WASHINGTON (Reuters) - Africa urgently needs investment from corporate America for the billions in annual aid to become effective, the head of a U.S.-Africa trade advocacy group said on Thursday.
Stephen Hayes, the president and chief executive officer of The Corporate Council on Africa, said investment by U.S. companies in Africa was not enough, and the Obama administration should formulate a strong policy to address this.
"We have a foreign policy crisis on our hands in terms of our U.S.-Africa relations. If you don't have investment in Africa, aid becomes ineffective," Hayes told a panel on sustaining growth in sub-Saharan Africa at the Brookings Institution.
"The president has to say Africa is important ... we don't realize how Africa is important to us."
But Treasury's Deputy Assistant Secretary for Africa and the Middle East, Andrew Baukol, said the United States was committed to Africa and was working with various countries in areas of infrastructure, finance, agriculture and food security and improving business climate.
Investment by companies in Africa, which has been hard hit by the global financial crisis and recession, has been frustrated by high levels of bureaucracy and corruption as well as insufficient infrastructure.
Even if corporations were interested in doing business in Africa, banks were too risk averse to provide funding for business ventures in the continent, Hayes noted.
"Unless you have a partner on the ground, it's hard to become invested in the country," he said. "We need to start developing a new vision toward Africa."
The International Monetary Fund estimates that output in Africa will expand by just 1 percent this year, after growing about 6.5 percent annually between 2002 and 2007 -- which was the highest rate in 30 years.
Growth next year was expected to pick up to just over 4 percent.