Wednesday, July 10, 2013

Uncle Sam's Proliferating Development Agencies Will "Power Africa"

I have read the fact sheet on Power Africa, the Administration's new effort to bring economic development to a long-neglected part of the world.  I am totally in favor of a smart US development effort in Africa to counter China's huge influence.  Power Africa is interagency and leverages the private sector; so far so good.  Reading the list of agencies involved has started to make me wonder how the US got so many.

US Agency for International Development (USAID):  This is the oldest official home for foreign aid in the US Government and used to be part of the State Department.  I never understood why it was carved out into a separate agency.  The Executive Office of the President and National Security Council have a span of control that is not infinitely wide.  Every separate agency complicates Cabinet-level accountability, appropriations, reporting, auditing, you name it.  If I could wave a magic wand over Washington DC, I'd put USAID back in State so the White House can more easily pin the rose on a lead agency for an interagency development project.

Overseas Private Investment Corporation (OPIC):  This one's been around a while too.  I'm assuming it's involved to reduce the cost of capital for those private companies named as participants in Power Africa. The one private participant that doesn't need any more such breaks is General Electric.  Its GE Capital unit has been tagged "systemically important" and will not be allowed to fail anyway.

U.S. Export-Import Bank (Ex-Im):  I'm glad this one is on board but I'd prefer that it target its help to small and medium-size US businesses that want to export to Africa.  The named businesses are all heavy hitters.  Smaller businesses need to attend the Corporate Council on Africa's 9th Biennial US-Africa Business Summit this coming October so they know how to open doors over there.

Millennium Challenge Corporation:  This one is the youngest of the agencies, less than a decade old and designed exclusively to fight poverty.  I just don't understand why it's not part of USAID.  It has the same mission!

US Trade and Development Agency (USTDA):  Here's another miscellaneous independent agency that does the same thing as OPIC and Ex-Im!  It needs to be merged with one of those agencies.

US African Development Foundation (USADF):  Wow, here's another one I've never heard of until now.    It's been around for three decades and now has a clear role to play thanks to the African Growth and Opportunity Act (AGOA).  It's nice to conceive of these kinds of agencies as entrepreneurial because of their small size and limited oversight, but I just wonder how many others are out there and whether they duplicate something a larger agency does.

BTW, I've also never heard of Africa Finance Corporation but it's in this project too.  They must be the most reputable local partner Uncle Sam could find.  Its multilateral nature means Africans can handle African affairs quite well.

I want Power Africa to succeed.  I also want its enabling agencies to support their private sector partners effectively.  IMHO that will require, at some point, a review of whether some of the federal executive agencies involved are duplicative and need to be merged.  That in itself would set a good example for our African partners who look to the US as a model of transparency and efficiency.