Frank Garcia, Asst. Sec. of State for African Affairs, on Future of U.S.-Africa Commercial Diplomacy

Frank, thanks so much for joining us. >> Oh, thank you. This is really an honor to be here and to see old friends, new friends, young friends, and everyone in between. Yeah. Thank you. >> I would love for you to kick us off today with how has your first uh couple months in this role been? You've been incredibly busy. >> Yeah. Yeah. Well, no, thank you. I, you know, I appreciate that and and I also appreciate CSIS's leadership, you know, on this front and the challenge that was laid down by CSIS. um three days after I took over as the assistant secretary and and it was a it was really you know kind of an awesome article that came out and said hey Frank's got to get it in gear which was which is which is awesome I actually I actually loved it and if it's okay with you I' maybe I can respond and so um respond to this so you know I have the mic I get to do this right so before we jump in the discussion I want to thank thank thank you for this piece and and I mean I did write it >> genuinely. You're CSIS. You know, you get you get to wear it. Um, so, you know, as you might recall from this article, it suggested about a half dozen near-term steps I should take. And I'm happy to tell you that I've taken them and more. So, first and foremost, Bureau of African Affairs has signaled seriousness on trade, which is instrumental to this assembly that you've brought together today. So, I'm I'm grateful for the opportunity to participate. Um last week in my second trip to the continent um visited Zambia, Ethiopia and Kenya and each of those countries the overriding message was our emphasis on commercial opportunities um and and framed within our overarching trade not aid policy. So I think that that's that's key. Um in Ethiopia we're moving several deals in a positive direction. We're deepening agricultural uh food security partnership. Um, you might even have seen my tweet when I was on a John Deere tractor with two thumbs up. It was really fun to be at the end of this assembly line, you know, there in Ethiopia on a John Deere tractor being able to start it for the first time. There was something that was kind of like you feel like a proud dad in some ways. Um, not that my kids were not born green, so just just to be clear. Uh we also have an opportunity to expand the US Ethiopia aviation relationship and the United States is you know instrumental in helping the Ethiopians take off pun intended with their uh aerospace industry. Um there's a new airport that they're designing there in Kenya. I had a chance to meet with President RTO and um them developing their mining sector is absolutely instrumental and one of the things that um I had a discussion with him on is United States made a decision early on that we weren't necessarily going to be the miners but we were going to be the technology leaders in going after the the minerals. And so I think you know in that strategic pause which was one of the reasons I was interested in talking with you um in that strategic pause we have invested pretty heavily in the technologies to get after kind of the refining phases and we'll talk about that maybe a little bit later on. So I think that was a very much a positive thing. Um as also suggested in this article we've engaged our African partners early and directly. So I've met with um you know basically heads of of of many of the countries uh and u so six countries so far um and then in terms of measurable benchmarks which was um uh which was one of the challenges so we have a tracker um our team compiles this tracker we have our deals in there we have brought together under this administration uh with secretary Rubio's leadership um basically disperate pockets of deals that were being tracked across across all the different parts of the state department have brought been brought together into one portal that allows us to have view across all of the state department where we are pursuing these commercial deals. So it was a great idea and it was an idea that uh Secretary Rubio you know had put into practice and uh we're driving that really hard. And then you know finally in terms of um addressing diplomatic ballast and and and and I take this as like okay the administration perhaps wasn't moving as fast as we would like uh in terms of ambassadors. You know I respond to that by we have career diplomats that have been um you know working in Africa for 20 to 30 years. They may not be uh chief of mission at the ambassadorial role, but they are consumate professionals and I have absolute confidence in them and their ability to do the job and I've had the chance to see them uh carrying that out. But on that um on that front we have um two this week. Somalia and Djibouti were announced just this week and then the Senate is starting to move forward with their uh in terms of Benin Gabon Kenya and Togo uh confirmation hearings this week and uh our nominee for Cabo Verde was uh had her hearing yesterday. So we're we're moving we're moving ahead aggressively on that front and I I actually do I read these things. I appreciate them. Uh my my skin is thick. Uh maybe not as thick as my skull on sometimes, but that's okay. Anyway, but but thank you for the opportunity, >> Frank. And thank you so much for your leadership in the space. You've accomplished uh an extraordinary amount in a short time, and you've certainly been a lot of places. Now, you uh came into this role with a long history on the continent that maybe not everyone in this room knows about. Could you tell us a little bit about what first drew you to Africa and how that path led to where you are now? >> Sure. No, thank thank you for the question. So, um, in in one of my earlier careers, um, I was a naval officer on board a ship and the ship was operating in North Arabian Sea and, uh, in and around the Straight Hormuz, heard that name recently. Um, and um, you know, and and so we've been operating in there for for quite a while. Um, while off station from the North Arabian Sea