Unraveling Africa’s Insufficient Power with the Continents Abundant Energy Resources

Ironically, Sub-Saharan Africa (SSA) is richly endowed with both renewable and exhaustible energy resources yet the continent suffers from power shortages.  The fact is the continent’s energy resources tend to be concentrated in a handful of countries where physical and political barriers to trade make it difficult for countries to access centers of power supply and their economies are too small for  them to develop their own resources. For example, the Democratic Republic of Congo (DRC) alone accounts for about 40 percent of sub-Saharan Africa’s hydroelectric potential, although sources indicate that the Congo River has the potential to power a continent. Additionally, Ethiopia accounts for another 20 percent of the continents potential. However both countries are relatively far from the economic centers in southern, western, and northern Africa, and the multi-billion-dollar investments needed to exploit hydro potential are massive.  In addition, national economic and political considerations in the Africa for Africa models seemingly cannot be set in stone. 

For instance the multi-billion dollar Inga 3, the largest hydroelectric project in Africa, which would have been developed in the Congo River by the Western Power Corridor (Westcor) consortium consisting of Namibia, Angola, Botswana, South Africa and the DRC, was supposed to start generating electricity in DRC by 2012 for the participating countries. However the project is reported to have backfired when the DRC's National Electricity Society (SNEL), announced that Westcor would be dissolved.  Instead, the DRC government has opted for a proposal by BHP Billiton, the world's biggest mining company, to build a 2 500-megawatt hydropower plant in the country to support its proposed aluminum smelter.  The DRC government also expressed the view that it would be good for the DRC to retain more electricity for its own use. 

Currently, only 6% of DRC’s population has access to electricity and some NGOs have advocated that if projects are developed, the first priority should be to increase the rate of access to electricity to 60% of DRC’s population. Without such a national benefit from the development, some fear it would cause new civil unrest. They argue that lighting the rest of Africa while leaving most of DRC in the dark would be politically and morally unacceptable.

While national interests are important, the development of regional power pools in Africa is crucial to the development of abundant power resources.  Currently regional power pools have been formed in Central (CAPP), East  Africa (EAPP), Southern (SAPP), and West (WAPP) Africa and the pools are at very different stages of development, both technically and institutionally. For instance, the political process is most advanced in the WAPP, supported by political agreements at the head of state level through the ECOWAS. The pools, particularly the WAPP and SAPP, have facilitated significant cross-border exchanges of power and a number of countries, such as Botswana and Niger, rely on imported power while others, such as Nigeria and Mozambique, are major exporters of power. However, none of the pools are yet at the point where the arrangements are fully competitive.

A Look at Power Shortages in Sub Saharan Africa

According to the IMF Regional Economic Outlook on Africa 2008, Africa’s overstretched electricity systems have become exceedingly vulnerable to supply shocks and these acute electricity shortages have resulted in widespread outages and load shedding. As shown in the figure below, shortages of electricity in 2008 were caused by 4 main reasons: drought, conflict, structural issues and oil price shocks.

For instance, in recent years, when droughts reduced power in the hydro-dependent countries of East Africa, prolonged blackouts became commonplace. In countries like South Africa, plant outages for maintenance in a context of low reserve margins have also had serious consequences. Additionally, countries whose power infrastructure has been damaged by conflict have also suffered severe shortages. And finally, high petroleum prices have created enormous cost pressure for countries in West Africa, that depend on imported oil products for power generation.

An increasingly common response to the crisis has been short-term leases for emergency power generation by a handful of global operators. Though this capacity can be put in place within a few weeks, it is expensive. The costs of small-scale diesel units, for example, are typically about US$0.35/kwh. The equipment is typically leased for up to two years, after which it reverts back to the private provider. An estimated 700 megawatts (MW) of emergency generation are currently operating in sub-Saharan Africa which represents more than 20 percent of output capacity. The total price tag is substantial and ranges from 0.5 percent of GDP in Gabon to 4.3 percent in Sierra Leone.

Interestingly, this energy crises is a symptom of a deeper malaise, the cause of which needs to be understood in order to be addressed.  In this regard, I will discuss the four paradoxes highlighted in the report which shed light on the complex challenges that need to be addressed: abundant energy but little power; high prices but even higher costs; widespread but ineffective reform; and high expenditure yet inadequate financing

Africa's Acute Power Problems

According to the IMF Regional Economic Outlook Report of 2008 Sub-Saharan Africa (SSA) faces major infrastructure challenges in the power sector.  The report finds that SSA’s electricity infrastructure is the least developed, least accessible, least reliable, most expensive to operate, and the highest priced of any region in the world. 

