[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                   UNDERSTANDING THE AFRICAN CONTINENTAL 
                    FREE TRADE AREA AND HOW THE U.S. CAN 
                    PROMOTE ITS SUCCESS

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON AFRICA, GLOBAL HEALTH,
                        AND GLOBAL HUMAN RIGHTS

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 27, 2022

                               __________

                           Serial No. 117-143

                               __________

        Printed for the use of the Committee on Foreign Affairs
        
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Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov,
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                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
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-----------------------------------------------------------------------------------                          
                       
                      COMMITTEE ON FOREIGN AFFAIRS

                  GREGORY W. MEEKS, New York, Chairman

BRAD SHERMAN, California              MICHAEL T. McCAUL, Texas, Ranking 
ALBIO SIRES, New Jersey                  Member
GERALD E. CONNOLLY, Virginia	      CHRISTOPHER H. SMITH, New Jersey
THEODORE E. DEUTCH, Florida	      STEVE CHABOT, Ohio
KAREN BASS, California		      SCOTT PERRY, Pennsylvania
WILLIAM KEATING, Massachusetts	      DARRELL ISSA, California
DAVID CICILLINE, Rhode Island	      ADAM KINZINGER, Illinois
AMI BERA, California		      LEE ZELDIN, New York
JOAQUIN CASTRO, Texas	              ANN WAGNER, Missouri
DINA TITUS, Nevada		      BRIAN MAST, Florida
TED LIEU, California		      BRIAN FITZPATRICK, Pennsylvania
SUSAN WILD, Pennsylvania	      KEN BUCK, Colorado
DEAN PHILLIPS, Minnesota	      TIM BURCHETT, Tennessee
ILHAN OMAR, Minnesota		      MARK GREEN, Tennessee
COLIN ALLRED, Texas		      ANDY BARR, Kentucky
ANDY LEVIN, Michigan		      GREG STEUBE, Florida
ABIGAIL SPANBERGER, Virginia	      DAN MEUSER, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania	      AUGUST PFLUGER, Texas
TOM MALINOWSKI, New Jersey	      PETER MEIJER, Michigan
ANDY KIM, New Jersey	              NICOLE MALLIOTAKIS, New York
SARA JACOBS, California		      RONNY JACKSON, Texas
KATHY MANNING, North Carolina	      YOUNG KIM, California
JIM COSTA, California		      MARIA ELVIRA SALAZAR, Florida
JUAN VARGAS, California		      JOE WILSON, South Carolina
VICENTE GONZALEZ, Texas		      
BRAD SCHNEIDER, Illinois

                    Jason Steinbaum, Staff Director
               Brendan Shields, Republican Staff Director
                                 ------                                

     Subcommittee on Africa, Global Health, and Global Human Rights

                     KAREN BASS, California, Chair

DEAN PHILLIPS, Minnesota             CHRISTOPHER SMITH, New Jersey, 
ILHAN OMAR, Minnesota                    Ranking Member
AMI BERA, California                 DARRELL ISSA, California
SUSAN WILD, Pennsylvania             GREG STEUBE, Florida
TOM MALINOWSKI, New Jersey           DAN MEUSER, Pennsylvania
SARA JACOBS, California              YOUNG KIM, California
DAVID CICILLINE, Rhode Island        RONNY JACKSON, Texas
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mene, His Excellency, Wamkele, Secretary General African 
  Continental Free Trade Area Secretariat........................    74
Mwencha, Ambassador Erastus, Chairman, Equity Bank...............    26
Signe, Landry, Ph.D., Senior Fellow, Brookings...................    34
Liser, Florizelle, President and CEO, Corporate Council on Africa    55

                                APPENDIX

Hearing Notice...................................................    74
Hearing Minutes..................................................    75
Hearing Attendance...............................................    76

                    REMARKS FROM REPRESENTATIVE BASS

Remarks from Representative Bass.................................    77

             ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD

Additional mateirals submitted for the record....................    83

 
UNDERSTANDING THE AFRICAN CONTINENTAL FREE TRADE AREA AND HOW THE U.S. 
                        CAN PROMOTE ITS SUCCESS

                       Wednesday, April 27, 2022

                          House of Representatives,
 Subcommittee on Africa, Global Health, and Global 
                                      Human Rights,
                      Committee on Foreign Affairs,
                                                    Washington, DC.

    The subcommittee met, pursuant to notice, at 11:05 a.m., 
via Webex, Hon. Karen Bass [chairwoman of the subcommittee] 
presiding.
    Ms. Bass. The Subcommittee on Africa, Global Health, and 
Global Human Rights will come to order.
    Without objection, the Chair is authorized to declare a 
recess of the Subcommittee at any point, and all members will 
have 5 days to submit statements and submit materials and 
questions for the record, subject to the length limitation in 
the rules.
    To insert something into the record, please have your staff 
email the previously mentioned address or contact full 
Committee staff.
    As a reminder to members, please keep your video function 
on at all times, even when you are not recognized by the Chair. 
Members are responsible for muting and unmuting themselves, and 
please remember to mute yourself after you finish speaking. 
Consistent with H.Res. 965 and the accompanying regulations, 
staff will only mute members and witnesses as appropriate when 
they are not under recognition, to eliminate background noise.
    I see that we have a quorum and will now recognize myself 
for opening remarks.
    Pursuant to notice we are holding a hearing on 
understanding the African Continental Free Trader Area and how 
the U.S. can promote its success. I hope that we can use this 
discussion to examine the origins of the Continental Free Trade 
Agreement, as well as its goals and actualization on the 
continent.
    This hearing is an opportunity for members to identify ways 
U.S. foreign assistance and trade policy can be used most 
effectively to advance the agenda set by the African Union and 
African leaders.
    I would like to begin first by thanking our witnesses, the 
Honorable Mene, the Secretary General of the AfCFTA; Ambassador 
Mwencha, Chairman of the Equity Bank; Dr. Landry Signe, a 
Brookings Senior Fellow focused on Africa; and Ms. Florie 
Liser, President and CEO of the Corporate Council on Africa. I 
look forward to hearing your testimony and discussing 
meaningful and viable steps the U.S. should take to deepen our 
trade and investment partnership with Africa.
    This hearing is exactly the discussion that I'm hoping to 
have as it focuses on shifting the paradigm of U.S.-Africa 
policy from humanitarian assistance and crises, both of which 
are essential but are not the only discussions we should have.
    Building, supporting, and nurturing strong partnerships 
with the continent as it moves toward self-reliance, regional 
integration, and better access to quality education, care, and 
jobs, all while creating greater trade and communication 
linkages to other African nations, which will also improve 
trade dynamics with the rest of the world.
    This shift will create a continent that showcases 
diversified exports, expanded manufacturing in export 
industries, greater integration into the global supply chain, 
with higher value inputs that capitalizes upon its innovation 
and inherent advantages to strengthen the continent, its 
nation-States, and its global partnerships.
    The Continental Free Trade Area, now ratified by 54 of 55 
States, was designed by the African Union to economically unify 
African States for the purposes of shared economic development 
progress.
    As we know, the U.S. and the AU enjoy a strong relationship 
with a history of cooperation and partnership. As the first 
non-African country to establish a diplomatic mission to AU in 
1906, the United States has continued to work with the AU 
toward shared diplomatic, economic, and security goals.
    Promoting the free trade area is just another level of 
support to the AU, and should be the focus of U.S. assistance 
and trade policy to deepen engagement that will improve the 
quality of life of all Africans while growing financial markets 
and jobs for U.S. businesses.
    According to the CRS document, however, our investment in 
supporting the African Continental Free Trade Area is much 
smaller than the EU or China. And so I would like to hear from 
witnesses where our investments should be increased and what 
areas. We have seen success in areas of economic growth and 
trade historically through AGOA, Power Africa, Feed the Future, 
and the U.S. International Development Finance Corporation.
    AGOA, the landmark legislation for trade between Africa and 
the U.S., has bolstered trade, economic growth, and relations 
with the U.S. in sub-Saharan Africa for over 20 years. It's my 
contention that re-authorizing AGOA with the appropriate 
amendments and resources is one of the best efforts the U.S. 
can lend to the success of the free trade area.
    In addition, the U.S. must look at other means of support, 
such as industry advisory boards and funds for investment 
institutions. I think it would be meaningful for the DFC and 
the Secretariat to discuss ways forward to improve the trade 
initiatives on the continent and would like to hear your 
thoughts as well.
    DFC's work on the continent amplifies investments in 
critical sectors, including education, power, growing small and 
medium enterprises in agriculture. However, I believe a 
strategic relationship with the Secretariat could rapidly 
facilitate inter--intra-continental trade agreements in a more 
practical sense, such as digitalizing a border crossing and 
standardized customs procedures.
    We face a critical time when the world is working 
collectively to overcome the COVID pandemic and the impacts of 
Russians--in Russia's invasion of the Ukraine. This is an 
opportunity to promote continental international trade of 
African commodities, goods, and services that if managed 
properly can lead to a greater participation in global markets 
and sustainable social economic advancement across the 
continent.
    It's in the--it's in the United States' national and 
economic security interests to support the free trade area 
through technical, financial, and other foreign assistance. I 
look forward to witness testimony that offers recommendations 
on the best strategies to support the agreement, whether it be 
through improving AGOA, or other methods to move the U.S.-
Africa relationship forward.
    I now recognize the ranking member for the purpose of 
making his opening statement.
    I believe that the ranking member is going to be joining us 
in a minute, so I will move to introduce our first witness. And 
then before the witnesses finish, if the ranking member comes 
in, we will give him time to do his opening statement.
    His Excellency Mene was elected by the 33d Ordinary Session 
of the Assembly of Heads of States and Governments of the 
African Union to the position of Secretary General of the 
African Continental Free Trade Area Secretariat.
    Prior to being elected, Secretary General Mene served as 
Chief Director of Africa Economic Relations and the Director of 
International Trade Law and Investment Law at the Department of 
Trade and Industry of South Africa.
    Next we have Ambassador Mwencha. Starting as one of the 
first employees as the then-preferential trade area, the 
Ambassador went on to serve as the Secretary General of the 
Common Market for Eastern and Southern Africa. In that role, he 
launched Africa's first free trade area and the African Trade 
Insurance Agency, a multilateral investment agency.
    After COMESA, the Ambassador was elected Deputy Chairperson 
of the African Union Commission and was the architect of the 
African Continental Free Trade Area. Since leaving the AU, he 
now concurrently serves as Chairman of the Equity Bank and 
TradeMark East Africa.
    Dr. Landry Signe is a leading professor and practitioner 
who has won over 70 prestigious awards and distinctions locally 
for his academic, policy, business, and leadership 
accomplishments. He has received the fastest reported tenure 
and promotion to the highest rank of full professor in the 
history of the U.S. universities in his discipline.
    He is the Managing Director and professor at the 
Thunderbird School of Global Management, Senior Fellow at the 
Brookings Institution, Distinguished Fellow at Stanford 
University, and a member of the World Economic Forum's Regional 
Action Group for Africa.
    And our final witness is Ms. Florie Liser. She is the 
President and CEO of the Corporate Council on Africa. She 
brings expertise and an extensive network on trade in Africa, 
along with a strong track record of working with the private 
sector to translate policy into action. She is the first woman 
to lead the Council since its founding in 1993.
    Ms. Liser joined CCA from the Office of the U.S. Trade 
Representative, where she was the Assistant U.S. Trade 
Representative for Africa since 2003, and was absolutely 
essential to the re-authorization of AGOA.
    We appreciate all of you being here today and look forward 
to your testimony. Your written statements will appear in the 
hearing record. And under Committee Rule 6, each witness should 
limit your presentation to a 5-minute summary of your written 
statement.
    And before the first witness testifies, I'm notified that 
the ranking member has joined us. So let me take a moment for 
his opening statement, and then we will go directly into your 
testimony.
    Mr. Smith. Is Mr. Smith with us?
    OK, why do not we go directly into our testimony from the 
Secretariat.

