Joined by Senator Chris Coons and Congressman John Carney, I recently met with Paul Sullivan, head of International Business Development at Acrow Bridge, to learn how the company has grown its U.S. workforce four-fold by expanding export sales. Acrow is a 60-year old small business exporter to Africa and EXIM Bank customer based in Parsippany, New Jersey. Paul relayed a story that Acrow’s CEO Bill Killeen tells to employees about a trip deep into the countryside of Ghana to see one of the modular steel bridges that they have installed there—the same kind they will soon deliver to Cameroon and Zambia thanks to EXIM Bank financing that was approved earlier this year. An elated tomato farmer stopped them near the new bridge to explain that it used to take him ten hours to get to a place where he could get his tomatoes across a river, causing 50-60 percent of his crop to rot in the baking sun on its way to market. With the new Made-in-America Acrow bridge, his journey has now been shortened to just ten minutes, meaning he can sell more of the tomatoes he grows, and more earnings can make it into his pocket.
What do those expanded profits and additional time mean for that farmer? They mean more fields under cultivation, more jobs for workers in his village and more time and resources for his family’s children to attend school. The bridge also represents good-paying manufacturing jobs here at home. These jobs are in communities across the country—communities like Milton, PA and New Castle, DE, where Acrow manufactures and galvanizes its bridges. The story is but one example of how the wave of infrastructure investment we’re seeing in Africa can also move America’s economy forward.
American exporters and workers have a tremendous opportunity to benefit from the economic growth that many of Africa’s economies have experienced in recent years. In fact, six of the ten fastest-growing economies in the world were located in sub-Saharan Africa in 2014. Financing, however, has remained a complex challenge for U.S. companies—large and small—seeking to tap into African markets. U.S. exporters and lenders have often needed EXIM Bank insurance or loan guarantees to have the confidence to move forward with export sales in Africa. EXIM Bank financing has also been needed to level the playing field when U.S. companies face off with competitors backed by their own governments’ official export credit agencies. Today, many infrastructure projects in Africa simply don’t happen without export credit agency involvement.
However, after 81 years without controversy and the bipartisan support of the last 13 U.S. presidents, EXIM’s authority has been allowed to lapse. A few vocal opponents in Congress have taken away a vital set of tools for American exporters like Acrow—companies that are looking to grow by doing business in Africa and the rest of the developing world, where two-thirds of EXIM transactions took place last year. Not only risking U.S. jobs, EXIM’s lapse could also have the result of ceding opportunities for African infrastructure investment, as well as our broader economic leadership, to countries like China. Specifically, Chinese official export credit has dramatically increased in recent decades and Chinese companies are excited about stealing sales opportunities created by the absence of EXIM financing.
Just a few days before EXIM’s charter lapsed, a senior official from one of China’s versions of the Export-Import Bank told reporters that EXIM Bank going away would be “a good thing” for China. A few weeks ago we learned that another American exporter, General Electric (GE), is at risk of losing a major locomotive project in Angola because of EXIM’s lapse. The project could lead to even more infrastructure projects for U.S. companies and, according to GE, this project alone is expected to generate 1,800 U.S. jobs across 12 states and throughout the company’s long supply chain. Furthermore, after such a sale, service, replacement parts and maintenance contracts over the lifetime of the locomotives can create the same number of U.S. jobs for years to come. But China’s state-owned locomotive manufacturer, backed by cut-rate state-sponsored financing, is stepping in to win that deal and those jobs. And it’s not just China that could be using EXIM’s lapse to grab sales from American businesses and workers. There are 85 export credit agencies around the world (or 84 now that EXIM has lapsed) fighting for a piece of the pie for their own countries’ businesses and workers when it comes to African infrastructure investment. EXIM’s lapse will make it even harder to catch up to the EU, which exported nearly five times what the U.S. exported to Africa in 2012, and China which exported more than double what American businesses did that same year.
African governments, businesses and consumers want to buy quality American goods. They want to forge closer economic bonds with the United States. With tools like EXIM, we can better ensure that free market factors like price and value aren’t relegated to the sidelines by bargain basement financing. More economic engagement also brings American values like transparency and stewardship to the continent’s economies, encouraging African nations to adopt our ways of doing business instead of those of other nations.
American businesses have an opportunity to get in on the ground floor and build a solid foundation for African economic growth and stability, while supporting thousands of jobs here at home. From power projects and transportation infrastructure—like bridges—to agricultural equipment and consumer goods, prospects for mutually-beneficial prosperity continue to grow. President Obama and a bipartisan majority in Congress understand how EXIM Bank bolsters greater economic engagement in tougher markets like Africa. The President’s trip reinforces that fact and the risks to America’s global economic leadership that come with a lapse in EXIM Bank’s authority.
Fred P. Hochberg is Chairman and President of the Export-Import Bank of the United States.