For instance as stated in the Report, the entire generation capacity of the 48 countries of SSA, at 63 gigawatts (GW), is comparable to that of Spain. If South Africa is excluded, SSA’s generation capacity falls to 28 GW, about the same as Argentina (2008 figures).  Moreover, the region’s generating capacity has been stagnant for many years and the growth of the sector is barely half those in other developing countries. To make matters worse, as much as one-fourth of SSA’s plants are currently not in operating condition.

Additionally, rates of electrification in SSA are correspondingly low. About 24 percent of SSA’s population has access to electricity versus 40 percent in other low-income countries, and electrification is proceeding more slowly than in other low-income countries.  Furthermore, the region has a fraction of the consumption rates in other regions and, excluding South Africa, SSA’s consumption is only about 124 kilowatt hours (kwh) a year, less than one-tenth that of China.

On cost, although electricity tariffs in some SSA’s countries have been kept low, the cross-country average tariff is rather high at US$0.13 per kwh—about double those in other parts of the developing world and almost as high as in OECD countries. Nevertheless, the prices fail to cover costs and unreliable power supply further adds to the cost.

The issue of power outages is also of critical concern.  African manufacturing enterprises report power outages on an average of 56 days a year, costing firms 5–6 percent of revenues. That is why many firms operate their own diesel generators, at a cost of about US$0.40/kwh. In the informal sector, where firms rarely have the capital for backstop generation, lost revenues from power outages can be as high as 20 percent.

The issue of electricity is central to not only trade and investment but also crucial for advancement of social issues in SSA e.g. schools, hospitals and hence worthy of reform.

Impact of Transport on Landlocked Countries

At present, about one out of five countries in the world are landlocked and only three high-income economies out of 35 are landlocked. Of the 31 Land Locked Developing Countries (LLDC) in the world, 15 are in Africa. Being land locked significantly affects the GDP per capita of these countries. For instance, over the period 2003-05, GDP per capita of LLDCs was approximately 50% of the GDP per capita of transit developing countries and only about one quarter of GDP per capita of developing countries in general.

The main problem with regard to being landlocked is the geographical remoteness from the sea and transit dependence complicates the export and import processes.  As a result LLDCs trade less, grow more slowly than neighbouring coastal countries and for example countries like Burundi, Central African Republic and Mali spend an average of 15% of export earnings on transport and for some the cost can be as high as 50%.

According to World Bank Study, Improving Trade and Transport for Landlocked Developing Countries the cost of transporting a container from an LLDC to a port in a developed country is 20% higher than transporting from a coastal country.  The main causes of the higher costs are inadequate transit transport inter-modal connections, regulation and poor service.

The cost of importing from a LLDC is also rising and the Study also suggests that improving road infrastructure alone is not sufficient to eradicate inefficiency and high transport costs.  As indicated in previous posts in this Blog, the other main problems are associated with port infrastructure and the quality of port services which affect the cost and process of dispatching goods in and out of transit countries.

In addition,  it is estimated that manufacturers shipping from SSA pay nearly three times more in container handling charges at African ports than manufacturers shipping from Europe.   As shown in the above chart, in some SSA countries the cost of importing a standard-sized container is reportedly more than twice the world average. Added to these charges are the indirect costs associated with time delays at the port of entry and costs of transporting  goods to inland destinations and  in particular onward delivery to landlocked countries.

Shipping Connectivity in Africa

According to the International Maritime Organization (see list of IMO conventions), 90% of the world's trade is transported by sea and shipping is truly the lynchpin of the global economy. Without shipping, intercontinental trade, the bulk transport of raw materials and the import/export of affordable food and manufactured goods would simply not be possible.  Efficiency of shipping is also closely interlinked with ports and land transport services.  The world's major ports are located close to the main international shipping routes that transverse the east-west global axis and Africa's intra-regional liner shipping connections are largely determined by the shipping liner routes, connecting African countries with Europe, Asia and to a lesser extent the Americas. 