 STATEMENT OF HIS EXCELLENCY, WAMKELE MENE, SECRETARY GENERAL 
        AFRICAN CONTINENTAL FREE TRADE AREA SECRETARIAT

    Mr. Mene. Well, thank you very much, thank you very much, 
Chair Bass. It is a pleasure for me to join you today, and 
along with the fellow witnesses.
    It's a very important day for us because this is an 
expression, at least to me it expresses the interest of the 
United States in the work that we are doing to integrate our 
market, to liberalize trade on the African continent, and to 
make sure that, as you said in your opening statement, that we 
see economic prosperity.
    We submitted our testimony, but in accordance with your 
instructions, I will be--I will provide an overview, a summary 
of that testimony.
    The first thing I should say is to acknowledge that 
although we today have 42 countries that have ratified the 
agreement that establishes the AfCFTA, and only one African 
country has not yet signed the agreement, all of this may 
appear as if it happened in a relatively short space of time, 
which it did.
    But we will stand on the shoulders of people like 
Ambassador Mwencha; the former Chairperson of the African Union 
Commission, Madame Dlamini-Zuma; and others who really pushed 
very, very hard in the early stages to make sure that what 
appears to have been very, very rapid progress, that actually 
it is built on very, very solid ground.
    We have a trade agreement that is comprehensive in scope, 
that is very, very ambitious, a high-level ambition agreement. 
It includes trade in goods, trade in services, a protocol on 
dispute settlement, a protocol on digital trade, investment 
protection, competition policy, what in the U.S. I suppose you 
refer to as antitrust. As well as more importantly a protocol 
on women and youth in trade to ensure inclusivity as we trade 
amongst ourselves.
    You may be aware that the statistics that we have today are 
not encouraging. Eighteen percent intra-Africa trade, a 
fragmentation of markets and throughout our vast continents. 
And of course, in many cases smallness of national economies.
    However, there's a very, very unique opportunity through 
the AfCFTA to change all of that, to change the character of 
Africa's economy by leveraging on this market of 1.3 billion 
people with a combined GDP today of US$3.5 trillion, projected 
by the year 2035 to be close to US$7 trillion. That is consumer 
spending as well as business spending.
    And so the level of ambition is very high. That is why we 
have identified these core areas of Africa's economy to make 
sure that we integrate, to make sure that we have a single set 
of rules for trade and investment, and to make sure that we 
position the African continent for competitiveness, not only 
regionally, but for competitiveness globally.
    We are now at the very early stages of implementing this 
agreement. We have agreed on 88 percent of rules of origin in 
the area of trade in goods, which of course is critical. This 
is the nuts and bolts of any trade agreement are the rules of 
origin.
    So if you think about it this way, of over 5,000 traded 
products in Africa, we've reached a consensus on a single set 
for these rules of origin on 88 percent of the products that 
are traded.
    We have also operationalized the dispute settlement 
protocol, which is a very important protocol to send a signal 
not only to foreign investors but also to African investors, 
exporters, and traders to send a very strong signal that we are 
committed to resolving trade investment disputes, resolving 
them through rules. And predetermined rules that we have 
crafted in the protocol on dispute settlement.
    Now, if I may spend the last few minutes that I have to 
explain why I believe this should be a different trade 
agreement and why I believe we have a very unique opportunity 
to push back on the narrative that trade agreements benefit 
only the large corporations and that benefit only the elite 
across the countries and region.
    This has been the narrative that we are all aware of. I 
think if we do a number of things, we will be able to change 
this narrative.
    First, if we focus on small and medium enterprises that are 
led by women and young people as part of implementation of the 
trade agreement--and there are various digital tools that we 
can introduce to enable exactly that objective of inclusivity--
we will be on the right track.
    Second, if we focus on trade corridors to ensure that our 
trade corridors are competitive enough to enable trade to 
happen across regions of the African continent. And I think we 
can achieve this too by--by introducing technology of 
customization of the harmonization of customs systems, which is 
already made provision for in the agreement, we would be 
integrating not only from a legal text point of view.
    But if we introduce these customs systems, we would 
integrating the continent from a trade point of view all the 
customs procedures that different countries today have 
different customs procedures. Which is part of the reason why 
countries have remain trapped in smallness of national 
economies.
    And so I believe with the help of the United States and our 
friends, we can introduce digital systems for harmonization of 
customs procedures.
    The other important aspect of inclusivity as to why this 
agreement must be different and why it is so important that we 
focus on these areas that I am mentioning now is industrial 
development and industrialization, focusing on key specific 
value chains. Four value chains that we have identified that 
have the highest potential of enhancing inclusivity in terms of 
implementation of the trade agreement: agriculture, the 
automotive sector, pharmaceuticals, transport and logistics.
    With the help of the Mastercard Foundation, this study that 
when it was presented to us the observations were astounding. 
That we can contribute $11 billion annually to Africa's trade 
GDP and create over 750,000 jobs, mainly young people, small 
and medium enterprises that are led by women, if we mobilize 
investment in these value chains.
    For example, when we were in the U.S. recently, we had a 
very discussion with the U.S. Chamber of Commerce about how do 
we mobilize the investment that we need in the pharmaceutical 
sector so that the pharmaceutical sector can become part of the 
regional value chains and the trade that we want to see, that 
we want to create across regions of the African continent.
    So there are various interventions, I just mentioned only 
four or five, various interventions that we can make which I 
believe are absolutely critical to ensuring the long-term 
success of this agreement.
    You mentioned, Chairwoman, you mentioned, Chairman, in your 
initial remarks, you mentioned the Development Finance 
Corporation. I think there is a lot of scope for us to get 
support, support which is not going to be, you know, just aid 
that is provided in terms of a health crisis, but support that 
will be long-term and enable small and medium enterprises to 
expand their markets, not only intra-Africa, but to expand 
their markets also in the U.S. and AGOA.
    And so I believe that this is a very, very unique 
opportunity that we have. I think that this is something that 
when the leaders convene in September, when and where that 
meeting happens, the U.S. Africa Leaders Forums, I think trade 
and investment issues should be at the fore of their agenda.
    Yes, there are problems with peace and security. Those 
problems will always be there. But I believe if we solve the 
trade and investment challenge, that enables us to deal also 
with other issues of terrorism----
    Ms. Bass. Thank you.
    Mr. Mene. Of extremism that we see in other parts of our 
continent.
    So I want to thank you very much. I see I've slightly 
exceeded my time. Thank you very much for the opportunity. 
Thank you.
    [The prepared statement of Mr. Mene follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Bass. Absolutely. And I could not agree with you more 
in terms of the emphasis and the priority.
    Ambassador Mwencha, it's wonderful to see you again. I 
visited you many times when you were at the AUNS.

