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Updated Feb 3, 2020

If the tens of billions being invested in Africa by developed countries like Japan, Russia, China, and the European Union indicate growing confidence in the continent’s business potential, then the lack of investment by American companies would seem to indicate the opposite. Much of this hesitancy comes from a perception of greater risk for investors, a position not entirely baseless, as only 14 of Africa’s 54 countries scored 50 or above out of 100 in Transparency International’s Corruption Perceptions Index. What is left unsaid is that these perceptions often don’t reflect the realities on the ground.

A variety of international watchdog reports indicate that despite the intransigent nature of the myriad problems plaguing Africa, efforts to improve governance have been largely positive. The Ibrahim Index of African Governance has found that three out of four African citizens live in a country where governance has improved over the past 10 years. Elections are being held much more frequently, and Africans from Algeria to Guinea and across the Sahel to Sudan have taken to the streets demanding more accountable representation and an end to entrenched corrupt political elites.

Analysts at the Brookings Institution, an American research group, argue that given this demonstrated desire by Africans for fairer governance, the United States should invest significantly more in improving transparency, free and fair elections, and respect for the rule of law. 

Of the total aid Africa receives from the US, it’s estimated that only 1.78 percent goes toward democracy programs, such as elections and human rights organizations. This works out to about US$5 million per country. Anti-corruption programs are even worse funded.

Channeling more funds toward programs and institutions pushing for pro-democratic reforms will have a twofold benefit: for Africans, it will significantly help improve their quality of life, and it will help to establish a more transparent investment environment in Africa for American businesses. 

China and Russia have already poured billions into building up their capital on the continent, aided in part by a lack of concern for how African states govern themselves. In some instances, they even benefit from more opaque, corrupt leadership. 

Getting ahead will require a serious commitment by the United States to put into action its support for liberal democracy, which will give it a more level playing field against China and other competitors in terms of investment.

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