Obama Administration Africa PolicyJuly 29, 2012
How Things Are Fast in America but Slow in MalawiAugust 4, 2012
And the news that is conveyed in these publications is getting better by the day, especially about the huge transformation that is taking place in Africa, thanks in some measure to investments from world powers such as the U.S. China, India, and Brazil.
“Driving this transformation are abundant natural resources, more sophisticated management and increasing trade,” according Fortune magazine.
What’s the point here?
The Chinese, especially, have been doing business in African countries “aggressively” for the past two decades and are now reaping the benefits, reports show.
China’s government and entrepreneurial ventures in Africa are massive and range from the construction of roads and bridges, and telecommunications projects, to the offering of generous aid packages and loan guarantees to African governments and businesses.
Let’s look at one news story, U.S. Companies Race to Catch Up in Africa, published in the business section of the Wall Street Journal on June 2, 2011.
According to the authors of the story, James R. Hagerty and Will Connors, “U.S. companies’ game to catch –up shows the perils of waking up late to the next big frontier market, Africa.”
That frontier market, they estimated, was forecasted to grow to 2.6 trillion in 2020, from 1.6 trillion in 2008. That’s within a span of 16 years.
The point here is that America was missing out on the business that was going on in many of the African nations referenced in the story. The countries included Botswana, Mauritius, Ghana, Ethiopia, Sudan, Libya, Nigeria, Namibia, Angola, South Africa, and others.
The writers then alluded to the rush by Caterpillar, Harley Davidson, GE, Walmart, and many others to enter African markets and establish a foothold there.
“While most U.S. companies focused international expansions on Asia and Latin America, China was leapfrogging in Africa,” the article went on. Not only did America take its eyes off Africa, but, “Western European companies, many of which had lingering business interests in Africa from colonial days, also took off their eye off the ball.”
Essentially, the Chinese were all over Africa, the story insinuated, based on what they had been doing for some time.
The big caveat to the Chinese presence was that there were little or no strings attached to doing business with the people and governments in Africa they selected. “Many of Africa’s one-party national governments find it easier to deal with the Chinese government,” The Wall Street Journal story stated.
So, there is now plenty of Chinese money and influence floating around in Africa, one could surmise. Recently, at a summit in Beijing with 50 African leaders present, China pledged $20bn in credit to African nations over the next three years. China has eclipsed the U.S. as Africa’s biggest trading partner, the South African Mail Guardian reports.
While this trend continues, it is becoming a source of great concern to the United States, according to The Associated Press.
Which underscores some of the reasons for U.S. Secretary of State, Hilary Clinton’s six nation tour of Africa in August, “warning about the potential perils of Chinese investments,” AP stated.
“The United States is increasingly concerned about China’s growing interest in Africa, the result of its massive demand for energy and natural resources to fuel its exploding economy. U.S. officials, including Clinton, have in the past expressed deep reservations about China’s practice of setting up huge infrastructure or other building projects, employing only Chinese workers and ignoring human rights and democratic principles.”
According to the AP story, published in POLITICO:
“Without mentioning China by name, Clinton will urge African leaders to carefully consider projects proposed by foreign countries that do not demand complete accountability and may encourage corruption to the detriment of the people of some of the world’s most impoverished nations, according to the officials who spoke on condition of anonymity because they were not authorized to preview the speech.”
In a piece relating to Clinton’s tour of Africa, The U.K. Guardian carried the following headline on the subject:
“Hillary Clinton launches African tour with veiled attack on China”