 STATEMENT OF AMBASSADOR ERASTUS MWENCHA, CHAIRMAN, EQUITY BANK

    Mr. Mwencha. Thank you, Madam Chair, and it's good to see 
you again. May I also recognize the ranking member and esteemed 
members. I'm so happy to be testifying here, together with my 
colleagues, Wamkele, Florie Liser, and Landry Signe.
    Perhaps to put the subject into context, since 2000 and 
2020, the U.S. investment in Africa is $50 billion, meaning 0.8 
percent of total U.S. investment abroad. And I think this is 
the context under which I would like to analyze this subject, 
by emphasizing the need for us to strengthen AGOA and also 
institutions or instruments like Prosper Africa within the 
context of the African Continental Free Trade Area.
    Perhaps to put it under proper perspective, I should 
underline that we want to engage in the 21st century trade 
arrangements that is based on shared values and the shared 
benefits as opposed to market access.
    And before that, we should also ascribe some of the points 
that have been raised by my colleague Mene concerning 
developing modern and the critical supply chains; small and 
medium enterprises; digitizing, and particularly for cross-
border; building resilience; critical supply chains; and also 
promoting environmental protection and a high standard of 
labor.
    Now, when looking at AGOA in perspective, and which has 
been a very good instrument for the last 20 years, some of the 
challenges that face AGOA is that it is not a negotiated 
arrangement. And therefore it is not stable, it is not 
predictable.
    This is one of the reasons why AGOA has not generated a lot 
of investment in Africa. But we want to propose here that for 
that to be able to play that role, AGOA should be extended 
along the lines of CBI. And also some of the tariff-rate quota 
products should also be included.
    But I want then to propose some three aspects of how we 
want to see U.S. trade--U.S. support the Continental Free Trade 
Area. One is first we would encourage that we support the 
continental free trade area by not engaging in the bilateral 
trade arrangements.
    I argued when there was this arrangement between Kenya and 
the U.S. I know it was not unpopular then, nor was it popular 
in my own country, Kenya. Because I believe if we do not 
strengthen the Continental Free Trade Area, we cannot benefit 
from economies of scale and all the benefits that Secretary 
Mene has mentioned.
    The second one is encouraging outward investment from the 
U.S. Prosper Africa coordinates some 17 U.S. institutions. I do 
not need to mention them, but here again we should focus on the 
key areas that Africa is looking for, particularly in 
infrastructure. Africa infrastructure deficit is over $100 
billion per annum, and the U.S. needs to move into sector, 
covering the areas of energy.
    The second one, second observation, is value addition, 
particularly in agriculture and mining sectors. And third, 
tools for support the service sector, which is important 
particularly to the supply chains.
    I should mention here that it would be remiss on my part if 
I did not thank the USAID for having agreed to support--its 
support to TradeMark East Africa. Which, as Secretary Mene has 
indicated, is supporting along the corridors, the corridors 
that will also be looking at issues to do with greening 
corridors, but also inclusive particularly for women in the 
business and also small and medium scale enterprises, in 
addition to reducing cost of doing business.
    Finally, I want to believe that given the large population 
of African Americans, those recently migrated and indigenous, 
we should also encourage them to be able to access the American 
investment because with that, you have about six million people 
who should be able to support investment, outward investment in 
Africa. But also encourage other U.S. investment into Africa.
    And finally, I should also hear and encourage that for AGOA 
to be able to incentivize the Continental Free Trade Area, 
those products which qualify in Africa for quota free, duty 
free in Africa should also qualify under AGOA.
    In addition, AGOA should have extended right away without 
having to go beyond 2022. Otherwise, the 5-year period is also 
a constraint. It should be given a longer period, more than 
2030, so that you can encourage investment.
    And for countries under sanction, we would encourage that 
we look for instruments that do not punish those companies that 
really are not involved in the instances that lead to 
sanctions. And that there should be instruments that can be 
used for this, for instance, APRM processes in Africa.
    This way, AGOA then will be able to be stable and will 
encourage trade between the U.S. and Africa to benefit from 
economies of scale where U.S. companies can benefit and for the 
mutual benefit of both sides of the Atlantic.
    I thank you.
    [The prepared statement of Mr. Wwencha follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Bass. Thank you, thank you very much.
    Dr. Signe.

   STATEMENT OF LANDRY SIGNE, PH.D., SENIOR FELLOW, BROOKINGS

    Dr. Signe. Thank you very much, Chair Karen Bass, Ranking 
Member Smith, and distinguished members of the Subcommittee for 
the extraordinary leadership on U.S.-Africa relations. So I am 
incredibly honored so--I'm grateful for the opportunity offered 
to me to really testify on the AfCFTA. So I'll also want to 
recognize my fellow distinguished panelists, Wamkele, Mwencha, 
and Liser.
    So, I am Landry Signe, managing director and professor at 
Thunderbird and senior fellow at the Brookings Africa Growth 
Initiative. And please allow me to applaud the Biden 
Administration for the U.S.-Africa Leaders Summit on other 
business initiatives which are being planned for 2022, critical 
tours to boost U.S.-Africa trade and investment.
    My recommendation on how the U.S. can promote the AfCFTA 
build on the fact that the AfCFTA represent a monumental 
opportunity to positively transform Africa and advance U.S.-
Africa trade and investment, as by 2050 Africa's combined 
consumer and business spending will exceed US$16 trillion for a 
population of more than 2.5 billion people and a combined GDP 
exceeding US$ 29 trillion.
    So the first recommendation, the U.S. Government should 
develop new regional and continental investment vehicles that 
go beyond sovereign guarantees to foster cross-border 
investment, with agencies such as the DFC, the U.S. Export-
Import Bank, the Trade and Development Agency, the Millennium 
Challenge Corporation, which has started with some of the 
cross-regional initiative.
    And the U.S. Treasury could also develop measures, 
including fiscal incentives and tax credits on investments 
conducted by U.S. corporations in Africa. The U.S. Small 
Business Administration and Minority Business Development 
Agency should be provided with more resources to facilitate 
SMEs and diaspora expansion in cross-border trade.
    And the USTR should be represented in relevant agencies. 
And the leadership of Prosper Africa could be further 
empowered, turning the COO role into a CEO role to boost 
agility.
    So, second, the U.S. Government should contribute to the 
expansion of manufacturing output to boost U.S.-Africa trade. 
For example, the U.S. African Development Foundation could be 
provided with more resources, and the GFC could leverage on the 
Fund for Export Development in Africa, by the Afreximbank and 
the African Development Bank, to channel more resources toward 
growth of SMEs and infrastructure development.
    Third, the U.S. Government, especially the U.S. Treasury, 
should support the reallocation of unused Special Drawing 
Rights issued by the IMF toward the recapitalization of African 
development finance institutions, such as AFDB, Afreximbank, 
among others, to boost U.S.-African trade.
    Fourth, the U.S. Government should invest in the digital 
economy, digital infrastructure, and education, and as well as 
breach the digital scale and human capital gap while ensuring 
privacy and cyber-security. And there programs such as Connect 
Africa, Power Africa, could be expanded, and American 
universities could also be supported to develop programs in 
Africa.
    Fifth, when engaging with Africa, that U.S. Government 
should ideally pursue mutual agreements through the AfCFTA, 
through AGOA. And the U.S. Government should also design what 
the future of U.S.-Africa trade will look like after 2025, 
because it's extremely important to provide that vision for a 
long-term investor. And AGOA also could be extended the way 
which focuses on the reciprocal trade conversation with the 
region as a whole.
    Sixth, the U.S. Government, especially USAID, the 
Department of State, or DFC, could also play a vital role here 
in lending support and financial resources to the AfCFTA for 
institutional development, and also support individual 
countries for the AfCFTA's successful implementation.
    In closing, by acting promptly and forging transformative 
partnerships, the U.S. really has the unique opportunity not 
only to advance its own interest, but also contribute to the 
transformation of Africa and the successful implementation of 
the AfCFTA.
    Thank you so much for your attention. I'm looking forward 
to your questions.
    [The prepared statement of Dr. Signe follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Bass. Thank you very much. Next, Madam CEO, Ms. Liser.

