US-Africa Summit: Checkmating China?
August 6, 2014 <http://www.herald.co.zw/author/silence/> silence muchemwa
<http://www.herald.co.zw/category/articles/international/> International
Wanjohi Kaburukuru Correspondent
THE story of Africas unpredicted growth has been the refrain of the past
decade. But in addition to the impressive GDP growth figures of late,
reports such as the 2011 African Development Banks (AfDBs) The Middle of
the Pyramid: Dynamics of the Middle Class in Africa reveal that Africas
middle class tripled in the last 30 years to reach 313 million people in a
population of 1,1 billion
The increase in high net-worth individuals was also captured in this report
which noted that by 2008 some 100 000 African nationals had a net worth of
US$800 billion.
According to the AfDB, Africas economic growth was 4 percent last year
(compared to a global rate of 3 percent) and foreign direct investment is
set to increase and will surpass the US$43 billion reached in 2013 by the
close of 2014. The World Bank says that this increase will be largely due to
natural resources, notably new oil and gas finds in the western Indian Ocean
rim covering Somalia, Kenya, Seychelles, Tanzania, Comoros, Mozambique and
Madagascar and the southwest African coastal belt of Namibia and Angola all
the way to Nigeria.
It is these impressive money-linked statistics that are the core of
discussions at the US-Africa Leaders Summit. The agenda itself is revealing.
The key areas of discussion in Washington will be trade and investments,
peace and security and general development plus tapping the demographic
dividend of the youth. According to the US Secretary of Commerce Penny
Pritzker, the US will be seeking to invest in agriculture, infrastructure,
finance, consumer goods, electricity and ICTs in Africa.
In calling for this meeting the US has simply used a well-known script
perfected by China, Japan, India, Korea, Turkey, Kuwait and lately the
European Union (EU).
China is the author of this script. It lays out red carpets and hosts
African leaders in Beijing. More than the red carpets, lavish military
parades and fancy dinners under chintzy chandeliers, African leaders leave
the Great Hall with huge development cheques and one-on-one meetings with
top Chinese leaders.
The Chinese led the pack a decade ago and outfoxed their competitive Asian
neighbours in seeking to win over Africa. Sinohydro, CNOOC, SINOPEC, China
Road and Bridge Corporation (CRBC), and China Wu Yi are now household names
in Africa.
Infrastructure touching on airports, roads, railways, ports, waterworks have
seen the Chinese almost taking a major part of what was once the preserve of
the UK, France, Portugal, Italy, Germany and the Dutch who colonised the
continent.
The Chinese were evidently rewriting the rules of the game that was once a
monopoly of the US and Europe.
In July 2012, during the China-Africa cooperation summit, then Chinese
President Hu Jintao made a pledge of US$20 billion as a credit facility to
Africa, due to cover the period 2013 to 2015. His successor, President Xi
Jinping, reiterated this promise when he visited Tanzania, South Africa and
the Republic of Congo in March 2013.
And in the same year some 170 special forces of Chinas Peoples Liberation
Army (PLA) were for the first time in history dispatched for a UN
peacekeeping mission in Mali. The PLA Navy has also dispatched over a dozen
fleets to escort cargo and oil tankers in the volatile Gulf of Aden. These
moves by the Chinese have rankled its competitors.
Just like China, Japan has also been keen to adhere to the principle of
reciprocity. In January this year Prime Minister Shinzo Abe visited
Mozambique, Ethiopia and Côte dIvoire, which was in line with what he had
said at the TICAD conference.
Africa will be a growth centre over the next couple of decades, Abe said.
According to the US Energy Information Administration (EIA) Japan is the
largest importer of liquefied natural gas (LNG), and the third largest
importer of oil after the US and China. Abes visit to Mozambique, which is
a new frontier for LNG, could not have come at a better time.
In what appears to have been a bidding game at an auction over resources,
haggling between Japan and China has intensified. Seeing that the Japanese
had offered more, the Chinese sweetened their deal when its Premier Li
Keqiang came calling and visited Ethiopia, Kenya, Nigeria and Angola in the
middle of this year. Keqiang said that China was topping up the $20bn it had
offered initially with an extra $14bn and the China-Africa Development Fund,
which had a kitty of $3bn, was also increased to $5bn. So how does the US
compare?
Going back some two decades ago, it is surprising to note that the US had a
head start in Africa. All that the Chinese did was reinvent a US idea to
suit its interests. It has worked for Beijing at the expense of Washington.
For the last two decades the influential US Corporate Council on Africa
(CCA) has been hosting biennial US-Africa Business Summits. The 9th biennial
summit held last year in Chicago discussed infrastructure, finance,
agribusiness, capacity building and ICT. In other words the US is no
stranger to this kind of arrangement, but this was limited only to the
private sector.
In the year 2000, then US President Bill Clinton signed the African Growth
and Opportunity Act (AGOA) whose objective was to stir economic growth and
increase US trade and investment in Africa by encouraging some 40 African
nations to export their goods to the US with no tariff inhibitions.
Another aim of this law was to boost Africas integration into the global
economy. Incidentally, to be eligible to participate in AGOA certain
conditionalities, notably labour rights, a commitment to corruption, poverty
reduction and freeing up of their respective markets had to be met. AGOA
has been in existence for 14 years and its successes pale in comparison with
Africas trade with the Far East.
In 2013 Chinese-African trade surpassed the US$200 billion mark for the
first time, making China Africas biggest trading partner, President
Jinping said in early February. Premier Keqiang has pledged to push this
figure to US$400 billion by 2020.
According to the office of the US Trade Representative the two-way trade
between the US and Africa totalled US$63 billion. Just how did China redraw
the rules of the game and become an active player in Africa where the major
powers had an almost unassailable lead for close to a century?
Fifty years ago nobody would have anticipated that China would offer a
counter-balance to the US. Matters have taken a new twist especially with
the entry of the BRICS (Brazil, Russia, India, China and South Africa), all
of whom are flexing their new-found wealth and economic muscle to
reconfigure a new global economic order. NewAfrican magazine.
Thé Mulindwas Communication Group
"With Yoweri Museveni, Ssabassajja and Dr. Kiiza Besigye, Uganda is in
anarchy"
Kuungana Mulindwa Mawasiliano Kikundi
"Pamoja na Yoweri Museveni, Ssabassajja na Dk. Kiiza Besigye, Uganda ni
katika machafuko"
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