The main or busiest shipping route in Africa transits the Red Sea into the Suez Canal through the Mediterranean and out through the Strait of Gibraltar. Vessels along this route deliver goods mainly to and from Europe and Asia although in recent year intra-regional African trade in this region has been increasing. Generally however the connections within the continent are few and for example North Africa is not connected to East or Southern Africa and there are no shipping lines for instance between Kenya and Cote d' Ivoire.

By the same token, according to a Study by USITC titled Sub-Saharan Africa: Effects ofInfrastructure Conditions on ExportCompetitiveness, Third Annual Report about 12 shipping companies provide services between Mombasa and Dar-es-Salaam but neither has services to the Northern seabed of Africa.  Thus maritime trade between African countries on opposite coasts of the continent depends on transshipment services via Europe or South Africa.

Normally a transshipment operation to a third country means higher costs compared to direct port to services between two trading economies hence increasing the cost of intra-regional trade. Nonetheless, transshipment centers such as Djibouti, Senegal, Morocco promote south-south trade especially on routes where trade volumes are currently not large enough to justify direct port to port shipping service. 

Reforming Port Services in Africa

There are approximately 90 maritime ports in Africa which include coastal ports and those located on inland lakes and rivers. The top 10 ports in Sub Saharan Africa account for nearly three-quarters of the cargo transported to and from the region. Among the region’s largest and/or most active ports are Abidjan, Côte d’Ivoire, and Tema, Ghana, in West Africa; Dar es Salaam, Tanzania, and Mombasa, Kenya, in East Africa; and Durban, South Africa, and Maputo, Mozambique, in southern Africa.  Together, these six ports account for almost one-half of containerized cargo transiting SSA.  Among the region’s coastal ports, the South African Port of Durban is the largest in terms of annual throughput, and the next largest port is Mombasa, Kenya.

Nonetheless, the capacity of even the largest SSA ports to handle a rising volume of containerized cargo remains insufficient.   Firstly, by international standards, most SSA ports are small, even when compared with other ports in the developing world.  Secondly,  the physical infrastructure of most SSA ports is inadequate in part due to historical factors since many SSA ports were developed to accommodate the transport of specific types of raw materials.

Despite the relatively small size of the SSA maritime market, several ports have undergone recent reforms and are attracting new investment. Reforms are aimed primarily at improving the operational efficiency of ports, which historically have been hampered by inadequate infrastructure, poor management, and a lack of financial resources. Reform has largely been achieved through public-private partnerships, in which a private-sector entity is granted a concession to operate a port while the port remains under state ownership. In many cases, the private-sector entity also invests in port infrastructure and equipment. By 2000, 70 percent of SSA ports had some form of private-sector participation.  

Private Sector Management of Ports in SSA

Although most SSA ports are state owned, the majority of shipping firms serving the region’s ports are private-sector entities. While private-sector management of SSA ports, as well as investment in physical infrastructure, has led to modest improvements in port productivity, problems remain. In particular, the region’s maritime operations continue to be adversely affected by burdensome customs procedures, inadequate access to land transport networks and governance. 

However the primary constraints facing SSA ports—inefficient operations and lack of sufficient capacity—have yet to be fully resolved. As a result, freight rates to and from SSA remain substantially higher than in other parts of the world, reducing the region’s export competitiveness. As an example, a small container ship may potentially incur an operating cost of $43,000 for each day that it is delayed from docking at a port and to mitigate such costs, some shipping firms impose ‘vessel delay surcharges which in turn are passed on to importers.

However certain ports in the region have been successful in addressing capacity issues for containerized traffic by attracting outside investment in infrastructure and improving port management. For example, at the port of Mombasa, the Kenya Ports Authority has established dedicated berths for one of the area’s largest shipping firms and now permits cargo to be processed on a 24-hour basis. Ultimately, Mombasa and other SSA ports are increasingly serving as regional hubs or transshipment ports and are investing in infrastructure and managerial expertise to handle the growing containerized trade in the continent.  Trade in services WTO negotiations in maritime services to liberalize the sector include  three main areas: access to and use of port facilities; auxiliary services; and ocean transport. Under the WTO/W120 list of services sectors, maritime services negotiations include the following sub-sectors: 

a. Passenger transportation
b. Freight transportation
c. Rental of vessels with crew
d. Maintenance and repair of vessels
e. Pushing and towing services 

f. Supporting services for maritime transport

Maritime Transport in Africa and European Shipping Lines

Over 90 percent of international trade between Sub Saharan Africa and foreign countries is conducted via maritime transport and most shipping companies operating in the region are European.   The region accounts for 2–3 percent of global  merchandise trade by value, and slightly more than 2 percent of worldwide maritime cargo originates in or is destined for an SSA port.  

