U.S. diplomacy cutting measures in Africa & export impacts

In response to ongoing tariff wars, the United States has implemented cost-cutting measures by shutting down multiple embassies in Africa. The African Growth and Opportunity Act (AGOA) renewal is also hanging in uncertainty, raising questions about the impact on U.S.-Africa businesses. Bernard Laurendeau, Founder of Enkopa Lab, joined CNBC Africa to shed light on the implications of these measures. Laurendeau highlighted the uncertainty surrounding the cuts in African diplomacy and trade negotiations. While some agencies like the U.S. African Development Foundation have been shut down, recent allegations of embassy closures remain uncertain. Secretary of State Marco Rubio clarified that reports of the Bureau of African Affairs being slashed were false. Laurendeau emphasized the need for Africa to enhance its trade with the U.S., given its current modest share of U.S. annual trade, amounting to 1% or approximately $70 billion per year. AGOA, introduced 24 years ago, initially boosted trade numbers but has seen a decline in recent years. Laurendeau proposed a greater role for the private sector in trade negotiations to provide market intelligence, risk assessment, and advisory services. He highlighted the opportunity for African businesses to redefine how the U.S. perceives the African markets, potentially attracting more foreign direct investments (FDIs). Amidst sweeping tariffs on African imports, Laurendeau stressed the importance of accurate intelligence reports for American investors to navigate the uncertain trade landscape. The ongoing tariff wars, magnified by the U.S.-China competition, present an opportunity for Africa, which accounts for about 30% of critical mineral resources globally. Africa can leverage this advantage to reshape its trade relationship with the U.S. and attract investments. Laurendeau emphasized the need for strategic lobbying efforts by African countries to secure favorable trade terms and position Africa as a competitive destination for manufacturing and resource extraction. Despite concerns of liquidity squeeze and currency instability, Laurendeau remained optimistic about increased American FDIs in Africa in the short term, particularly in sectors like tech, consumer goods, financial services, and manufacturing, offering a positive outlook for business opportunities in Africa. In conclusion, Laurendeau's insights underscore Africa's potential to capitalize on the evolving global trade dynamics and foster a mutually beneficial trade partnership with the United States. By leveraging its resources and lobbying efforts, Africa could enhance its attractiveness to American investors and drive economic growth in the region.