Keynote Address to the Africa Travel Association
Deputy Assistant Secretary, Bureau of African Affairs
Good morning. It is a pleasure to be here with you all today. I would like to extend my thanks to Executive Director Edward Bergman and to the Africa Travel Association for hosting this event and for inviting me to take part in its 5th Annual U.S. – Africa Seminar.
The United States and Africa have long been partners to ensure sustained economic development which reaches all sectors of society. Our goals for Africa fit squarely within Secretary Clinton’s economic statecraft agenda, which has helped refocus the way the U.S. government engages in its diplomatic operations, placing a heavy focus on economic growth and cooperation as a key pillar of our foreign policy. Secretary Clinton stated: “Our problems have never respected dividing lines between global economics and international diplomacy. And neither can our solutions.”
Last Economic Frontier
The principles embodied in the Secretary’s vision of economic statecraft are highly relevant to Africa -- last global economic frontier. Sub-Saharan Africa has achieved impressive economic results over the past decade, including sustained economic growth rates of 5 to 6 percent per annum, growing private sector engagement, improved investment climates, and increased bilateral trade. It is my hope that these positive trends will continue in the years ahead, helping to simultaneously lift people out of poverty, while also creating jobs for American workers in businesses that are positioned to serve the growing African middle class -- a middle class that increasingly has disposable income.
There is no question that robust economic development is the key to Africa’s future. Strong, growing economies help stabilize democracies, promote peace, and improve social and health conditions. Many countries in Africa are transitioning into a new phase of economic opportunity that, if managed well, could solidly launch individual economies on a path towards prosperity and peace – and open up new areas for U.S. business.
The U.S. government supports a number of different policies and programs to help Africans and Americans alike capitalize on these emerging opportunities. Whether through the low tariffs for thousands of goods in our centerpiece trade and investment vehicle, the Africa Growth and Opportunity Act, the export financing we provide through the Ex-Im bank, or project financing through the Overseas Private Investment Corporation, the U.S. government continues to dedicate significant resources to supporting two-way trade with Africa. We also routinely engage representatives of African governments both here in Washington and through our Embassies to underscore the importance of good governance, sound economic policy, and a strong regulatory environment as necessary policy choices to spur trade and investment, which in turn help drive economic growth.
One of our programs has specifically helped the tourism industry: our Safe Skies for Africa Program focuses on making air transport safer and has assisted African airport to meet the standards necessary for U.S. carriers to enter Africa. Through this program, Africa can realize better integrated and safer air transport, which will help to foster the further growth of aviation services between Africa and the United States.
We also continue to work in the area of facilitating airline access to international capital markets by encouraging African states to lift barriers to cross-border investments. We will continue working with African states to promote investment and sustainable growth in physical and transportation infrastructure.
A large number of countries worldwide depend on tourism for significant revenue, and Africa is no exception. While reading the 2011 State of Tourism in Africa Report, I was struck by the fact that international tourism receipts in Africa totaled USD $44 billion in 2010. This signifies that the sector can become a powerful platform for Africa’s economic growth, and especially, U.S.-Africa tourism.
While it is still an emerging market within the continent, the regional tourism industry has been growing, and at an impressive rate, with tourism arrivals to Africa more than doubling over the last ten years; reaching 63 million persons in 2010 and employing 7.7 million Africans. Sustained economic growth means that African countries need not rely on foreign tourists alone.
Yet, in order for this growth to continue, much still needs to be done. Tourism is a highly competitive business. In the age of digital communication and advertisement, maintaining competitiveness requires the effective use of technology, information, and innovation. As a result, it is often how a state’s resources are managed, and how efficiently they are coupled with man-made innovations, which determines the success of tourist industries.
To this end, Africa’s growth potential both in the tourism industry and in general rests upon its ability to create a solid foundation upon which to develop: a foundation comprised of high-quality infrastructure coupled with strong institutions.
Adequate infrastructure is crucial to a country’s growth and success as a tourism destination. Many African states still need to develop the infrastructure necessary for advancing tourism, including access to energy, transportation, and telecommunications.
The United States continues to work with African states in order to develop this needed infrastructure. In February, the State Department’s Bureau of African Affairs organized a successful energy trade mission to Mozambique, Tanzania, Nigeria, and Ghana with the goal of encouraging governmental reform and highlighting investment opportunities for American businesses. Later that month, Secretary Clinton hosted the first State Department Global Business Conference, which brought together representatives of overseas American business organizations and highlighted investment opportunities for U.S. businesses across the globe, including a regional breakout session. And I am sure you are all familiar with the Millennium Challenge Corporation (MCC) and the good work it is doing to help develop needed infrastructure in important markets.
Infrastructure will also be the centerpiece of our annual the African Growth and Opportunity Act forum. We hope that Africans will be able to take advantage of trade opportunities when we take the policy discussion a step further when we head out to a follow-on event, the U.S.-Africa Business Conference in Cincinnati. This two-day event in Ohio will focus on trade facilitation, with a special emphasis on infrastructure, and will enable African government officials and entrepreneurs to meet with U.S. businesses, thereby expanding trade networks and helping to identify new trade opportunities.
Infrastructure development is also important for African tourism. The tourism sector cannot develop as readily without the enhancement of health services and personal safety in tourist areas. Likewise, the formulation of transportation policies which establish a more integrated transportation network and clear regulatory system can help reduce the costs of traveling, and fuel competition and growth through the encouragement of greater investment.
A country’s success as a tourist destination also rests with how easily it can be accessed. Thus, sufficient aviation infrastructure is vital when it comes to the ability to attract both greater levels of tourism, and private sector investment for funding other necessary infrastructure requirements.
While there are numerous best practice models within the tourism industry that can be applied to help improve the industry across the continent, what works for one state may not always work for all. The preferences of consumers are formed by the cultural, geographic, or regulatory characteristics of the communities they are visiting. Understanding this relationship allows for the adoption of more fluid sector growth models, allowing communities and states to develop better overall business models, and to more efficiently direct investment.
The Serena hotel chain has stood as an example of the positive spillover effects associated with direct community involvement. Serena community based business models in East Africa have focused on consuming locally produced goods when possible, thus adding local suppliers and employees to the value chain and on utilizing information from, and the support of, local leaders and ethnic groups in the packaging of tours and the building up of local infrastructure to the mutual benefit of all.
Elsewhere in southern Africa, Namibia, with the support of a US $304.5 million Millennium Challenge Corporation Compact, is working to improve tourism. Some $66 million of the compact will be devoted to improving tourism potential and park conservation efforts; efforts which include improving the management and infrastructure of tourist destinations such as Etosha National Park. Through reforms focused on better budget control and transparency, technical assistance, training for management personnel, and investments in local road systems, we expect to realize more private investment in the park and an overall increase in tourism throughout the country.
As Africa continues to grow, so too will its tourism potential. It is up to all parties involved, be they governments, consumers, investors, or local leaders, to work together to realize the goal of a more integrated, open, and developed Africa.
I would like to thank the African Travel Association again for inviting me. I wish it continued success and look forward to future opportunities for U.S. - African cooperation and growth. Thank you.