  STATEMENT OF FLORIZELLE LISER, PRESIDENT AND CEO, CORPORATE 
                       COUNCIL ON AFRICA

    Ms. Liser. Wonderful. Well, thank you so much, and just 
have to say that I'm honored to be here at this hearing today 
with those also on the panel, longtime friends and colleagues. 
And a special thanks to the Subcommittee on Africa, Global 
Health, and Global Human Rights, especially Chairman Bass and 
Ranking Member Chris Smith.
    I think you know who I am, so I won't waste time on that. 
CCA, as you know, has been a long [audio malfunction] and the 
benefits of U.S.-Africa trade and is very focused on how do we 
expand and build on that.
    This is the right time to look at how the U.S. can support 
implementation of the historic AfCFTA, as well as strengthen 
the U.S. trade and investment relationship with Africa.
    Countries on the continent are, as you know, recovering 
from the health and economic impact of the COVID-19 pandemic, 
moving forward in their post-pandemic recovery strategies, 
attempting to manage the new challenge and impact of the 
Russia-Ukraine war, and looking to get back on track in 
spurring growth and creating jobs.
    The United States is at an important crossroads in Africa 
economic policy. Since its enactment in 2000, AGOA, now set to 
expire in 2025, has been the cornerstone of the U.S. economic 
policy toward Africa. But in the interim, Africa has become 
much more sophisticated and better integrated globally since 
2000.
    Africa is now, as we've all been here talking about, in the 
process of implementing AfCFTA phase one, as well as 
negotiating phase two, which will look at important issues like 
investment protections, intellectual property rights, 
competition policy, etc.
    And when fully implemented, the 54 African--54-country 
African AfCFTA will create the largest free trade area in the 
world, connecting 1.3 billion people across the 54 countries, 
with a combined GDP of 3.4 trillion.
    However, achieving AfCFTA's full potential will depend on 
each member country putting in place significant policy 
reforms, including measures to improve their business climates, 
promote good governance, support private sector-led growth that 
creates jobs, and invest in their businesses, especially SME, 
youth, and women-owned enterprises.
    So AfCFTA is indeed a game-changed for Africa's own 
economic integration and regional trade. But let me just shift 
the lens a bit by also highlighting why Africa is important to 
the U.S. and how supporting AfCFTA implementation will help 
pull African products and services into global value chains, 
boost trade-related investment, and potentially increase much-
needed U.S.-Africa trade and investment.
    While Africa is complex, its strategic and economic 
relevance to the U.S. is clear. I have lots of facts, but let 
me just stick with this one or two. By the year 2025, more than 
half the population of Africa will be under age 15. And by 
2050, a quarter of the world's population will be African.
    With all of this in mind, the U.S. would best serve its own 
interests by recognizing that the USG can be one of Africa's 
best partners and U.S. companies are natural commercial 
partners.
    U.S. support for AfCFTA should be a critical component of 
U.S. economic engagement with Africa, and the U.S. should put 
in place policies and programs and initiatives--I love the ones 
that Landry talked about--that support AfCFTA implementation, 
such as technical assistance to the Secretariat, to individual 
African governments, and at the firm level.
    And this can be provided by a wide range of U.S. Government 
agencies and programs, Prosper Africa, DFC, EXIM Bank, SBA, 
USTDA, the Millennium Challenge Corporation, and others. But 
also through commercial partnerships between U.S. and African 
companies both large and small, and linking U.S. women-, 
minority-, and diaspora-owned SMEs to their counterparts on the 
continent.
    Let me urge that the Committee and USG provide as soon as 
possible clarity about how we're going to move forward. What 
will our U.S.-Africa economic relationship be like? And this 
will help not only our African partners, but will signal to 
U.S. companies, investors, and potential investors how they 
should proceed.
    Let me mention three or four quick bullets on things I 
think have to change or need to be done beyond AGOA. I think 
AGOA should be extended, but I think it should cover all 
African countries.
    Why should we have any U.S. initiative now that separates 
Africa into two groups, sub-Saharan and North African, when 
AfCFTA is bringing all of them together? Let's have all the 
countries of Africa under whatever program and initiative we 
do, including AGOA.
    Let's also not just look at goods, but how can we pull in 
services? Services contributes more to African GDP that goods 
does. So to have an agreement with Africa that does not address 
services I think is--should be a nonstarter at this point.
    Third, we need to incentivize investment, especially into 
manufacturing and value addition into regional and global value 
chains. And I'm happy to talk about ways that I think that that 
can happen. But that is really critical that we incentivize 
investment into that part of Africa's future and prosperity, 
manufacturing, value addition.
    And finally, a fourth point would be to support 
partnerships between African SMEs, especially youth-and women-
owned, with women-, minority-, and diaspora-owned businesses 
here in the U.S. That would meet two goals of equity, equity in 
terms of Africa, but also equity in terms of the U.S.
    So let me just say that I thank you for this opportunity. 
CCA looks forward to working with the Members of Congress and 
the U.S. Government, the AfCFTA Secretariat, African 
governments, and of course the private sector of both U.S. and 
Africa to develop a multifaceted approach that will grow and 
enhance the U.S.-Africa economic relationship.
    Thanks.
    [The prepared statement of Ms. Liser follows:]

