, Canada, Finland, France, Germany, Japan, South Korea, Sweden, the UK, the US and the EU. An obvious question smacks you in the face: how can you have an MSP when none of the primary partners are countries with the minerals you need?
One of the subjects of the summit should be enlarging the partnership to include African countries. Those added should be countries with a demonstrable record of democratic governance and not the same old outliers such as the “Democratic” Republic of the Congo. There are 15 countries across the continent that should be under consideration, such as Tanzania, South Africa, Mozambique, Malawi, Kenya and Ghana, to name a few.
Africa has an abundance of critical minerals and what the US does to craft a fair deal with Africa is the real deal (or only deal) worth talking about
One of the aims of the partnership must be to encourage processing and value-addition beyond the investment needed for the extraction of the critical minerals the West and rest of the world needs. The point being, the partnership must benefit African entrants into the partnership.
In addition to the MSP, some have suggested the US extend the Inflation Reduction Act to benefit resource-rich regions of the world, such as Africa. The tax credits for battery mineral content could be extended to encourage partnerships with companies such as Pula Graphite Partners, a Tanzania-based, US-backed subsidiary, as a way of securing the supply chain for critical minerals.
The US should also consider instruments such as free trade agreements with African countries to more easily connect resources to end-users in the US.
Whether within existing policy frameworks or additional policy initiatives, there are ways the departments of state, energy, defence and commerce, and the Exim Bank, can use their leverage to encourage business-to-business partnerships with African-American companies and others in the African diaspora to expand the players on the field and options to address the need for critical minerals. The US has a substantial base of such companies and should take advantage of what is a unique option and opportunity.
Clearly these suggestions don’t exhaust the list of things that can be done. However, they are indicative of the things that need to be done. None of these suggestions should be seen as a rationale for allowing Agoa to expire. You can’t do addition by subtraction. The US should be pursuing strategies that build on previous benchmarks rather than starting over every time a new administration takes office.
From November 2-4, there’s time to talk about a lot of things. Extending Agoa should be the quickest conversation on the agenda, the subtext for the summit. Given the changed realities and challenges, the real text is: minerals matter. Africa has an abundance of critical minerals and what the US does to craft a fair deal with Africa is the real deal (or only deal) worth talking about.
• Stith is a former US ambassador to Tanzania and is chair of The Pula Group, which invests in high value opportunities, principally in Africa.
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