Economic Growth and Trade
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The central challenge facing African economies is to reduce poverty through higher levels of economic growth. Long-term, broad-based economic growth is essential for Africa to increase incomes and reach its potential to become a significant trade and investment partner in the world economy. Although Africa has historically had the slowest growth of any region, its performance is improving substantially, lending hope for the future. African economies have continued to sustain the growth momentum of the 1990s, recording an overall real GDP growth rate of 5.8 percent in 2007. More than 30 sub-Saharan African countries recorded higher economic growth rates in 2007 than 2006. But these growth rates must be sustained and accelerated in order to have a significant impact on poverty and increase living standards. Furthermore, the increase in HIV/AIDS infection rates is taking its toll on Africa's workforce and has become a serious threat to Africa's economic well being.
To build on the progress made by many African economies, USAID supports efforts to broaden and strengthen economic reforms to increase economic growth. USAID seeks to strengthen the policy environment for effective economic reform by working with African policy analysts and policymakers to increase the knowledge needed to manage open, free market economies. USAID also supports research networks to strengthen African countries' capacity to improve and implement economic policies.
USAID concentrates its economic growth efforts in Africa on expanding openness to trade and investment, improving the enabling environment for the private sector, increasing agricultural productivity and trade, strengthening African capacity to manage economic and natural resources, and increasing rural incomes. USAID magnifies its impact by collaborating with other U.S. government agencies, donors, and development partners.
Appropriate trade policies offer opportunities for African countries to build free markets and increase foreign investments that promote economic growth, create jobs, and raise living standards. U.S. government assistance in helping African governments implement good policies has supported African efforts to reduce poverty through sustained, private sector-led economic growth.
A major component of USAID's economic growth and trade program is the African Global Competitiveness Initiative (AGCI), a $200-million, five-year Presidential Initiative aimed at promoting the export competitiveness of enterprises in sub-Saharan Africa in order to expand African trade with the United States and other international trading partners. AGCI builds on the African Growth and Opportunity Act (AGOA) and works with other donor initiatives, including the World Bank's Making Finance Work for Africa and the multilateral Infrastructure Consortium for Africa.
Managed by the respective USAID Regional Missions, Global Competitiveness Hubs are the regional focal points and primary implementers of AGCI. They are located in Ghana and
Senegal for west Africa, Botswana for southern Africa, and
Kenya for east and central Africa. They provide information and technical assistance to African organizations, U.S. government agencies, donor and civil society organizations, and the private sector on trade, investment, and business activities in the region, including training opportunities.
Hub programs are designed to reinforce regional and bilateral efforts to strengthen Africa's economic competitiveness and assist the nations of the area to take greater advantage of the trade opportunities provided by the AGOA and other global trade initiatives. Hub program themes include trade capacity building, improvements to the private sector enabling environment, better market access and opportunities, trade facilitation, lower business costs, food safety programs, and export promotion of higher quality, profitable African agricultural produce. The Hubs also provide support to the Initiative to End Hunger in Africa (IEHA).
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