    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Ms. Bass. And thank you. And we'll now proceed into 
questions. And each member will have 5 minutes. I will begin.
    I'd like to ask the Secretariat how it is--how are 
countries on the continent responding to what is going on in 
Ukraine and the impact of wheat? I mean, I was really shocked 
to know how much wheat is imported from Ukraine and how that's 
being disrupted.
    So I'm asking you this question in the context of as you're 
trying to develop the free trade area, when you have a crisis 
happening, like a famine or a wheat shortage, do you do 
anything differently? Do you adjust to respond to that crisis, 
or do you just continue moving forward?
    Because right away, what came to mind for me is Africa's 
capacity to grow wheat as opposed to importing it. Maybe you 
could comment, Mr. Secretary.
    Mr. Mene. Well, thank you very much, Madam Chairwoman.
    Well, I think there are two things that have defined our 
trade, intra-Africa trade approach since we were established: 
COVID-19 and the situation in Ukraine. You are absolutely 
correct; many, many countries on the African continent are 
overly reliant on the imports of wheat from Ukraine. And now 
that the crisis is getting worse and worse, as we see, the 
situation of food security in Africa is being impacted. We are 
seeing prices of basic food increasing. We are seeing anxiety 
about food insecurity.
    And so, this is a crisis, but it is also an opportunity for 
us to use the AfCFTA to accelerate our capacity at productive 
generation of food, to include farmers who today may be small 
farmers, but to ensure that they become part of Africa's food 
security value chain and the foods that we trade on the 
continent.
    Some of this has been done before in previous crises, the 
rice crisis of 2008-2009. We saw some improvement in Africa's 
capacity of production, providing value-added foodstuffs on our 
continent. I think we have to do the same.
    The second crisis is, of course, COVID-19. We were born as 
a Secretariat in the middle of a global pandemic. So, I do not 
know what it means to operate under normal circumstances from a 
trade point of view. And what we did at that point was to 
introduce trade corridors that will enable the transit of 
goods, faster transit of goods, when borders were closed, as 
they were across the continent and across the world at the 
height of the global pandemic.
    And so, what we have learned from these two crises is, No. 
1, we have got to accelerate Africa's industrial capacity. We 
have got to accelerate Africa's manufacturing capacity, as 
Ambassador Mwencha and Florie said.
    We have to make sure that, on these value chains that I 
mentioned--agriculture, transport and logistics, the automotive 
sector--these are the areas that, according to our studies, 
present us the potential to accelerate this industrialization, 
to build the capacity of countries' small and medium 
enterprises to export, not only under the AfCFTA, but also 
under AGOA.
    And so, in the short term, I think that is what we need to 
do. In the long term, it is mobilize investment in these very 
critical value chains. In the short term, when our ministers of 
trade meet, we will recommend to them that, actually, if we had 
a longer timeframe for reducing barriers to trade, particularly 
in food, let us bring that timeframe to a much, much narrower 
timeframe.
    In other words, let us accelerate the tariff reduction that 
we set out in the timeline of the agreement from 5 years to 
actually now. There is no need for us to wait 5 years to trade 
in critical agricultural products that are needed. That is 
something that we can do now, and we can do ourselves now, to 
make sure that we improve food security on the African 
continent.
    So, I see the short-term measure of accelerating 
liberalization of trade in food and a long-term measure of 
boosting our capacity, our productive capacity, in these 
ventures.
    Thank you very much.
    Ms. Bass. Thank you.
    I have some other questions, but my time has expired. So, I 
want to go to Representative Issa, and then we will have 
another round when all the members have had a chance to ask 
their questions.
    Mr. Issa. I apologize. Give me a second.
    Ms. Bass. OK.
    Mr. Issa. Oh, OK. All right.
    I want to followup on the earlier question on food 
security, if I could. Historically, Africa, particularly 
Zimbabwe, was a major wheat producer. That has diminished and 
not returned. Within the African continent, within your 
internal free trade, are there plans to find a way to restore 
the kind of production that, obviously, is available on those 
very fertile lands?
    Ms. Bass. Who are you directing that to, Mr. Issa?
    Mr. Issa. To Mr. Mene, who seems to be the one who best 
could answer it, but I can go on to another question, if that 
is maybe outside of the trade.
    I guess the followup question here on another area is, Mr. 
Mwencha, you said, you noted that $50 billion had been 
invested, and that is direct investment. The question I have 
is, what areas do you believe, had we put an additional half 
billion, a billion, whatever amount, that specifically would 
have had a return? And if you could, give me examples where 
China's investments of their dollars has, in fact, given the 
kind of return you are seeking.
    Mr. Mwencha. Thank you, the Honorable Issa. Thank you very 
much for your question.
    One of the areas where Africa has always lagged behind is 
in infrastructure. And as I said early on, if you look at the 
infrastructure deficit, particularly compared to world 
standards, average world standards, Africa needs over a hundred 
billion U.S. dollars. And these are areas like roads, rail, and 
air transport, but also energy, which is very critical. I know 
a lot of work has been done, particularly Power Africa, but 
also in the area of services. And this point was emphasized by 
Florie.
    Now where are these returns? What Africa has always been 
challenged with is government-to-government kind of investment. 
And this is where a country like China comes in. But there is 
also opportunity, particularly PPPs, public-private 
partnerships. And we believe that U.S. companies have the 
capacity, especially in the area of energy. There are areas 
like solar energy where Africa still offers a lot of 
opportunities. And I want to endorse what Florie said, that if 
we think of the continent as a whole, think of the Sahel, the 
potential for energy there. How Africa, then, would have that 
capacity to be able to power industrialization.
    The other part, of course, if you go to a country like DRC, 
the Democratic Republic of Congo, you have huge opportunities 
in that country. For instance, you have one of the largest 
hydroelectric dams which could power half of--I mean the entire 
continent. But this is project has remained in the books 
because we have not been able to attract investment.
    So, there are investment opportunities which we believe 
that, yes, the private sector could take advantage of. Invest 
either private-to-private, but also public. And these are the 
areas we are also encouraging, partly, perhaps I should 
indicate here, especially in the mining sector. Africa is 
losing its minerals, selling it as raw minerals without value 
addition. And we know, for example, today Africa is sitting on 
products that can power, for example, electric cars for the 
future. But these areas, still no investment. We are still 
exporting those raw materials that can be used in that. These 
are some of the areas where we are encouraging to bring U.S. 
investment to Africa to participate in value addition, but also 
in those sectors that can take us forward to the future.
    Let me answer the question that you mentioned back, and 
this is one of the reasons perhaps I mentioned in my testimony 
that, when we apply sanctions, perhaps we could do it in a way 
that they can be targeted, but not affect the private sector 
itself. Zimbabwe was a basket of grain in southern Africa, but, 
obviously, because of the sanctions, a lot of those companies 
have folded in Zimbabwe because of sanctions.
    If we had targeted sanctions or use instruments that would 
really go for the leaders, and not necessarily the private 
sector, we would have achieved other results, and Zimbabwe 
today would be producing for itself, but also for this southern 
African continent.
    Mr. Issa. To followup on that, sanctions are on and 
sanctions can be off. There has been one change of leadership 
there, although not much change in the style. My question, 
though, had been within the African community why--even if 
there are some sanctions on us, there are no sanctions on their 
neighbors. What would it take to do it? And then, if we were to 
change our strategy, allow trade development, allow that, what 
would be the necessary steps internally in Zimbabwe and in the 
region to restore what was once the bread basket of Africa?
    Because, ultimately, you mention productivity. My greatest 
question is not what aid we can give to Africa, but where can 
we have Africa be able to produce for itself. And wheat is 
certainly one of them historically, and as you say, being able 
to process your minerals to a greater level.
    So, that is why I asked what China had done in either of 
those areas, and specifically, in the case of Zimbabwe, which I 
visited. If we are able to work with the Administration to lift 
some sanctions in a targeted way, would we be able to get 
support for changes internally that would allow their 
productivity to rise? Ultimately, their productivity is not 
just the sanctions; there were other internal problems in 
distribution that led to that.
    Mr. Mwencha. Precisely, and I think I couldn't agree with 
you more, particularly, that it is not simply sanctions that 
led to the collapse of agriculture. There are internal 
constraints, some of which would be because, in the perceived 
failure of the State to be able to guarantee private sector 
investment, what has happened in the farmers themselves. Some 
of the farmers have had to leave. Some of the farmers ended up 
going to countries like DRC or Nigeria. But if they had been 
given an opportunity to be able to continue to produce and 
export, because Zimbabwe was already exporting to even the 
United States, they would have stayed on and continued to do 
that.
    So, that is why I still emphasize that, yes, we know that 
sanctions, those sanctions, they must be--and I seem to get the 
impression that you are saying, yes, they can be targeted, and 
absolutely, I agree with that. But, yes, if a country goes 
rogue, we can always apply targeted sanctions, but not blanket, 
which affects even the innocent farms. So that those farms, 
then, they themselves, can continue to operate.
    But once the farms--look at what happened in Ethiopia. You 
know, when the sanctions were applied, they would not be able 
to export. And some of those companies, which are American 
companies, private sector companies, had to be in that kind of 
limbo.
    And so, yes, let us try to encourage the private sector, 
which can be a lobby. And this is why, if the sanctions are 
targeted, those leaders would be under pressure to change.
    Mr. Issa. Thank you.
    Thank you, Madam Chair.
    Ms. Bass. Thank you very much. This is where I have 
problems with our policies regarding sanctions.
    Representative Omar, our vice chair?
    Ms. Omar. Thank you, Chairwoman.
    I guess we all have problems with our policies around 
sanctions.
    Thank you so much for having this hearing today.
    Mr. Secretary General, it is an honor to have you here with 
us today. As you know, in 2017, the U.N. Economic Commission 
for Africa published a report outlining a human rights 