and the Straight of Hormuz, we had an opportunity to do a port call in Mobasa, Kenya. And um and it was really I think it was a combination of having been at sea for quite a while, but most importantly um the people that I met there were friendly. They were you know kind of innovative. They were kind of driven um and very very welcoming to us as sailors. I said there's something very special about this place. And that kind of sparked my interest. and in the intervening um decades I won't count how many um the you know I continued to to go back to different places across Africa and then while um while on the House Permanent Select Committee on intelligence um I had the opportunity to kind of select the area in the world that I wanted to specialize in and it was real clear to me what I wanted to focus on. So I wanted to focus on the intelligence underbelly of Africa, the continent and all of the issues that uh that make the continent great and some of the issues that hold the continent back with regard to security. Um and so uh for for many many years I've had that opportunity and so that kind of brought me to to the point where um when this opportunity came forward I was ready to jump and have been enjoying it >> and well placed for this event. I recall you blew something up in a mine in Rwanda once. >> Indeed. Yes. Yeah, that was that was actually a lot of fun. I had an opportunity to travel with Ronnie Jackson who uh has been, you know, kind of a longtime travel uh partner. Um he's the uh the chair of the intelligence special operations uh subcommittee on HS on the House Armed Services Committee and uh also very much an Africanist. Uh we were in a um not in the mine at the time, but we were outside of a mine in Rwanda and um and this is I think Trinity Metals and they gave him the the detonation plunger. I think it was actually like it it was actually a plunger. Um and so there we stood outside the mine and you know you can imagine all of the kind of nervous faces from you know the company leadership there. Okay, a member of Congress is going to detonate this shape charge and we're going to hear a big boom and you know and and you know new minerals are going to come gushing forth. So he yells fire in the hole. [laughter] Nothing. And I'm scanning the faces of of you know the sea the seauers that were there. Nothing happened. And he's like uh and they're like try again. Try again. [laughter] So he yells fire in the hole. presses the plunger, waits, boom, the the deep thunder and you could just see people kind of melting like, "Oh, thanks be to God, [laughter] you know." So, I think everyone in the sea suite kept their job. Um, but it was it was really it was fun to be there and to see um, you know, to see what Rwanda was doing on that front, what Trinity Metals was doing and uh, and actually go down into the mine and and get dirty and muddy and watch the, you know, watch the mining crews uh, doing their job. It was um, really fascinating. It was really, you know, the first uh, mine of that sort that I've been in. So, I'll go in more. You never learn more lessons than when you are right at the rock face of these operations. >> Frank, I want to shift a little bit. We hear a lot about a new era of US Africa relations. What actually makes this era different? >> So what what is you know in this administration what we're doing that I think makes it very very different is you know the aid to trade moniker is is not just a nice rhyme. It's a reality and that reality is instead of you know kind of dropping off you know kind of uh relief aid which is wonderful in terms of saving some lives the focus now is very much on kind of commercial opportunities that actually can be sustained and spawn um further development and helping to pull countries out that choose to cooperate with us. Um, so I think that that that that drive for commercial venture um and coupling that commercial venture with aid that can also help facilitate the commercial venture. Coupling those two together is really powerful. I don't we didn't have the ability to do that before. um USAD had you know controls of you know a lot of the the throttles in terms of where the aid was going but now with this this architecture that we have you know to answer your question we've brought those two together so we can take um an aid package we can couple it with an economic an upcoming economic opportunity investment and then help do things that are you know are are local um but also at the national level help our African partners work with us to help grow uh jobs here in America and also help develop opportunities for the countries that are working with us. So, I'm really excited by that. And um and I think that that is different. Also, in terms of the health memorandum of agreement, like this is like one of those things where you'd say, why didn't we do this before? So for those of you that may not be tracking kind of the health memorandums of agreement, uh the idea here is well let's make sure that the African countries are investing in their own health programs. And so the United States took took a position on these health memorandum of agreement and we said okay we're going to be we're going to start as the biggest contributor in that but you're going to have to have some some skin in the game. And then over time, over a 5-year period, the amount the US taxpayers are going to be um carrying drops down and down and down, while the amount that the African partner is carrying increases and increases and increases. And if they default on their option year, guess what? We match the default. So it's compounded um pressure that's put on the African nation. Um and I'd have to say that's probably the second thing that is very very significant is the structuring of those health memorandum of agreement that we haven't done before. But the the the African nations that we have partnered with are ecstatic about it. And coupled with that we continue to provide um you know in like in Zambia um I was part of a a donation from the United States in len capavir which