Approximately 87 percent of the total volume of cargo exported from SSA ports is crude petroleum, with the remaining 13 percent divided evenly between minerals and metals (primarily bauxite and iron ore) and general cargo (including agricultural goods and textiles and apparel). By contrast, 90 percent of maritime cargo destined for SSA ports consists of general cargo. Crude petroleum is transported by tankers, minerals and metals are transported by break bulk carriers, and general cargo is transported by both break bulk carriers and container ships.

Large international shipping firms such as Danish-based Maersk and French-based CMACGM account for the bulk of maritime transport service between SSA and non-SSA markets.    In particular, these two firms transport the majority of containerized cargo between SSA and Europe, the largest market for SSA exports.  Other foreign-based shipping firms that have a substantial presence in the region include the German firm Hapag-Lloyd, the Italian firm Grimaldi Lines, and the Swiss firm Mediterranean Shipping Co.

In recent years, the maritime transport market in SSA has become more concentrated, as many large shipping firms have been absorbed through corporate consolidations. For example, in 2005, Maersk purchased the liner shipping business of British-based P&O Nedlloyd, and Hapag-Lloyd merged its operations with the Canadian firm CP Ships. Earlier, in 1999, Maersk also purchased the South African shipping firm Safmarine, one of the largest regional shipping lines providing service between SSA and foreign countries.

For a recent review of maritime transport see here.

Inter-modal Linkages in Africa's Transport Sector

Intermodal transitions (in which freight is transferred from trucks to trains, trains to ships, or other modal combinations) is particularly time consuming and inefficient throughout Sub Saharan Africa (SSA).  In many cases, intermodal links are the main bottleneck for freight movement and for many SSA countries, the freight forwarding industry is entirely reliant on manual loading and unloading for intermodal transitions. This is in stark contrast to more developed economies.   

For example, improving intermodal links was a major factor in the export-driven development of Southeast Asian countries. Starting in the 1980s, these countries restructured their transport sectors into multimodal supply chain management sectors that took advantage of containerization and the internationalization of production.   Improvements in intermodal links in Southeast Asia were correlated with increased trade flows (especially of intermediate goods), increased integration into global production networks, and growth in domestic manufacturing sectors.

Intermodal connections can facilitate the vertical integration of commodity chains since logistics sectors typically evolve from a three-stage system of transporting commodities (from rural hinterlands to marketplaces, from marketplaces to ports, and then from ports to overseas markets) to integrated door-to-door supply chains;  a highly efficient system.  

Logistics and intermodal transitions are clearly areas where African countries need to enhance their transport sector efficiencies further.

Impact of Overland Transport on Intra regional Trade in Africa

A recent USITC Study titled Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report found that intra-regional trade as a percentage of total trade in SSA averaged only 8 percent, compared to 44 percent in East Asia.  The fact is that there are intra-regional trade opportunities among African countries, especially for countries that share a border and in fact neighboring countries often have integrated transport networks and bilateral transit or customs agreements. However, the poor quality, high cost and overall port-oriented design of land transport infrastructure in SSA inhibits intra-regional trade.   

As an example, there is no overland trade between South Africa and Nigeria, the two largest economies in Sub Saharan Africa and as shown in the figure (source: Adapted by USITC from OECD, Africa Economic Outlook 2008) there is little overland connectivity between West and Southern Africa. 

However improvements in land transport infrastructure will not necessarily lower transport prices in regions where regulations render logistics markets uncompetitive. Transport firms capable of exercising monopolistic power may still maintain high transport prices and avoid passing along savings to end-users. For instance where market regulation is strong, there are high barriers to market entry, and freight bureaus and transport associations can have great influence, resulting in high transport prices. As a consequence, freight transport services in Africa can be more expensive than those in developed countries and similarly, the cost of intra regional trade would be high.