framework for the African Continental Free Trade Area. That 
report made a number of recommendations about thinking of free 
trade in Africa around the human rights perspective, and 
particularly, in avoiding the perception that the agreement 
will serve to benefit only the rich.
    Can you tell us what of those recommendations have been 
implemented, and if you see a relationship between the African 
Continental Free Trade Area and the priorities related to 
democracy, governance, and human rights?
    Mr. Mene. Well, thank you very much for the question, Vice 
Chairwoman.
    There is a framework in the African Union on democracy, on 
human rights, and that framework applies to all of the 
different and various organs of the African Union, of which we 
are. And so, respect for democracy, human rights, respect for 
the normal democratic process in countries is a very critical 
pillar of the African Union. That is why the African Union has 
come out very, very strongly against unconstitutional changes 
of power or governments in Mali, in Burkina Faso, as well as in 
Guinea.
    So, we may not have a standalone protocol on trade and 
human rights. We may not have a standalone protocol relating to 
that within the legal architecture of the AfCFTA. However, we 
are bound by the overall adherence of the African Union to 
these values that I have just expressed.
    But we have approached this from the point of view of 
inclusivity. As I mentioned earlier, inclusivity for young 
people creates opportunities for young people to trade across 
borders; creates the opportunities for small/medium enterprises 
that are led by women to trade across borders with as little 
hindrance, either at law or in any other form, as possible.
    So, that is how we approach it from the trade point of 
view; from the point of view of inclusivity, creating 
opportunities. And as you correctly said, if we implement this 
agreement in such a way that only the big countries in Africa 
benefit or only the big corporations in Africa benefit, we are 
not going to succeed.
    We have, as the numbers were mentioned, by the year 2025, 
our continent will have the most dynamic and youngest 
population in the world. So, we have to create conditions where 
young people have the opportunity to expand their markets from 
the countries where they do business to other parts of the 
continent. We are already seeing that, but we are not seeing it 
in a structured way. We are not seeing it in a way that is 
anchored by this legal agreement.
    We are seeing already young women in Malawi who are 
producers of value-added agricultural products finding a market 
for themselves in West Africa, in North Africa. And this is, of 
course, in the absence of a trade agreement in the Trade 
Secretariat. And so, that is why my view is that, if we want to 
address questions of human rights, let's do so in the context 
of the trade agreement, inclusivity of benefits, shared 
benefits. So that not only the big countries benefit from this 
trade agreement.
    If I may just pick up on the point on Zimbabwe, I was in 
Zimbabwe last year, and I am sorry I misunderstood that the 
question was directed at me initially. I was in Zimbabwe last 
year. I am going to Zimbabwe again next month. We are 
mobilizing the private sector, global investors, because 
Zimbabwe has actually transformed their industrial policies, 
their economic policies, to make them more investor-friendly, 
from what I have seen. That is why a Swiss company today, a 
global $20 billion turnover company, is willing to go to invest 
in Zimbabwe, because the government has a new industrial and 
economic policy that recognizes the importance of engaging the 
global private sector, as they re-industrialize and as they 
rebuild their economy.
    And so, I would also join Ambassador Mwencha in urging that 
we relook at Zimbabwe, particularly, from the point of view of 
investing in productive sectors of Zimbabwe to enable Zimbabwe 
to get back to the position that Zimbabwe was in 20 years ago 
or so. And that is why we are going back there next month with 
Swiss investors to see what can we do, for example, to bring in 
the agricultural sector to be part of the value chain for the 
pharmaceuticals area.
    There are a number of things that Zimbabwe is doing. They 
are already exporting oxygen, which was a high commodity at the 
height of the pandemic. They are already producing their own 
germ-killing products, all of these products that are required 
to fight the pandemic on the back of the agricultural sector. 
But we need to do more to mobilize investors to work with the 
Government of Zimbabwe, so that we see the improvements that 
all of us want to see.
    Thank you.
    Ms. Omar. Wonderful. Madam Chairwoman, I have used up all 
my time, but if there is followup, I would like to go again.
    Ms. Bass. Go ahead.
    Ms. Omar. Oh, OK. To that point of more things that could 
be done, what would your advice be for U.S. policymakers about 
pitfalls that we should avoid and policies that we can help to 
promote to make sure Africans, and as you all have alluded to 
in your testimoneys, young Africans as well, the youth of 
Africa?
    You can take that or maybe Dr. Signe can answer, too.
    Dr. Signe. Thank you very much.
    Mr. Mene. Please go ahead. Go ahead, Professor, please.
    Dr. Signe. I insist, Excellency, please go ahead.
    Mr. Mene. Thank you very much. I will be brief, 
Congresswoman.
    I think that we should focus on interventions that will 
improve inclusivity in implementation of the trade agreement. I 
mentioned when I was in Washington a month or so ago that the 
interventions we should be exploring are those that are going 
to create the biggest impact in the fastest period of time. For 
example, if Development Finance Corporation can say we will 
guarantee small/medium enterprise loans and finance facility up 
to $2 billion, whatever the case will be, that would enable us 
to bring in more small/medium enterprises to trade.
    Yes, when there is a crisis, a food crisis, bags of maize 
meal, they do help, but in the long term, impact food 
intervention is one that creates opportunities for small/medium 
enterprises and for young people. And so, we are creating a 
digital marketplace, AfCFTA digital marketplace, with the 
support of the Mastercard Foundation. And this digital 
marketplace will bring in small/medium enterprises. However, we 
will need the trade finance facility to support that. So, that 
is a trade across borders; they have the capital that they need 
to do so.
    My apologies, Professor. I just wanted to briefly respond 
to that.
    Dr. Signe. My pleasure, Excellency.
    So, thank you very much, Vice Chair Omar, for the question.
    So, we have different levels, and I think I am supporting 
and endorse what the Excellency Mene has just said. In order to 
capitalize on young people and, also, women, there are 
different dimensions to consider.
    One, the entrepreneurship and SMEs, because young people 
are twice as likely to be unemployed than the current 
generation, which means that government and operations cannot 
create enough jobs for young people on the continent. And it 
is, therefore, extremely important to promote entrepreneurship 
and SMEs, which will be done from the U.S. side by expanding 
the role of the U.S.-African Development Foundation, which is 
already investing. But I think the budget is quite small. So, 
if the budget could be tripled or quadrupled, that would make a 
difference.
    But I also think that the DFC, for example, could liberate 
some existing firms in Africa, whether different for export 
development in Africa or partner with the African Development 
Bank, to really channel more resources toward the growth of 
SMEs and infrastructure development. And unlocking the 
potential of SMEs and of young people on the continent will 
also be done through the collaboration between the African 
American or the African diaspora and Africans back home. And 
that is one of the reasons why I think that really further 
investing, further providing resources, including in the United 
States to the U.S. Small Business Administration or to the 
Minority Business Development Agency will really help unlock 
the potential of the young people on the continent. Because, 
quite often, when SMEs conduct business between the U.S. and 
Africa, young people are involved.
    I will end by saying, also, about the couple of points 
mentioned earlier, that to address food security in Africa, 
there is a continental entity called the Comprehensive African 
Agricultural Development Programme which has been launched and 
is being implemented for almost a few decades now. And it is 
really important to build on such existing program because, as 
you know, that about 60 percent of the world can use arable 
land is based on Africa, why the continent will be based on 
food and security.
    So, definitely agriculture, whether in the consumer market, 
is the largest area of spending, but also in the consumer and 
business spending, agriculture, food, and beverage are the 
largest areas of spending. So, it is definitely we also are 
encouraging young people to embrace those opportunities.
    Thank you.
    Ms. Bass. Thank you.
    I believe Representative Omar is finished.
    Ms. Omar. It looks like Ms. Liser wants to add something, 
if that is permitted by you, Chairwoman.
    Ms. Bass. OK, in response. Sure.
    Ms. Liser. Just very briefly, I actually wanted to come in 
on the point about African countries losing their AGOA 
eligibility. And I just wanted to point out, I actually had a 
conversation with the person who runs the GSP program from 
USTR; it was about a year ago. But I was thinking about this 
whole issue when Ethiopia was looking like they were going to 
lose their eligibility, and unfortunately, they did. So, just 
two quick points.
    It is important for AGOA to have eligibility criteria that 
have to do with governance and rule of law, and all of that. 
But what I was learning from the person who handles GSP is 
that, first of all, they are not reviewed every year. There is 
no annual review for the 100-and-odd countries that are 
eligible for GSP. And it is only in the last few years that 
they are reviewed every 3 years by groups--all the Africans, 
all the Latin Americans, all the Asians. But you are only 
reviewed every 3 years.
    But there are countries who have not lost their GSP 
eligibility, despite some tremendously terrible things that are 
happening in those countries. You know, probably Burma or 
Myanmar would be an example of that.
    And so, what I was thinking was that, under AGOA, maybe we 
look at what are the other tools and options for addressing 
some of the issues that have caused Africans to lose their 
eligibility; aligning that process with what it is we do for 
everybody else in the world.
    And even someone told me that those products coming in from 
that region of China--I always get it confused what it is--but, 
you know, that it was just those products that have been 
eliminated from entry. They are not eligible for GSP, but 
China's products as a whole have not been blocked. I mean, we 
would have nothing if we blocked all of China's products. But 
products specifically from that area where they were having 
those human rights issues, those were blocked.
    So, I think that there are other options and methods for 
dealing with legitimate concerns about governance and rule of 
law in Africa. But what we do under AGOA is different than what 
we do for other countries who have access to our preferential 
program.
    So, I just wanted to stop there. But I think that is an 
important thing to think about for the next iteration of AGOA.
    Thank you.
