By Austin Cooper Jr.
The months of April and early-May were as busy time for IGD with the launch of a four-city Africa Investment Rising Roadshow Tour. A highlight of the Washington roadshow stop was a legislative briefing in the U.S. Capitol on the AGOA & MCA Modernization Act of 2018. Moderated by Dr. Mima Nedelcovych, President and CEO of IGD, congressional staffers Tom Sheehy, Majority Staff Director of the House Committee on Foreign Relations; Shelley Su, Trade Specialist, Majority, House Committee on Foreign Relations; Meghan Gallagher, Policy Analyst, Majority, House Subcommittee on Foreign Relations; and Alicia Robinson Morgan, former Deputy Director of the Office of Africa at USAID provided an update on the status of the legislation. More than 20 IGD Frontier Leaders, representatives from East African and Southern Africa Trade and Investment Hubs and USAID, Administration officials and Congressional staff participated in the briefing.
President Donald J. Trump signed the legislation into law on April 23. The new law serves as an extension of AGOA, the signature US-Africa trade law, promoting policies that foster trade and cooperation. The Act will create a website, which will detail the benefits of the program and provide the Millennium Challenge Corporation (MCC) greater flexibility with which to facilitate trade by permitting up to two compacts in one country. In addition, the Act will strengthen the accountability of the MCC by making the criteria for reporting requirements stronger. Embassies in chosen countries will also be encouraged to promote export opportunities to the United States.
IGD is also closely monitoring House and Senate developments on another key piece of legislation, the “Better Utilization of Investments Leading to Development Act of 2018,” also known as the “BUILD Act of 2018.” The legislation, which has garnered strong bipartisan support, was introduced in both Houses of Congress on February 27, and appears to be on a fast-track for passage by the Congress.
This bill establishes the U.S. International Development Finance Corporation to facilitate the participation of private sector capital and skills in the economic development of countries with low- or lower-middle-income economies and countries transitioning from non-market to market economies in order to complement U.S. assistance and foreign policy objectives.
Specifically, the corporation will: (1) make loans or loan guarantees;(2) as a minority investor, acquire equity or financial interests in entities; (3) provide insurance or reinsurance to private sector entities and qualifying sovereign entities; (4) provide technical assistance; (5) administer special projects; (6) establish enterprise funds; (7) issue obligations; and (8) charge service fees.
In addition, the corporation, which will terminate on September 30, 2038, will not provide assistance to: (1) a country whose government has repeatedly supported acts of international terrorism; and (2) a private sector entity that is engaged in monopolistic practices.
Finally, the legislation provides transitional provisions, includes transferring to the corporation the functions, personal assets and liabilities of the Overseas Private Investment Corporation (which is terminated in the bill) and specified elements of USAID.
Recognizing that private sector investments are needed in emerging markets to build infrastructure, increase first-time access to electricity, start businesses, create jobs, and ultimately to reduce the need for American foreign assistance, IGD urges a swift passage of the legislation. Moreover, IGD remains supportive of efforts by the White House and 115th Congress to encourage the private sector investments in Africa and effective foreign assistance programs that advance sustainable development and inclusive growth.
Austin R. Cooper, Jr., is the Director of Government Relations for the Initiative for Global Development and President at Cooper Strategic Affairs, Inc.