Rosa Whitaker: How To Turn Poverty Into Prosperity In Africa

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For decades, Rosa Whitaker has been at the heart of Africa’s growing trade. Working for presidents Bush and Obama, she helped formulate the game changing African growth and opportunity act (AGOA) and she continues to work with global businesses as president of the Whitaker Group. She tells David W. Smith how she found a calling and how Africa can remove the final obstacles to growth.

When Rosa Whitaker was a small child, she asked a question no adult knew how to answer: If so many people are poor, why can’t we just print more money? She simply couldn’t understand why the wealthy could not find solutions to the problem. She jokes now that the desire to print money made her a lifelong Democrat, but her passionate desire to eradicate poverty has never left her.

As a child, Whitaker did not have to go far to see terrible poverty. It was enough to walk out of the front door in her working-class area of Washington. “In my community there was abject poverty and I always felt there was something inhumane about it,” she said. “I have always felt we can conquer poverty by providing people with inspiration and support.”

Whitaker witnessed at first hand the cycle of poverty of children born to parents who were drug addicts. It informed her belief that society has a responsibility to ensure disadvantaged children have an equal chance. “You pay at the front end to solve the problem, or you pay at the back end, and prison is much more expensive. All my life, I’ve taken these early beliefs and values and brought them to my work in Africa. Whether in the US or Africa, it’s the responsibility of society to build the community. I believe everyone is born with a calling and that was mine,” she said.

Whitaker’s values have not changed one bit throughout a long career. Now in her seventies, she works as hard as ever at the head of the Whitaker Group. Most of her time is spent in Accra, Ghana, where she lives with her husband, Archbishop Nicholas Duncan-Williams. But she still spends around 40 per cent of her life back in the US.

It’s been an incredible journey from a poor suburb of Washington to her status as one of the most influential figures in the political and economic life of a continent. But it all began when a highly intelligent child with a voracious appetite for learning won a college scholarship that changed her life. After bachelor’s and master’s degrees from the American University in Washington DC, she did further studies in the UK and Italy. At 28, she was already the Executive Director of the Office of International Business for Washington DC. In a hint of what was to come in a stellar diplomatic career, she began initiating projects to support Africa’s business development.

Whitaker became the first Assistant US Trade Representative for Africa in the administrations of Presidents George W. Bush and Bill Clinton. In this capacity, she developed and implemented the African Growth and Opportunity Act (AGOA), a monumental achievement that will always define her career. Signed into law by President Bill Clinton in 2000, AGOA marked a radical change in the US attitude towards Africa. “Before AGOA we had a trade representative for every region of the world except Africa. We didn’t see it as a worthwhile trading partner. AGOA changed all that by shifting policy from a focus on aid to a focus on trade and investment. It was a move from paternalism to partnership,” she said.

Enterprise solutions

Whitaker has always believed that enterprise solutions are the best way to lift countries out of poverty and the astonishing achievements of AGOA support her view. Since its inception, Africa has had the most preferential access to the US market of any region in the world and two-way trade has tripled. Under AGOA, the US now imports four times as many goods as before and it has created 1.3 million jobs directly and indirectly in Africa.

The Act gave greater autonomy to African people by allowing them to help draft the legislation. Even African countries that have not directly benefited from AGOA are now advocating for its re-authorisation. “There’s a pride of ownership and that’s the way policies should be. For too long, aid has been leading the African vision, instead of an African vision leading the aid” said Whitaker.

She remains deeply suspicious of the dogma that aid offers the best solution to developing world problems. Over the past 50 years, the US has invested around US$330 billion in aid in Africa, but Whitaker says that only about 40% of it has actually hit the ground. “No country has moved from poverty to prosperity through aid. There are parallels with the community I grew up in, where I never saw anybody move from poverty to prosperity through welfare,” she said. “Welfare and aid are important as transitory vehicles. But what has developed around Washington and London is a massive aid-industrial complex. The truth is, I don’t know anywhere in the world where beggars are respected. People have to be treated in dignity of their existence.”