While improved road and rail links and infrastructure may increase trade between SSA countries by integrating markets and facilitating specialization, intra-SSA trade effects may also be limited by the fact that many SSA countries produce similar commodities (agriculture, oil and minerals), while demand for imports tends to be for manufactured goods.  Hence there are limited complementarities between regional economies in SSA, and in the absence of changes in the trade profiles of SSA countries, there may be little natural momentum to spear dramatic changes in infrastructure investment.

Impact of Infrastructure Services on Sub Saharan Africa's Export Competitiveness

According to a World Bank Study poor infrastructure conditions increase production costs, economic distance (the time and cost of transporting goods) business uncertainty, and undermine Sub Saharan Africa’s (SSA) export competitiveness. Generally, roads in SSA are poorly maintained, some unpaved and truck fleets generally consist of aging, fuel-inefficient vehicles that are often overloaded and contribute to further road degradation. Poor roads and truck breakdowns result in the slow movement of goods, considerable damage to goods in transit (particularly to perishable goods), and high shipping costs relative to other areas of the world.

Rail networks in SSA are also limited and generally even less reliable than trucks, increasing the dependence on roads to transport goods. “Soft” infrastructure constraints, such as excessive check points, burdensome administrative procedures, and inefficient processing at border crossings, often cause longer delays than poor road conditions. These delays increase economic distance and often reduce product quality, particularly for perishable goods, leading to higher rejection rates, higher production costs, and lower income for producers.  

For instance,  a USITC Study titled Sub-Saharan Africa: Effects of Infrastructure Conditions on Export Competitiveness, Third Annual Report found that some SSA coffee exporters take almost 42 days to export (excluding maritime travel) due to poor roads, long distances to the ports, roadblocks and customs delays while Latin American exporters take only 14 days to export- excluding maritime travel.  This difference in competitiveness means that the SSA coffee farmers are facing a significant tariff equivalent barrier to exports when compared to Latin Americans.

Given the importance of these issues, I will be focusing on the impact of infrastructure services on Africa’s export competitiveness for the next few posts.

President's Export Council: Is this a useful model for Africa?

President Barack Obama recently named Boeing Chairman, President and Chief Executive Jim McNerney as chairman of the Presidents Export Council (PEC) with Xerox Chief Executive Ursula Burns as Vice Chairwoman of the Council and has 8 private sector members. The PEC was created to advise the President on exports, trade, promotion and other matters relevant to exports and was first created in 1973 by President Nixon according to the U.S. Department of Commerce Charter of the Presidents Export Council.

Originally, the PEC consisted of only 20 private sector members drawn from business and industry, mostly CEO's of major U.S. companies. Eight of the members were chosen "without regard to geographic considerations." Twelve members were selected to provide appropriate regional representation. Six years later, in 1979, President Jimmy Carter reconstituted and expanded the PEC to the current roster of 48 members which was extended to include leaders of labor and agriculture communities, members of Congress, and members of the executive branch. 

The PEC reports its advice through the Secretary of Commerce. Members serve "at the pleasure of the President" with no set term of office and thus, a change in administrations would bring a change in the Council. The PEC’s activities and operations are subject to the Federal Advisory Committee Act and the full council meets at least twice a year with no compensation to members for their services.  The PEC maintains subcommittees according to the council’s interests, and membership in those subordinate committees is drawn from the council’s membership. The PEC in the past has maintained 5 subcommittees as follows:

1. Trade Promotion and Negotiations

2. Technology and Competitiveness

3. Services.

4. Corporate Stewardship

5. Export Administration

When I first heard about the PEC, I wondered whether African Heads of State could benefit from similar Advisory bodies in order to address key economic challenges.  For instance, the PEC has had an impact on US negotiating positions and made significant input in the National Export Strategy.  During the George Bush administration, the growth of the US trade deficit by over 50% was a key issue of concern which the PEC used to influence US negotiations in the WTO Doha round and the regional context.  President Obama’s administration is currently faced with even more dire economic challenges including the recent loss of 8 million American jobs, which will undoubtedly influence the incoming PEC’s work. 

In Africa, this approach could be used to address issues pertaining to competitiveness, agriculture, investment etc. in addition to exports. 

