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Sub-Saharan Africa: Turning to the Future
By Mary Rekas
The allure of the unknown and the promise of untold riches have attracted adventurers to Africa for centuries. The big attraction today for U.S. agricultural producers is the promise of expanding trade with countries achieving a measure of political stability and prosperity.
In June 1997, the President’s initiative--Partnership for Economic Growth and Opportunity in Africa--led to the introduction of a bill, The Africa Growth and Opportunity Act, supported by Congress and the President. The initiative and bill place special considerations on expanding two-way trade and economic development activities in Africa.
The subcontinent, with its 600 million
inhabitants, comprises a potential market that should not be
overlooked by the United States. Newfound political stability and
economic reforms combined with investments in people and
agricultural technology are proving to be the ticket for improved
economic growth in a growing number of Sub-Saharan countries.
At least 15 African countries enjoyed more than 5-percent growth in their gross domestic product (GDP) in 1995; another four reached over 10 percent.
In an effort to promote these new beginnings where stability and economic growth will go hand-in-hand, the United States now takes a practical approach in its policy toward African nations. Where in the past direct aid was seen as a necessary mode of agricultural assistance, today’s policy also aims to increase bilateral trade and investment.
As the United States phases out export subsidies, African countries are liberalizing trade. Leading the trend toward liberalization: South Africa, Nigeria, Ghana and Côte d’Ivoire. South Africa has eliminated its agricultural control boards and significantly liberalized its trade policies; the other three countries have lowered import barriers and begun to reform their agricultural sectors.
In 1995, the United States and South Africa formed a Binational Commission (BNC), a continuing forum for examining bilateral relations between the two countries. USDA chairs the Agriculture Committee under the BNC that focuses on trade and other agricultural issues between the two countries.
Trade Is a Two-Way Street
Trade statistics bear out the significance of U.S.
agricultural trade with the Sub-Saharan countries. In 1997, the
United States exported $706 million worth of agricultural
products 
to the region.
This amount was $145 million, or 17 percent, less than the 1996
level. At the same time, imports from the subcontinent rose 3
percent ($24 million) over 1996, bringing our 1997 imports from
these countries to a record $830 million--tipping the positive
trade balance to the African countries.
U.S. exports to the region are substantial, although a hefty portion falls into the category of U.S. export promotion and food assistance programs. Major export trade partners included South Africa (31 percent), Nigeria (16 percent) and Ghana (7 percent). Exports included mostly grains, edible oils and poultry meat.
Leading U.S. agricultural import suppliers: Côte d’Ivoire (29 percent), South Africa (12 percent), Malawi (11 percent), Ethiopia (8 percent ) and Kenya (7 percent). Topping the list of imports: coffee, tea, sugar, tobacco and spices.
Export Assistance Programs Forge Links
The Foreign Agricultural Service administers USDA’s export assistance programs in Sub-Saharan Africa; they’re designed to help U.S. exporters as well as recipient countries.
Two credit guarantee programs underwrite payments from qualifying foreign banks, when credit is needed to support U.S. sales. Since 1996, GSM-102, the short-term credit program, extended $140 million in guarantees to the region--so far in fiscal year 1998 announcements have been made for another $135 million. Also in 1998, GSM-103, the longer-term credit program, announced $1 million for sales of breeder livestock to South Africa.
The Market Access Program (MAP) provides cost-share funds to U.S. participants to support export promotional activities, focusing on consumer-oriented products and on markets with developed or developing consumer demand. The program expended almost $81,000 in Sub-Saharan Africa in 1996.
The Foreign Market Development Program (FMD) focuses on increasing import demand over the long term by carrying out overseas promotional activities and by addressing infrastructure shortcomings and obstructive trading practices. The program for the region was funded at $319,000 in 1997.
Public Law 480 (P.L. 480), Title I, provides for government-to-government sales, under long-term credit arrangements, of agricultural commodities to developing countries and private entities. The countries then sell the commodities to generate money for mutually agreed-upon development activities. The program allocated $50 million for fiscal 1998, compared to $20 million for 1997.
