Toward Africa 2.0

Harvard Business Review
Ndubuisi Ekekwe

A new dawn is coming to Africa. After decades of aid being the way the U.S. invested in the continent, a new approach seems to be emerging. In the coming weeks, the Africa Investment and Diaspora Act (AIDA), introduced by Congressman Bobby L. Rush, will be presented to Congress. The bill hopes "to advance the mutual interests of the United States and Africa with respect to the promotion of trade and investment and the advancement of socioeconomic development and opportunity." It will link members of the African diaspora to opportunities in their native continent and position them to contribute to economic progress in the U.S.

The U.S. does better for Africa when it supports talented Africans and offers scholarships to educate them in its elite universities. It has gotten better value for its taxpayers' money through this organic investment than via most alternatives. The African diaspora has played key roles in the development of the continent. From Nigeria's Azikiwe to Ghana's Nkrumah, the U.S. has educated some of Africa's great legends.

The education has helped, but the aid model has not worked well. Corruption continues to undermine the efficiency of international-assisted projects in Africa, especially when they are executed by governments. AIDA is coming at the right time. With about a billion potential customers, the continent is well positioned to offer growth opportunities for U.S. companies. Also, the Act will help create U.S. jobs. For Africa, trade and investment could enlisting the entrepreneurial energy of its citizens — both home and abroad. This Act will be a win-win on both sides of the Atlantic.

Africa does better when new businesses come to land. Nigeria moved from a GDP of $35 billion to $207 billion within a decade largely because of massive investment from foreign business partners in information technology and banking. Today, college graduates are opening knowledge companies that support one of the world's fastest-growing mobile markets. Many Africans in the diaspora are returning home to take advantages of this evolving business opportunity. If AIDA strengthens the economic link between the expatriates and their home countries, it will hasten the rate of technology diffusion as the natural trajectory emanates from the West, where most of it is now created, to Africa. Time has come for engagements in Africa to be designed around not aid but trade and investments.