Obama's National Export Initiative 2010

At the recent State of the Union address, US President B. Obama announced his goal of doubling America’s exports over the next five years -– an increase that will support 2 million American jobs. Following this, he issued an Executive Order -The National Export Initiative (NEI), a federal initiative to improve conditions that directly affect the private sector's ability to export.  Currently the US imports from Africa under AGOA, more than it exports to the continent.  The Executive Order will result in the creation of an Export Promotion Cabinet to develop and implement the initiative.  

The NEI is replicated below:

For Immediate Release

March 11, 2010

Executive Order - National Export Initiative

EXECUTIVE ORDER

- - - - - - -

NATIONAL EXPORT INITIATIVE

By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Export Enhancement Act of 1992, Public Law 102-429, 106 Stat. 2186, and section 301 of title 3, United States Code, in order to enhance and coordinate Federal efforts to facilitate the creation of jobs in the United States through the promotion of exports, and to ensure the effective use of Federal resources in support of these goals, it is hereby ordered as follows:

Section 1. Policy. The economic and financial crisis has led to the loss of millions of U.S. jobs, and while the economy is beginning to show signs of recovery, millions of Americans remain unemployed or underemployed. Creating jobs in the United States and ensuring a return to sustainable economic growth is the top priority for my Administration. A critical component of stimulating economic growth in the United States is ensuring that U.S. businesses can actively participate in international markets by increasing their exports of goods, services, and agricultural products. Improved export performance will, in turn, create good high-paying jobs.

The National Export Initiative (NEI) shall be an Administration initiative to improve conditions that directly affect the private sector's ability to export. The NEI will help meet my Administration's goal of doubling exports over the next 5 years by working to remove trade barriers abroad, by helping firms -- especially small businesses -- overcome the hurdles to entering new export markets, by assisting with financing, and in general by pursuing a Government-wide approach to export advocacy abroad, among other steps.

Sec. 2. Export Promotion Cabinet. There is established an Export Promotion Cabinet to develop and coordinate the implementation of the NEI. The Export Promotion Cabinet shall consist of:

(a) the Secretary of State;

(b) the Secretary of the Treasury;

(c) the Secretary of Agriculture;

(d) the Secretary of Commerce;

(e) the Secretary of Labor;

(f) the Director of the Office of Management and Budget;

(g) the United States Trade Representative;

(h) the Assistant to the President for Economic Policy;

(i) the National Security Advisor;

(j) the Chair of the Council of Economic Advisers;

(k) the President of the Export-Import Bank of the United States;

(l) the Administrator of the Small Business Administration;

(m) the President of the Overseas Private Investment Corporation;

(n) the Director of the United States Trade and Development Agency; and

(o) the heads of other executive branch departments, agencies, and offices as the President may, from time to time, designate.

The Export Promotion Cabinet shall meet periodically and report to the President on the progress of the NEI. A member of the Export Promotion Cabinet may designate, to perform the NEI-related functions of that member, a senior official from the member's department or agency who is a full-time officer or employee. The Export Promotion Cabinet may also establish subgroups consisting of its members or their designees, and, as appropriate, representatives of other departments and agencies. The Export Promotion Cabinet shall coordinate with the Trade Promotion Coordinating Committee (TPCC), established by Executive Order 12870 of September 30, 1993.

Sec. 3. National Export Initiative. The NEI shall address the following:

(a) Exports by Small and Medium-Sized Enterprises (SMEs). Members of the Export Promotion Cabinet shall develop programs, in consultation with the TPCC, designed to enhance export assistance to SMEs, including programs that improve information and other technical assistance to first-time exporters and assist current exporters in identifying new export opportunities in international markets.

(b) Federal Export Assistance. Members of the Export Promotion Cabinet, in consultation with the TPCC, shall promote Federal resources currently available to assist exports by U.S. companies.

(c) Trade Missions. The Secretary of Commerce, in consultation with the TPCC and, to the extent possible, with State and local government officials and the private sector, shall ensure that U.S. Government-led trade missions effectively promote exports by U.S. companies.

(d) Commercial Advocacy. Members of the Export Promotion Cabinet, in consultation with other departments and agencies and in coordination with the Advocacy Center at the Department of Commerce, shall take steps to ensure that the Federal Government's commercial advocacy effectively promotes exports by U.S. companies.

(e) Increasing Export Credit. The President of the Export-Import Bank, in consultation with other members of the Export Promotion Cabinet, shall take steps to increase the availability of credit to SMEs.