Rosa would like to see comprehensive investigatory work of the proportion of aid that reaches its target and the amount spent on huge overheads. The NGOs, she says, contrive to maintain the moral high ground. They undertake investigations of nations and governments whilst remaining immune to scrutiny themselves.

“They are forever evaluating others but who is evaluating them? How do they account for all the money with tangible results? It’s not easy to investigate them, however. They do intimidate and I’ve not seen too many people crack the aid bureaucracy. I applaud them for being well organised and some of them do very good work. But their main goal should be to enable trade and investment. They should be trying to work themselves out of business and I don’t see that.”

Even when aid arrives, it is often wasted. Millions of dollars of aid money, for example, have been spent on educating farmers about rice production. An endless parade of patronising experts has arrived from the West to give lectures. “The African farmers say they don’t need education, they need irrigation,” said Rosa. “Some of the large agricultural companies say they’d make private sector investment if the irrigation issue could be solved. But the aid system is so constrained that it won’t approve money for irrigation. Aid should be a catalyst to unlock these kinds of things but it’s often just not smart enough.”

The familiar narrative attached to aid is one of a weak continent that needs the help of stronger outside agencies. Although the image of Africa has changed enormously, there is a long way to go in transforming these negative perceptions. The problem, Rosa believes, is that Africans are not shaping their own image sufficiently. “With technology they can do it but their story is largely told by outsiders. I don’t see why we cannot have an African version of Al Jazeera. We need more platforms where Africans are telling their own story and leading the global narrative about the region. If we had that, there wouldn’t be so much focus on aid.”

AGOA’s successes have helped to change perceptions but Rosa would like to see more commitment to Africa from the Obama regime. Without the personal authorisation of the US Presidents Bush and Clinton, AGOA would never have been authorised, she says. Now, all the talk is of re-authorising the Act, but that’s not enough. Africa has moved on.

“The same Clinton people are working for Obama and they don’t realise how much Africa has changed in a decade. They need to take a comprehensive new look and engage Africans more in dialogue. It’s so important to meet and listen. But Obama has not made the calls to his congressmen to make it happen. I’ve been a little surprised and disappointed by the lack of initiative,” she said.

“What has developed around Washington and London is a massive aid-industrial complex. I don’t know anywhere in the world where beggars are respected. People have to be treated in the dignity of their existence.”

Rosa Whitaker

Tax incentives

Rosa says Obama needs to put his stamp on AGOA. She favours introducing tax incentives to encourage US companies to invest in non-oil and non-mineral sectors of the African economy. “You tell them that if they invest in those sectors they can repatriate profits back to the US. It would bring in so much investment and it could be done in areas that won’t damage the US economy, such as cocoa and coffee. Investment moves by incentives.”

Both parties in the US Congress, she maintains, would support such moves. The development of African trade is one of the few issues they agree on. At the time of AGOA’s inception, the Republican speaker, Newt Gingrich – who wrote his dissertation on African education – took the unprecedented step of appearing before a congressional sub-committee to support an initiative in Africa. Equally, the Democratic champion of the region, Jim McDermott, once worked in the Peace Corps in Africa. “When it comes to Africa you get surprising, unnatural allies. There’d be support for tax incentives from both the Republicans – as they always approve of lowering taxes – and the Democrats, who would see the benefits in lifting people out of poverty.”

Despite the achievements of the Bush and Clinton years, by 2003 Rosa felt she could do no more policy wise and decided to set up a private consultancy to help global companies make AGOA’s principles a reality. The Whitaker Group operates at the nexus between African governments and businesses. Governments are not clients, but they get advice about incentivising investors. Companies learn the ins and outs of trading in Africa.

The Whitaker Group is no ordinary business consultancy, however. If it were, it would simply lend its services to the highest bidder, but Whitaker cares too much about Africa for such a superficial approach. Potential clients are vetted carefully and must value Africa’s development as much as she does.

“For us, it’s just not exciting to have clients. If they just want to make money, I won’t work with them. I can’t get up every day for that. To make money it’s enough to just build houses and sell them. We work with companies that bring transformation through enterprise. So, we have a global consumer product company that is training women and bringing local entrepreneurs into the supply chain and we work with a global infrastructure company that is training an army corps of engineers so they can help close the infrastructure deficit in Africa.”