    Ms. Bass. Representative Omar?
    Ms. Omar. No, you have been generous with the time. So, I 
will let you take it from here.
    Ms. Bass. OK. Well, let me just actually continue there, 
because, Madam CEO Liser, I really do want us to look at that. 
And maybe it is something that we could do this year. Because I 
think the way we handle AGOA is real problematic.
    I do not even know if, in the Ethiopia situation, it would 
have been able to target a specific area like China. But, you 
know, where you and your organization spend all this time 
trying to get companies to do business in Africa, and then 
companies do so, but knowing that, if anything happens 
domestically in that country, they can be banned from doing 
business. And it just seems like it defeats our overall 
purpose, and then we complain about China's involvement in 
Africa.
    So, I would really hope that you would expand on that, Ms. 
Liser, and come up with some very specific ideas around--I 
mean, I think, No. 1, pointing out the differences of how 
African countries are dealt with differently. When we are 
really worried about and dependent on the products, for some 
reason, we do not see the same human rights abuses. I think you 
were talking about the Uyghur camps. I think that is the area 
you were talking about.
    I did want to ask you, though, you talked about adding 
services in AGOA. And just thinking of GSP, how do you quantify 
that? I mean, services aren't really subject to tariffs, are 
they? How would you do services in AGOA?
    Ms. Liser. Well, it would have, just as in FTA you have a 
services chapter, and you agree that there are going to be--you 
are going to liberalize the provision of certain services. So 
that, for example, if you wanted to set up a bank in a 
particular country, you know, countries may have rules and 
regulations that do not allow foreign banking or financial 
institutions to come in.
    So, the way that services liberalization has worked in free 
trade agreements is that the two countries or the multiple 
countries, where it is done multilaterally, like what they were 
going to do in the Trans-Pacific Partnership, is you identify a 
series of services sector and you say these sectors will be 
open for establishment by our partners, right, because they are 
also allowing us to freely establish services in those 
countries and provide those services in the partner country or 
countries.
    So, again, it has to be handled the way that services trade 
is handled, but I think that liberalization of services trade 
has been a critical part of all of the U.S. free trade 
agreements, you know, whether it is Australia or Chile or 
Mexico and Canada, or whoever. So, it would follow something 
similar to that, if we could.
    Ms. Bass. I see. I see. Well, thank you. I guess we are 
going to have to call on you a lot, as we develop AGOA. But, 
given the role you played in it before, I think it is very 
appropriate.
    I wanted to ask a final question of the Secretariat. You 
mentioned the digitalization, where the United States could be 
helpful. And I know in our document we were looking at 
digitalization of border crossings and customs procedures. Is 
that what you were referring to specifically? And then how, 
specifically, can the United States help? Is it technical 
assistance from our tech companies? Is it cash? I mean, 
obviously, cash; cash is always good. But what were you 
thinking of, specifically, how the United States could be 
helpful with that part of the trade area?
    Mr. Mene. Thank you very much again for the question.
    Where I am today in Ghana, right 300 kilometers away from 
me is the capital of Togo, Lome. One is French-speaking; the 
other one is English-speaking. When you drive to the border, 
you see trucks on either side of the border, and that's because 
the systems are not interoperable.
    Ms. Bass. Oh.
    Mr. Mene. And that is the case across many, many countries 
in Africa, except in the east African community where over the 
last 10 to 15 years they have invested significantly in 
digitalization of customs procedures and ensuring free transit.
    So, what I have the ambition for us to do is to create a 
digital platform for customs procedures in transit. And it may 
not be the U.S. Government, but, certainly, tech companies that 
already have the technical capacity to advise us on what would 
be the best option, interoperability of languages, different 
languages, different currencies, as goods are trading across. 
This is something that certainly, whether it is Microsoft or 
Google, or any other U.S. tech companies who may have an 
interest to address this massive challenge, it is, also, an 
opportunity, I should say----
    Ms. Bass. Yes.
    Mr. Mene [continuing]. Because it has not been done before 
at a continental scale, at a large scale.
    So, one, it is a big challenge. It is also an opportunity 
at innovation, and it is also an opportunity for us to, once 
again, demonstrate that free trade can actually be embedded on 
technological advancements and it can create conditions where 
the people that we are talking about, these small/medium 
enterprises that export across borders, where they can see 
efficiencies of their businesses and their trade, and that is 
how we contribute to inclusivity of this trade agreement.
    And so, I think mobilizing and working with the tech 
companies is a very, very good starting point on this question 
of digitalization of trade in Africa.
    Ms. Bass. Thank you very much. And with this, let me--oh, I 
am sorry, Dr. Mwencha, Ambassador?
    And, Representative Omar, our vice chair, would you mind 
taking over for me for a couple of minutes?
    Ms. Omar. Of course, Madam Chair.
    Ms. Bass. OK. And you can, if you run out, you can feel 
free to adjourn. I need to go speak at another committee. Let 
me just thank all of the witnesses.
    Ms. Omar. Thank you.
    Mr. Mwencha. Thank you, Madam Chair. And as you leave, I 
want to thank you again for giving us this opportunity to 
testify and look forward to continuing to work with you in 
advancing U.S.-African causes. Thank you so much.
    Ms. Bass. Absolutely. Thank you. Ditto.
    Mr. Mwencha. Let me comment on two aspects. And that is on 
services and, also, digitalization that Florie referred to, but 
also Ambassador Mene.
    Now, on the services, the services we are talking about is 
health, education, transport, and banking. If I could give an 
example, particularly transport, African exporters and 
importers account up to more than 40 percent of the value of 
the product at the consumer point, and that is because of 
inefficiencies, whether it would be at the border, on the road, 
or border posts, where there is a lot of times consuming 
documentation and, also, bureaucracy. And for that, the United 
States could also support in some of those areas, particularly 
in modernization of some of the ports, but also at the border 
points.
    Now, in the area of transport, African producers exporting 
to the United States find it very difficult to be able to 
compete with other producers who come from, say, Latin America 
or Asia because, if you look at the turnaround time for 
exporters, say, of Mombasa to the United States, the time 
taken, their goods are never going to be competitive.
    And so, one of the things that we could do is, then, to 
encourage shipping companies to come and dock in African ports, 
but also encourage the development of these facilities in 
Africa, joint ventures. Some of the areas that one could define 
to help, the United States is a leading country in the sector 
of health and pharmaceuticals, but also in diagnostic health. 
And here again, if there was an opportunity for the United 
States to partner with African physicians, where the modern 
technology can be used, this could be of great help, that 
Africa can be able to access that help, rather than today 
African sick patients have to go to India or the United States 
for treatment, when actually working with similar counterparts 
here, this can be achieved.
    On this position, and giving the example of what Ambassador 
Mene has talked about, TradeMark East Africa that I referred 
to, we have been working with the East African community to 
support the transport corridors, if you look at what that has 
been done from the Port of Dar es Salaam into Burundi and DRC, 
but, also, Mombasa, Uganda, and Rwanda.
    I will, first, give you one metric. Before TradeMark came 
in, it took around 42 days for goods to come to Mombasa port 
and reach Rwanda. With TradeMark and working with the leaders 
of the region, this time has been reduced to six or 5 days.
    Now imagine how much back trips you would be able to make 
if you went for 2 days as opposed to 5 days. And we want to 
believe that this time can be reduced further. And here is, 
again, where a lot of support from the United States is coming 
through USDA, and we want to continue this in support of 
particularly what Ambassador Mene has mentioned, doing the 
corridors in West Africa and, also, other corridors in southern 
Africa. So that we can make trade more efficient and easier.
    Thank you.
    Ms. Omar [presiding]. Thank you all. I think we will wrap 
up soon, but I wanted to see if maybe--I know that we have all 
talked a lot about food insecurity quite a lot. And, Dr. Signe, 
when you said 60 percent of the world's arable land is in 
Africa, I am curious if you and the rest of the panel maybe can 
help us understand what specific investment can be made to make 
sure that Africa is able to increase its ability to produce 
food.
    Dr. Signe. Thank you very much, Vice Chair, for the 
extremely important question. I think there are different 
dimensions where support or interventions are extremely 
important. One is at the government level, and the other is in 
the private sector.
    So, from the government perspective, one of the barriers 
for agricultural productivity is really the cost of doing 
business--the entrance, the infrastructure. When you have no 
road to connect a rural area with farmers who are producing in 
a specific market, those are critical actually. So, access to 
market, especially for the small farmers, but also, 
definitively, the infrastructure which plays a role. So, the 
government should really intervene in unlocking those barriers 
to productivity by reducing the costs for doing business and 
building more infrastructure and providing the agricultural 
entrance. So, that is one dimension.
    Now, we also have the private sector dimension. So, many 
solutions and technologies have been developed. It includes, 
especially, directed to the technological revolution; digital 
tools demand order. And we have been very success across the 
continent. But one of the challenges is really to scale some of 
those innovations, whether drone-based innovation, mobile-
phone-based innovation to improve agricultural productivity.
    So, quite often, the solutions are only effective for a 
limited number of producers. So, a strategy to scatter those is 
to really scale up some of those innovations. It is really to 
invest in the private companies which are developing such 
innovations.
    So, those are the two key dimensions that I see. So, the 
one dimension, government has to do more or better in 
addressing the core barriers to agricultural productivity, and 
on the other hand, the private sector, or some of the solutions 
which evolve from the private sector have also to be scaled and 
to be expanded.
    And in order to address the question of technology, already 
what has confronted us to really have some of the African 
countries developing grand strategies related to digitalization 
or to the fourth industry, our revolution. Because many 
solutions already exist around the world. However, why do not 