(f) Macroeconomic Rebalancing. The Secretary of the Treasury, in consultation with other members of the Export Promotion Cabinet, shall promote balanced and strong growth in the global economy through the G20 Financial Ministers' process or other appropriate mechanisms.

(g) Reducing Barriers to Trade. The United States Trade Representative, in consultation with other members of the Export Promotion Cabinet, shall take steps to improve market access overseas for our manufacturers, farmers, and service providers by actively opening new markets, reducing significant trade barriers, and robustly enforcing our trade agreements.

(h) Export Promotion of Services. Members of the Export Promotion Cabinet shall develop a framework for promoting services trade, including the necessary policy and export promotion tools.

Sec. 4. Report to the President. Not later than 180 days after the date of this order, the Export Promotion Cabinet, through the TPCC, shall provide the President a comprehensive plan to carry out the goals of the NEI. The Chairman of the TPCC shall set forth the steps taken to implement this plan in the annual report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Foreign Affairs of the House of Representatives required by the Export Enhancement Act of 1992, Public Law 102-249, 106 Stat. 2186, and Executive Order 12870, as amended.

Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:

(i) authority granted by law to an executive department, agency, or the head thereof, or the status of that department or agency within the Federal Government; or

(ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

BARACK OBAMA

THE WHITE HOUSE,

March 11, 2010.

Africa's Main Trading Partners

Africa’s Exports

Sub-Saharan Africa’s total merchandise exports were $244.6 billion in 2007, a 17.2 percent increase, approximately the same increase as in 2006. However these exports are highly concentrated since in 2007, South Africa and Nigeria accounted for 50.2 percent of Sub-Saharan Africa’s total exports.

From an individual country perspective, the United States is Africa’s largest single country market, purchasing 28.4 percent of the region’s exports in 2007. China came in second at 13.4 percent, and the United Kingdom was third at 5.6 percent.  From a regional perspective however, the EU is the largest export market and the region purchased 31.4 percent of Sub-Saharan Africa’s exports, down from 32.1 percent in 2006. 

Africa’s Imports

Sub-Saharan Africa’s total merchandise imports continued to increase in 2007, growing 25.6 percent to $269.2 billion, compared to slightly lower growth of 24.1 percent in 2006. Imports are growing faster than exports and once again, South Africa and Nigeria accounted for almost half of Sub-Saharan Africa’s total imports with a 46.4 percent share. In 2007, South Africa’s imports increased by 25.9 percent to $85.6 billion, about the same growth as in 2006.  Meanwhile, Nigeria’s imports increased by 33.7 percent to $39.4 billion, which was higher than the 20.3 percent growth in 2006.

Based on a review of some of the major suppliers to Sub- Saharan Africa, no single sector appears to account for the majority of the growth in Sub- Saharan African imports. Instead, the imports appear to be spread over a range of sectors, including a variety of electrical and other machinery, refined oil, telecommunications equipment, vehicles, aircraft, iron and steel products, pharmaceutical products, medical equipment, apparel, footwear, ocean vessels, and wheat

In 2007, China continued to be the largest individual country exporter to Sub-Saharan Africa with a growing market share of 9.8 percent and $26.5 billion in exports to the region. China’s exports to the region continued to grow rapidly by 39.4 percent from 2006. Increased shipments of electrical and other machinery, vehicles (mainly motorcycles and trucks), woven fabrics, iron and steel products, woven and knit apparel, and low-end footwear comprised the largest share of China’s growth in shipments to Sub-Saharan Africa. China, however, increased its share of African exports by almost one percentage point to a 13.4 percent share.

With the exception of the Netherlands which posted an increase in market share in Sub-Saharan Africa in 2007, the market share of Africa’s other major trading partners declined from 2006 to 2007.  For instance, the market share in Sub-Saharan Africa of the EU as a whole also decreased to 27.8 percent. The U.S. market share in Sub-Saharan Africa fell slightly in 2007 to 5.3 percent, with $14.4 billion in exports to the region.

South Africa’s share of the African market declined slightly to a 3.3 percent share from a 3.4 percent share in 2006. South Africa exported more than Japan, Netherlands, Italy, and Spain to Sub-Saharan Africa, with exports to the region of $9.0 billion in 2007, growing by 23.2 percent from 2006. 

Of Africa’s trading partners represented in the chart above, South Africa imports the least from African countries.