Obama says U.S. business will invest billions in Africa

Last Updated Aug 5, 2014 4:30 PM EDT

The U.S. government and businesses are committing $33 billion to improve infrastructure throughout Africa and strengthen economic ties with the continent, President Obama announced Tuesday, as part of a plan to boost trade and strengthen America's role there before it falls too far behind Europe and China.

Nearly 50 African heads of state, more than 300 government officials and representatives from more than 90 U.S. and African companies are gathered in Washington this week for the U.S.-Africa Leaders Summit. The business forum Tuesday gives African leaders and American CEOs the opportunity to discuss U.S. private sector engagement in Africa in finance and capital investment, infrastructure, power, energy, agriculture, consumer goods, and information and communication technology.

"Even as Africa continues to face enormous challenges, even as too many Africans still endure poverty and conflict, hunger and disease, even as we work together to meet those challenges we cannot lose sight of the new Africa that is emerging," Mr. Obama said in his remarks at the daylong business forum. He noted the fast-growing African economy, growing middle class and young, energetic population that makes it ideal for a partnership.

Still, he noted, the amount of trade the U.S. conducts with Africa is only equal to the amount it does with Brazil, a single country.

"We have to do better, much better. I want Africans buying more American products, I want Americans buying more African products," he said.

Private companies have pledged $14 billion in investments for the construction, clean energy, banking and information technology sectors. The White House is expanding the Power Africa initiative to expand electricity in African homes with a combination of commitments from the private sector, World Bank, and government of Sweden. The U.S. government will also provide $7 billion in financing to promote U.S. exports to and investments in Africa.

Part of that includes money for the U.S. Export-Import Bank, an export credit agency that needs to be reauthorizes but has several enemies from conservatives in Congress.

Mr. Obama told the assembled business leaders, that they "can help make clear that it is critical to U.S. business."

The president is also slated to participate in a discussion with CEOs and government leaders, Commerce Secretary Penny Pritzker and former New York Mayor Michael Bloomberg. Big companies like GE, Marriott and IBM are making multi-million and even multi-billion financial commitments.

GE, for instance, will invest $2 billion to develop its supply chain, train employees and improve infrastructure and sustainability in Africa by 2018, the company announced Monday.

U.S. leaders have warned that American companies will pass up major economic opportunities if they don't get more involved in helping to strengthen Africa's growing middle class.

"We are missing the boat," former President Bill Clinton said Tuesday morning as he moderated the first panel of the summit. "This is a very important part of our future."

The U.S. has lagged in two-way trade in Africa in recent years and ceded its role as a leading trading partner to the European Union and China. Total African trade with the U.S. in 2013 amounted to $60 billion, versus more than $200 million for the European Union and $170 billion with China (which is up from just $10 billion in 2000), according to the Brookings Institution.

Bloomberg lauded the Obama administration for its focus on building economic ties in an interview on CBS News "Face the Nation" Sunday.

"There are great natural resources there, which China needs and America needs, as does Europe as well. But also, there's the potential for selling a lot of things there," Bloomberg said. "The scale is big, it's spread out...you're going to create a middle class there that's going to want an awful lot of the products and the next big cities are going to be in Africa."

Later this evening, the president will host a dinner at the White House for the heads of state and other government officials.

  • Rebecca Kaplan

    Rebecca Kaplan is a political reporter for CBSNews.com.