we have those identified, assessed, with options provided, 
depending on the cost-benefit structure? So, that is one other 
dimension.
    Another is, also, agility. So, quite often, governments are 
slow in really adopting the innovation or following up with 
some of the innovation, especially when those disrupt the 
existing legal environment. So, on a thing like this, it is 
also important for the United States to share its experiences 
in terms of agility and agile governance.
    And an additional dimension is really--and I mentioned it 
earlier--the investment in the digital infrastructure, both the 
digital infrastructure and the physical infrastructure. Because 
many of the farmers are living in rural areas which, 
asymmetrically, compare to some of the urban centers.
    So, those are some of the areas which can really help 
addressing the agricultural challenges. And probably to end, I 
will finish by adding a couple on AGOA.
    The design of AGOA should be different. It should be 
expanded with special rule of origin, especially in the context 
of global supply chain, if the United States wants to reduce 
dependency to some of the origins, like Asia. So, having 
special rule of origin for more product, including transformed 
products, will definitely help, and supporting the continent.
    You suggested the Comprehensive African Agricultural 
Development Programme, which has been implemented already by 
numerous countries, would also make a monumental difference.
    I will stop there because I see that my colleagues have a 
lot.
    Ms. Omar. Yes. I mean, everyone, please add your point, and 
then we will just close out.
    Ms. Liser. Thank you.
    Ms. Omar. Ms. Liser?
    Ms. Liser. Oh, thank you. Thank you so much, Vice Chair. 
So, I actually just wanted to address this issue of food 
security from a slightly different angle. It has always 
troubled me--and everybody that knows me knows this--that so 
many of Africa's products leave the continent raw, as raw 
commodities, and get processed in other places. And so, even 
though we are talking about growing more of their own, we know, 
on the one hand, that there is a fair amount of wastage that 
happens on the continent. But if more of Africa's raw products 
were captured in the value chain and processed, there are a 
number of things that would happen.
    First, you would be attracting investment into value-added 
manufacturing and agribusiness on the continent.
    No. 2, you would be hiring more people. You would be 
developing jobs further up the value chain. So, you are not 
just talking about what the farmers do, but you are talking 
about what all the people who process those products along the 
way do.
    And finally, you are providing more resources to those 
people who, even though they may not grow whatever the product 
is, they now have more resources to be able to buy what they 
need in terms of food and food security.
    And I just have to share one fact that bothers me, and 
still bothers me to this day, even though it is changing. More 
than 70 percent of Africa's cashews, just as an example, are 
processed in Vietnam and Bangladesh and India--Vietnam and 
India. And the interesting thing is that whole industry of 
cashew processing in Vietnam was developed by other people. 
People bought the machinery, invested the money. It is 
enormous. And now, Vietnam needs Africa's raw cashews in order 
for them to support that industry, which employs tens of 
thousands of people.
    So, you are shipping the raw cashews all the way down to 
South Asia, creating jobs there, getting investments there. And 
now, the Africans are saying, well, cannot we process more of 
our own cashews here? And there are lots of reasons people will 
tell you why it cannot happen. I do not want to go into all of 
it.
    Some of it is financing. Some of it is the machinery that 
the Africans need that is produced by the Indians. The Indians 
have a vested interest in the Vietnamese processing of cashews 
because they are the ones who built that industry up. So, the 
Africans cannot even get the machinery that they need sometimes 
to process their own cashews, create their own jobs, and get 
the resources from their own product. So, that is just like one 
example.
    And I can tell you, Vice Chair, this happens across many 
value chains in Africa. So, we have to stop this--not stop it--
but we have to incentivize investment that goes to Africa to 
develop their agricultural products there in Africa.
    Thank you.
    Ms. Omar. Go ahead, Ambassador, yes.
    Mr. Mwencha. Thank you very much. I want to build on what 
Florie said, but also Landry.
    First, in terms of improving agriculture, we need to look 
at the methods for funding in Africa agriculture. We are 
talking more than almost 80 percent of Africa's population is 
dependent on agriculture. And when you look at the productivity 
in agriculture, whether it is per acre or by animal, is it the 
best in the world?
    And that is because, start with, for instance, the simple 
technology. Africans are using, by advice, hand-held hoes for 
tilling their land. Simple mechanization, but that will require 
that you support the farmer in terms of having access to 
finance, but also supporting them through some of the crops on 
the farm.
    If you look at food losses ex-farm, what has been not 
harvested, what you call post-harvest food losses, it is almost 
30 percent. So, improving harvesting methods, but also 
improving the seed, land, and the latest there is. Equally 
important is to look at the issue of land reforms. So that we 
can look at how Africa is managing its land.
    Perhaps one controversial point I would like to introduce 
here is the question of subsidy. And you know this has been a 
controversial subject, what is at the WTO. Unfortunately, some 
of the countries, the rest of the world, subsidize, but also 
dump their products in Africa. That makes the African farmer 
less competitive. And some of it could be given in aid form, or 
whatever form.
    If there was an execution, for instance, in farming, for 
argument's sake, say in Somalia. Why do not you procure from 
neighboring countries, Kenya, rather than import all the way 
from the United States? That way, you encourage African 
farmers. Because once you bring that kind of subsidy, it kills 
local production, particularly production cycles. But, also, 
globally, this is also a subject that we should address 
squarely on how to manage the subsidy.
    But I want to agree with, particularly, the point that 
Florie has raised. If you look at what Ghana has done in the 
area of cocoa, agricultural farmers ordinarily get 15 percent 
of their value of the product when it is not processed ex-farm, 
but exported. Like what was just mentioned, if we just are 
providing, you will see African farmers becoming richer and 
instead of being poorer.
    In fact, if you look at African farmers, it is the most 
affected community on the continent because they are getting 
poorer and poorer, and insecurity will come because the younger 
are going into towns because agriculture is no longer a 
business, and therefore, creating instability and migration, 
and all the rest of the challenges.
    Ms. Bass [presiding]. Are you OK, Ms. Vice Chair?
    Ms. Omar. I do not know if the Secretariat wanted to add.
    Ms. Bass. OK.
    Ms. Omar. He was the only one that did not give a comment 
on this. But I am OK. Thank you. Thank you all again for your 
input and your testimoneys. Really appreciate it.
    Ms. Bass. If the Secretariat is going to jump in, let me 
add a question on. Because you were talking about the 
digitalization and you mentioned the East African communities. 
And so, I wanted to know, who did it here? And if it is a 
Microsoft or a Google issue, then it would be great to work 
with them. But how are the East African communities able to do 
it?
    Mr. Mene. Thank you very much. So, the intervention in the 
East African community was led, as Ambassador Mwencha said, by 
TradeMark East Africa with the support of primarily DFID. That 
is the former DFID, the U.K. development agency. And it was a 
long-term intervention of 10-15 years investing in 
infrastructure, physical as well as soft infrastructure, and, 
of course, investing in the border posts themselves.
    Just to give you an example, when I was at the Port of 
Mombasa that Ambassador Mwencha mentioned, they have a command 
center. And through digital technologies, they are able to 
track trucks that are coming in as far away as along the 
corridor, as far away as South Sudan, going into the port or 
leaving the port to various destinations in East Africa. And 
so, these are interventions that have made a substantive 
difference in trade efficiency along the northern corridor, in 
particular.
    What I have in mind is building on that, building on that 
not only from the point of view of hard infrastructure, which 
is important, building world-class ports and borders, but from 
a technology standpoint, how do we look at the success story of 
East Africa and how do we model that throughout the entire 
continent, using the latest technological advancements? This is 
something that I think is possible.
    I would be the last person in the world to tell you how; I 
do not know, because I am not a tech expert. But I do know 
that, with the expertise and the support of the U.S. Government 
and entities, we can have--which we can all be proud of--we can 
have a digitalization of trade that is actually world-class, 
that supports implementation of a trade agreement, in a way in 
which we have not seen anywhere around the world.
    So, I think it is a very unique opportunity to work with 
the private companies, the tech companies, to find solutions to 
how do we digitalize trade, transit at borders, and, of course, 
ensure inclusivity and affordability of trade on the African 
continent.
    My view is that these are the kinds of interventions that 
are critical to make sure that the United States and those U.S. 
investors who are here, that they see return on their 
investments; that, in turn, we will see jobs being created 
here. We will see faster transit of goods. We will see faster 
transit of services across our borders. And so, this is what I 
think is one of the practical interventions that can be made.
    Ms. Bass. Well, thank you. Let me take this opportunity to 
thank all of our witnesses, and for your patience today. This 
has been very, very helpful.
    I certainly want to see the United States step up. And 
after listening to Ms. Liser's comments about the cashews, I 
mean, it is like the whole world joins in exploiting Africa. 
And it just seems like we have to figure out how the whole 
world comes together and recognizes that Africa's success is 
really the success of the world, considering the population, 
the age, and all of that.
    And it creates a tremendous opportunity for the youth, for 
the young people, to the extent that the trade agreement really 
grows. I think it is great that the continent is working with 
Europe, but it sure seems like that needs to be Asia or Latin 
America, and the United States as well.
    Thank you so much. Thank you very much for your time, your 
expertise, your contributions.
    Mr. Mene. Thank you so much.
    Mr. Mwencha. Thank you.
    Ms. Liser. Thanks for having us.
    Ms. Bass. Sure. We are now adjourned.
    [Whereupon, at 12:45 p.m., the subcommittee was adjourned.]

                                APPENDIX
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                    REMARKS FROM REPRESENTATIVE BASS
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              ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
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