President Barack Obama hopes to spark increased American private investment in Africa during the final leg of his three-country journey, meeting with East African leaders alongside American top executives in Tanzania.
The U.S. has seen its percentage of investment drop in Africa as countries like China, India and Brazil increase their economic clout in the region, but experts say Obama's trip and emphasis on business opportunities could help bolster America's presence.
"We shouldn't view the participation of a country like China or Brazil in Africa as a bad thing," Obama said to reporters traveling from Senegal to South Africa. "It should be a signal to us, though, that there's great opportunity there and that we cannot afford to be left on the sidelines because we're still stuck with old stereotypes about what Africa's future is going to be."
Stephen Hayes, president and CEO of the Corporate Council on Africa and an opinion writer for U.S. News & World Report, says Obama's efforts will help forge a better public-private relationship that companies are seeking when it comes to expansion into the continent.
"One of the biggest problems we've got – and one of the reasons why China and India and the other countries are doing a lot better right now – is there's more coherency between public and private cooperation towards Africa," he says. "Nevertheless, there hasn't been a lot of communication between the private sector and the public sector in the U.S. as it regards investment in Africa."
It's also hard for American companies to get loans from U.S. banks to invest there, Hayes says.
Obama said he has been working on pitching Africa as a more stable region than in the past in hopes of wooing private investment.
"This is a message I'm delivering consistently – is ensure that there's stability and good governance so that American companies can reduce some of those risks that have nothing to do with business and have to do with will they be able to get their profits out, will they have to pay a bribe, will they have to find ways to negotiate with bureaucracies endlessly," he said.
Hayes admitted other factors have been inhibiting U.S. investment in Africa, including the lack of basic infrastructure like electrical power.
"It's still a difficult place, no doubt about it," he says. "No country in Africa, including South Africa, is meeting its current power needs and without power you can't expect a lot of investment right away."
That's meant that 75 percent of American investment in Africa has been in energy, Hayes says, but that is changing.
"We're beginning to see the IT companies like Microsoft, Oracle and IBM start to enter the African market much more aggressively," he says. "The consumer products groups – Colgate, Palmolive, Proctor and Gamble and Wal-Mart – are all starting take a more aggressive stand and so are more of the agribusiness companies.
Greater investment will bring a boon to the American economy as well as locally in Africa, Hayes adds.
"We need to do it badly for the sake of our own economy and for the long term relationships with African countries or any countries will necessarily gravitate to those countries that are investing in them," he says.
It's an issue that's also building bipartisan momentum on Capitol Hill, Hayes adds, calling the president's trip important if not a little delayed in coming.
"It would have been more significant four years ago, but it's better late than never," he says. "[But] it is significant, it's already bringing attention to Africa and the economic opportunities for the American business."