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Opinions of Wednesday, 6 August 2014

Columnist: The Guardian Post

US-Africa summit: Why now?


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President Biya is one of the 50 African leaders attending the pioneer US-Africa summit in Washington. But for the government to reap the benefits of the summit, it must intensify its fight against corruption. On the eve of the conference, US secretary of state, John Kerry challenged African civil society activists to campaign for democracy and human rights, often violated in many African countries.

Kerry disclosed that the US believes when people can trust their government, a society is more prosperous and stable, and less likely to descend into violence and extremism. He was just re-echoing what he said earlier at a forum on economic opportunity: "It's also why we're determined to deepen our partnership and deliver on remarkable opportunities for peace, for security, for economic growth and most importantly in the context of what brings us here today, the empowerment of people through their government, through their civil society."

To underline its resolve to promote good governance and democracy in African countries, the Obama administration wants to work with, President Robert Mugabe of Zimbabwe and President Omar Al-Bashir of Sudan who were not invited as well as the president of war-torn Central African Republic.

The Liberian president, Ellen Johnson-Sirleaf and her Sierra Leonean counterpart, Ernest Bai Koroma were invited but they turned down the invitation because of the Ebola epidemic that has killed over 700 people in their countries and still spreading.

Why is the United States, despite its global influence holding its own summit with Africa just now when Europe, Japan and China have long held theirs? Economic experts say it is America’s response to the growing economic clout of China in Africa. China which is predicted to overtake the United States in the next ten years from its second position as the world’s strongest economy trades with Africa in the region of $200 billion yearly which is double the volume of US-Africa trade.

With six of the world’s tenth fastest growing economies in Africa, America is also interested in having a bite of the African apple. Washington’s intention behind the summit is to negotiate billions of dollars in business deals, more funding for peace-keeping, boosting electricity generation and distribution in sub-Saharan countries.

Despite government’s publicity of its attractive investment climate for foreign capital, both the United States and the Bretton Woods Institutions in which the Americans wield dominant influence are not convinced that the Yaounde authorities are doing enough to meet the required international benchmark.

The US state department in its annual report continues to fault the high level of corruption as well as flaws in the electoral system. The Americans have not re-opened the USAID office in Yaounde closed in circumstances believed to be in protest against the Biya regime’s unimpressive human rights record and bad governance.

A recent International Monetary Fund, IMF report said Cameroon is likely not going to emerge in 2035 because of an unsatisfactory growth rate which cannot considerably reduce poverty. IMF representative, Boriana Yontcheva explained recently that Cameroon’s 4.7 percent growth rate for 2013 crumbled from government’s projection of 6.1 percent. The IMF further noted that Cameroon's economic growth rate was even below the Sub-Saharan African regional average and could result only to a 5.4 percent growth rate in 2020 against a projection of 10.2 percent.

To do better, the IMF said, “a combination of reforms to enhance the effectiveness of the public expenditure and to foster private sector response has become critical. Regional security risks add as elements of urgency to reforms to make the economy more resilient and to rekindle regional integration”.

The government response has been the introduction of a “contingency plan”. Government’s thinking is that a robust growth and job creation are “the two pillars of the national development strategy” being implemented by public authorities. The minister of economy, planning and regional development, Emmanuel Nganou Djoumessi, achieving a growth rate of at least 6% in 2014 requires the support of organizations representing the private sector which is the main engine of growth.

Government’s goal is also to improve the business climate, modernise the production machinery, strengthen access and availability of factors of production, foster access to finance and accelerate industrialization. Yaounde also envisages a substantially higher Gross Domestic Product to take the country “closer to emergence” to attract national and foreign investors.

That’s a hard-sell for the Biya team at the US-African summit where the competition to attract Americans to Africa is stiff. Is the Biya regime capable of meeting up with the task? It can. But he has to urgently address the depressing performance which continues to hamper optimal use of public finance.

American companies are most likely not to invest in a system where legal redress would take years. One of the reasons AES SONEL left Cameroon was its inability to collect huge debts which an insider said they could not take the debtors on because of a corrupt judiciary which takes as many as five years to make a judgment in many cases.

President Barack Obama’s summit is however not only about investments. The opening forums touched on issues like security, health, the environment and of course corruption. But the bottom line remains that there must be an improvement in the economy of poverty-ridden African countries, among which is Cameroon.

The quality of investment also matters especially as experts have alerted that some “are not necessarily improving Africans’ livelihoods as Africa too often gets unethical investments that stifle efforts to foster inclusive growth, reduce poverty, and enhance food and nutrition security“. In such portfolios, Africa loses an estimated 5.7% of its GDP annually in illicit financial flows, principally because of tax evasion.

The Guardian Post agrees that Cameroon has the natural and human resources to lure foreign investors but as President Obama has said, Americans are not likely to be attracted to countries with bad governance, a murky human rights record and lagging in the democratisation process. Does the Biya regime make that mark to derive any benefit from the US-Africa summit which ends today? We doubt.

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