is a um a anti-retroviral drug um which requires like two doses a year for um for HIV. So, we're continuing to lead the charge on that front and uh and I'm very proud that the United States is uh continues to to be that that large the world's largest donation entity >> and it's incredible how much African country they want jobs. They want the economic growth and that does require growing the economic pie through meaningful investments. Is there a particular project that you would mark as a a good demonstration project of this new era? Uh there well there there's a couple of them. Um I I think what we're doing right now in the Libida corridor is really huge and uh and that has been you know kind of a very very big project. So for those of you that may not be tracking, libido corridor, you know, connects a lot of the mineralrich regions in um Democratic Republic Congo um with going out to down towards Angola. And all along there, what we're looking at is not just a a a pathway to be able to build refining and extraction opportunities to be shared with the continent, but we're also looking for agriculture to be to follow that whole rail line because one of the biggest challenges, you know, uh Africa is blessed with with plentiful plentiful land oftentimes, you know, plentiful rainwater, mineralrich land, and so but Now we'll have this corridor which will couple both uh our need and demand for uh rare earth critical minerals um value addition with uh with you know DRC and and Angola and then also be able to double down on it with agricultural food production. So, I think that's probably a really huge um example of um of uh a corridor in particular that um that really covers down on on both rare earth critical minerals and um and egg >> and really makes a project more bankable. It's hard to make an entire transportation corridor work on the economics of minerals, right? But if you add in manufactured goods and agriculture, you also increase the bankability of the project itself. >> Absolutely. No, with without a doubt that's no that that's exactly right and I think that's one of the things that you know one of the challenges we're perpetually facing oftentimes capital doesn't necessarily flow uh so easily into Africa um but it's when we are in I think within the state department and we're working with our partners in XM and DFC and we're working together as a team and USR we're working together as a team that the anxiety uh in terms of the due diligence phase for you know some what I'll call the US venture capital you know banking segment gets reduced tremendously and and I think that there's there's great power in that now we do things differently you know we have these different pots of money and different focuses um and I think the onus is on us in the state department to make sure we're addressing that issue which is who do we go to and how do we buy down the risk you know for the US taxpayers and to make sure the return is there but yeah bankability is absolutely key and uh and and remains a challenge for many of the projects that we're after but not an insurmountable one >> absolutely so you know one of the things we'll hear from some of our African ambassadors later today and there is a push on the continent to get more value addition out of their materials they don't want to go to the traditional model of extraction and then exporting raw materials out what uh what does US support look like for Africa's industrialization particularly on critical minerals. >> No, that that that's a great question and I I mentioned briefly in my response to the article um you know that that the United States made which was you know why I had had reached out on on what has the cycle of critical minerals in the United States look like over decades. Um and on that front um United States 15 20 years ago made kind of made a decision like okay let let China do it. We don't we didn't really care where it was going to happen because and they were manipulating the market you know really you know dropping down prices to prevent others from entering the market. Well, to some degree that was to our benefit, right? I mean, so let them lose money. Uh let let us, you know, use that capacity, still get what we needed. But then we we we woke up one morning and said, "Wait a minute, you know, China is starting to manipulate the market in a way that is threatening to US national security, unacceptable." Uh, President Trump came in, Secretary Rubio with his leadership said, "Okay, we're going to we're going to turn this around. We're going to flip the script. We're going to take this technology investment that we have invested in for the last 10 to 15 years. We're going to start deploying that into Africa. Um, in this last trip, um, I won't be specific about the country, but we have a tender that we're putting putting an offer in on and where value addition is intended to happen as part of our offering. That's what our African partners want. They want the value addition and in this particular instance I have in mind there is absolutely um you know really leading edge US company high-tech uh being able to move the mineral up the value stream and also be able to access more than one mineral that's in the value stream. In the past with the some um extractive uh work that has been done by others um there were multiple minerals that were as part of an extracted um mineral baseline. Well, they're able to make bank on each of the minerals that were in that extraction and this kind of stops that. And so I think that that gives us greater credibility and transparency with the countries that choose to work with us in that segment. >> You mentioned um how other countries do things on the continent. Obviously there's a lot of competition for these key strategic sectors on the African continent. How does the United States become the partner of choice? I I I think we become the partner choice by being who we are and and who we are is you know we do business I think in a very transparent way. I think transparency is is absolutely key. You know