Wed, Aug 06, 2014 page9

• US starts to woo Africa as a market to compete with China

  • By Peter Martell / AFP, NAIROBI
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  African leaders head to Washington for a landmark US summit this week, with US President Barack Obama hoping to boost trade, development and security ties amid growing competition from China on the continent.

  China overtook the US as Africa’s largest trading partner five years ago, with Beijing’s trade now worth more than US$200 billion a year, double that of Washington.

  However, while the US is playing catch-up, experts say it is wrong to view the situation as a direct competition between the two powers, since China’s investments potentially boost US trade and their companies are focused on different sectors.

  “The Obama administration has come under increasing pressure from the commercial sector to prioritize Africa policy. This US-Africa summit is more a response to this than a direct beauty contest with China,” Alex Vines from Britain’s Chatham House think tank said.

  The IMF says Africa is now growing faster than Asia.

  “Africa now is a land of competition of Europe, America, China and even some Arabian countries,” African Union director of economic affairs Rene Kouassi said.

  GROWTH

  The US has been keen to avoid any suggestion that the three-day summit that opened on Monday — dubbed the “largest single engagement” by any US president with Africa — is designed to challenge the role of other nations in the continent.

  “We welcome the attention Africa is receiving from other countries like China, Brazil, India and Turkey,” the US State Department’s Bureau of African Affairs spokesman Will Stevens said.

  Although 50 heads of state were due to take part in the summit, several, including Sierra Leonean President Ernest Bai Koroma and Liberian President Ellen Johnson Sirleaf, have already said they are not planning to go because of the ongoing Ebola epidemic in their countries.

  The US, the world’s largest economy, is only Africa’s third-largest trade partner after the EU — some of whose members have post-colonial ties with African nations — and China, which is hungry for the continent’s natural resources.

  “We believe the more the merrier, but we also think that African countries should make sure that their relationships benefit their people — and that they add value, not extract it,” Stevens added.

  Redefining relationships with the continent will be key, analysts say.

  Africa is home to seven of the world’s fastest-growing economies. Many hope to alter an image of a war-ravaged continent where foreign relationships are based on aid alone.

  “The focus is no longer on aid, on humanitarian assistance... it’s long overdue, that we move this relationship to the economic sphere, where it can be almost a partnership,” Kenyan Foreign Minister Amina Mohamed said. “Africa still offers the best returns to any investor.”

  RELATIONSHIPS

  James Shikwati, director of the Kenya-based economic think tank the Inter Region Economic Network, argues that Washington is trying to “reframe” engagement with Africa given that the “new competitor China” has been “very visible” with large-scale infrastructure projects.

  “China’s massive infrastructure projects kind of dwarf the American effort,” said Christopher Wood, from the South African Institute of International Affairs.

  “I think we are seeing increasingly an effort by the US to try and get back into that game, for example, attempts to develop energy capacity on the continent,” he added.

  While past US engagement has focused on “talking about democracy and human rights,” Shikwati said he expected Washington would now “temper that with some solid projects that a camera can capture... like some big dam that supplies power.”

  Others argue it is wrong to exaggerate economic competition between Washington and Beijing.

  “This oft-repeated and inaccurate platitude misrepresents both current geopolitical realities and commercial opportunities,” said Dane Erickson, from the University of Colorado, writing in American Interest magazine.

  COMPETITION

  The two nations often focus on different economic sectors and it is in fact EU nations that offer the larger challenge.

  “A more sober analysis of two areas of focus for the US-Africa Leaders Summit — trade and investment, and security — shows just how much how US, Chinese, and African interests align in key policy areas,” Erickson added.

  Indeed, he argues that China’s role may actually boost trade for the US.

  “Chinese infrastructure investments — on a continent in dire need of more roads, bridges and ports to support growing economies and populations — can benefit Africans, Americans and other foreign investors,” Erickson added.

  “It is becoming increasingly difficult for an international executive to do business in Africa today without driving on a Chinese-constructed road, meeting in a Chinese-built conference center, or shipping materials on a Chinese-made railway,” he said.

  For Africa, competition on the continent in the “quest to grab the African pie” offers opportunities as well as risks, Shikwati argues.

  “Competition gives African countries the leverage to negotiate and get what they want,” Shikwati said, while also recalling the warnings from history that foreigners can end up “cutting the pie for themselves.”

  Additional reporting by Susan Njanji
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