To date, the Whitaker Group has facilitated US$3 billion in investment in Africa. And that’s a conservative estimate. But there is much more to come because the potential for growth in certain sectors of the African economy is so immense.

“When you look at the expanding consumer base in Africa, fast-moving consumer goods will definitely grow and we want to see as much production taking place as possible in Africa. Ideally, it would use as many African primary raw materials as possible, as much African labour as possible and as many African SMEs as possible in the supply chain,” she said.

Energy is another remarkable opportunity. African countries know that infrastructure has to be a major priority if they are to reduce the cost of doing business. By 2025 they will have spent US$180 billion to solve the problem and are showing a real appetite for innovative public–private partnership mechanisms. Meanwhile, the African IT sector has been transformed. Africa now has three mobile phones for every four people and the growth of internet penetration between 2000 and 2011 was more than 2,500% compared to the world average of 480%. “African countries have beaten the world in terms of mobile phone technology. We’ve seen innovations such as M-Pesa and mPedigree. All this innovation is connected to the highest rate of urbanisation in the world. Cities are emerging as hot spots of economic growth.”

“The African farmers say they don’t need Education, they need irrigation. But the aid system is so constrained it won’t approve money for irrigation. Aid should be a catalyst to unlock these kinds of things, but it’s often just not smart enough.”

Rosa Whitaker

Three obstacles

Three large obstacles remain, however, that are preventing Africa from fulfilling her vast potential. The first one, Whitaker says, is that African nations need much closer integration. This is an especially important consideration in a continent with so many land-locked nations. The economist Paul Collier has pointed out that 3% of the global population live in landlocked areas whereas in Africa the figure is 30%. It is one of the main structural reasons for widespread poverty.

“It’s the most Balkanised region in the world. The way it was carved up according to a colonial model makes no sense, but if you redraw lines you get major wars. So it’s better to develop strong regional ties that are fully integrated, economically and politically,” said Whitaker.

“Who wants to invest in small markets? Some of the states in Africa are so small they shouldn’t even be countries by the normal definition. And they have no access to ports. Sometimes it costs more to transport goods between African neighbours than it does from China. Unless they are integrated, they will never make it.”

Greater regional integration, she says, would mean the harmonisation of currencies and security forces. It would also mean acting with one voice on trade at international meetings. “Right now, there are so many flags and Your Excellencies and Honourables, it’s very difficult. It’s much easier when African countries harmonise their positions.”

The structures for closer integration exist already but the nations need to make it work better. As in the European Union, they have to address the concerns of nations that feel they would be losers in a more integrated system. “I think we’re seeing more of this integration in East Africa than anywhere else and I applaud that. The rest of Africa needs to catch up,” she said.

The second of Whitaker’s three principal obstacles to development is the lack of strong leadership. This extends from presidential level down to community level. The third obstacle is human development. “You can have the right policies but if people don’t have access to good education, clean water and health services, you’re addressing the ‘what’ but not the ‘who’. We should never lose sight of the ‘who’.”

An example of this danger came a decade ago in the small landlocked kingdom of Lesotho which is totally surrounded by South Africa. Rosa spent lots of time helping Lesotho to build its textile industry. It became Africa’s number one exporter of apparel under AGOA, an astonishing result for a nation of two million people. But the reality was that one in three workers was HIV positive according to a 2005 estimate. In effect, factories had to hire two workers for every job, a threat to the sector’s success. “A UK charity helped out with HIV clinics and testing in every factory and we got on top of the problem. But it illustrates the importance of addressing the human element,” she said.

If these three obstacles to progress – greater integration, stronger leadership and building human capacity – can be addressed, Rosa believes Africa will accelerate towards a brighter future. “I’m a big Bono fan. I’ve been in Africa with him and he has a huge heart despite some media reports. I believe that, as Bono says, we can Make Poverty History. All the governments and peoples should look for a role they can play in changing this landscape. It’s the last frontier and we have a responsibility to converge Africa with the rest of the world.”

“Africa is the most balkanised region in the world, so it’s better to develop strong regional ties that are fully integrated, economically and politically.”

Rosa Whitaker

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