we we tend to be collaborative and not coercive. You know we tend to be transparent in our business processes and not opaque. And I think just that um that approach in terms of the US how we work uh it really matters a lot and it starts with something that we call like a strategic minerals framework agreement. So one of the challenges of you know of having these kind of agreements in countries that don't necessarily work with us frequently is they haven't done a lot of this with us. So how do we lower the barrier to entry? we go forward and we offer a strategic framework agreement and that framework agreement gives kind of a set of rules to guide uh follow-on negotiations that are contract specific. So I think those framework agreements help to um one improve the transparency, two it helps to establish a common set of principles that we will negotiate a contract on and then three helps us when we move into a a an offer on a on a particular tender for them to understand what we're getting. So, so it really is a way of creating an on-ramp that is, you know, again lends to that kind of transparency. >> And how do we better align US government financing behind this? [sighs] >> We scramble. I mean, it's it's it's a it's a great question. You know, um alignment is um is key. you know, one of the one of the advantages and disadvantages of having um kind of the USbacked capital in a couple of different ways um you know either within um u some knobs are controlled by USR, some by XM, some by DFC and they are a little bit different. So I think early on um looking at an upcoming project and doing that kind of initial um you know kind of I guess I'd have to kind of look at it as a dart board. What does the dart board look like for funding this particular project and what are the what are the circular rings that are you know around the bullseye for us to be able to leverage it. So, it it really is I'm not an attorney, but I'll use the answer, it depends. And um and I think that that uh that that package of financing really depends on the project. I had just before getting started here today had a um had a brief conversation about small modular reactors. Well, I that's something, you know, the US has been the world leader in nuclear power, you know, I'll say forever, but almost forever. and and our programs and our technologies in that sector, you know, are are unparalleled in the world. So like banking that takes because it's a little bit on the new side of things that we're looking at, you know, putting small modular reactors into Africa to, you know, boost electrification and also to provide sufficient power for refinement. Um, it can do both of those things, but banking that is there's a dance there. So, and I can't tell you I know all the steps to it yet. >> We're all living it out in real time. So, you know, you talk about we talk about financing. The other really powerful form of de-risisking for the United States is our embassies. We have incredible soft power that we can leverage through our embassies. And in your Senate confirmation hearing, you talked about supporting our embassies to help make it easier for American companies to do business, removing barriers to investment. How do you see our our ambassadors and our embassy playing into these strategic goals? Because they really are the ones on the ground. >> No, absolutely. And thank you for the opportunity to brag a little bit about our embassy teams. Um they've gotten the message, you know, rare earth, critical minerals, industrial capacity, shared benefit to the United States and our our host countries. Um every single almost every single officer at our embassies is is lit with this. they really are on fire and are doing an amazing job. Um, we're using we're using increasingly using tools that industry or that I use like an industry um in terms of customer relationship management to kind of build the pipeline because it is about the pipeline and so I'm doing the best I can do to run AF bureau like a business. So where we're very focused on you know on you know uncovering and discovering opportunities that gets into a a customer relationship management from there we mature the opportunity we're tied together from our headquarters to the field uh each of our embassies using a particular CRM and then when it reaches a maturity point then we bring it into our our our case manager that gives us the ability to track it to close and then and then book And and thus far um since the start of this administration, we have booked uh about 60 deals and we've closed about 26 billion dollar worth of revenues for the United States of America. I'm very proud of the the work that uh that the teams have been been doing there >> and our embassy speaks so highly of the support they are getting from you and the Africa Bureau in Washington. And that's an incredible bridge to to close. Um, Assistant Secretary, I have one last question for you. A year from now, what is the headline that you want to see out of this bureau? >> Okay. Um, [laughter] wow. What would that What would that be? I I I would love I would love for that um to be you know something along the lines of um you know I mean bet on USA number one but uh you know kind of maybe America and African economic partnership making both great again. How about that? >> I love that and I'm so excited to hear from the Alcoa CEO later today about their investment on the continent. >> I'm I'm looking forward to actually meeting with them as well. So yeah, thank you so much for this opportunity. This is really great to to sit down and chat like this. >> Thank you so much and thank you for setting the strategic tone of the day today and laying out how the US government and the state department are thinking about that more commercially focused partnership and I'm so grateful for your leadership on this agenda and really excited to see what the you and the team continue to do beyond you know your first few days and first few months. Please join me in giving the assistant secretary a round of applause. [applause] >> [music]