The Food for Progress (FFP) program finances the sale and export of agricultural commodities, either on credit terms or on a grant basis, to support developing countries. These countries must commit to introducing or expanding free enterprise elements into their agricultural economies. Four private voluntary organizations will receive funding in 1998 to carry out program activities in South Africa, Mozambique and Angola.
Africa in the 21st Century
The Emerging Markets Program is funded at $10 million annually to provide technical assistance to promote U.S. agricultural exports in emerging markets.
Activities include: agricultural sector and joint-venture
assessments; market information systems; commodity exchange
development; resident policy advisors; training in importing,
agricultural banking and credit; business planning; farm and
agribusiness management; and sanitary and phytosanitary training.
The Cochran Fellowship Program provides short-term (3 to 6 weeks) agricultural training programs in the United States for mid- and senior-level professionals in agricultural trade, marketing, management, policy and technology transfer.
Cochran fellows have come to the United States from: Côte d’Ivoire (151 participants), South Africa (67 participants) and Namibia (5 participants). Kenya just began a program in 1997 with 5 participants. Coming up: new programs in Uganda, Tanzania and Senegal in 1998.
Longer term collaboration is funded through the Scientific Cooperation Program, which sponsors research projects that study potential threats to U.S. agriculture and forestry, development of new technologies and enhancement of trade in foreign markets. Over $400,000 has been committed for 13 mutually beneficial collaborative research projects and one short-term exchange visit.
In South Africa, USDA has worked with the South African Agricultural Research Council (ARC), provincial authorities, universities and small-farm cooperatives, spending over $150,000, with an additional $60,000 allocated for student grants and fellowships with historically black universities in the United States.
While looking to enhance ongoing educational outreach and exchange programs with South Africa, USDA also hopes to initiate similar programs with Ghana, Botswana, Uganda and Senegal.
USDA coordinates with the U.S. Agency for International
Development (USAID) to provide assistance and training to
strengthen technical, trade and political cooperation as well as
humanitarian assistance in agriculture, rural development, 
natural resources and famine and
disaster mitigation.
For example, in Ethiopia, USDA’s National Agricultural Statistics Service provides technical assistance to the USAID project to help improve the capability and capacity of local institutions involved in agricultural data collection and information processing.
The 24 projects underway in Africa expect total funding to exceed $12 million.
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The author is a public affairs specialist with the Foreign
Agricultural Service’s Information Division. Tel.: (202)
720-7939; Fax: (202) 720-3229; E-mail: rekas@fas.usda.gov.
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Food Security Remains a Big Concern
When U.S. delegates left the Rome World Food Summit in 1996, they brought home with them disturbing information about the ramifications of world hunger, backed by a recent assessment by USDA’s Economic Research Service: Unless remedial measures are undertaken now, the number of undernourished people in the world will increase by 10 percent by 2007. With as many as two-thirds of its 600 million people living with hunger, Sub-Saharan Africa will be particularly affected.
Africa’s food shortages have been receiving special attention from an outgrowth of the World Food Summit, the Interagency Working Group on Food Security, co-chaired by USDA, the Department of State and USAID. The action plan on food security being developed for the United States will likely give special attention to Sub-Saharan Africa, defining new projects and strengthening programs that are currently underway.
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It Takes a Village...With a Bank
One of the biggest rocks in the road to business development in rural Africa has been the lack of banking facilities for would-be entrepreneurs.
So it was a landmark event for rural small landowners, previously unable to obtain banking services, when through funding and consultations initiated under the BNC, South Africa recently opened the first three models for the Village Banks Project. These cooperative banks, owned and operated by local citizens in villages in South Africa’s Northwest province, will first serve as a repository for savings. As their financial bottom lines improve, they will expand their services to include credit and insurance. Once a working model is fully defined, plans include the establishment of 100 banks throughout the country.
Of course, these local, rural banks will do more than just provide individuals with some degree of economic security and independence. They will provide the basis for organized commerce that will empower communities to shape their futures.
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