China’s influence engenders America’s strategy in Africa

China’s shadow loomed over the Sixth Global Entrepreneurship Summit (GES) this weekend.

Despite consolidating America’s new “pivot” to Africa — which President Barack Obama launched during the US-Africa Leaders’ Summit in Washington in August last year and followed by the 5th GES in Morocco in November — the 6th GES Summit is unlikely to slow down China’s growing influence in Africa.

Although Obama declared that Africa is big enough a cake for more than one global power, the growing importance of Africa in the global economy has raised the stakes for Sino-American rivalry over the continent’s natural resources.

The GES summit revealed that America has fewer opportunities to offer African countries than China. The world’s superpower is an underdog in the battle for the hearts, minds and souls of Africa, and trails behind China on almost every count.

In August last year, The National Interest Magazine (Washington) suggested five reasons why America is losing the battle to China in Africa.

CATCH-UP GAME

First, America finds itself playing a catch-up game with China. Beijing’s trade with Africa has flown past America’s, standing at $222 billion in 2014, three times greater than US-Africa trade at $73bn.

During his visit to Africa last year, Chinese Premier Li Keqiang promised to double bilateral trade with Africa to $400bn by 2020.

By the same token, although Obama announced last year that US companies had committed to invest $14 billion in Africa, this is five times less than an estimated $75 billion that China has invested in the last few years.

China plans to quadruple its direct investment in Africa to $100 billion by 2020. Its human investment of one million Chinese nationals now living in Africa is higher than that of America.

Second, China’s framework of engaging African countries (the Forum on China-Africa Co-operation (FOCAC) that meets every three years) has way higher impact than America’s one-off US-Africa Leaders’ Summit and the GES summits. Third, America’s interest in Africa is declining while China’s is growing. Chinese leaders are busy preparing for a future – which they tout as “shared dreams” – with Africa as a market for its finished good and source for natural resources.

Today, Africa is the source of one-third of China’s imported oil, expected to grow even higher.

STEADY DECLINE

In contrast, America’s interest in Africa has been steadily declining. Although around 60 per cent of US imports from Africa are in oil, its oil imports from Africa have declined by an astonishing 90 per cent. America’s bilateral trade with Africa is down from $125 billion in 2011 to $73bn in 2014.

Fourth, America’s attention is not on Africa but elsewhere in the world: Middle East, Europe (following Russia’s annexation of Crimea and intervention in Ukraine) and the Asia-Pacific rim (to contain China’s growing military power).

Despite the accent on entrepreneurship, America’s real engagement with Africa is increasingly limited to counter-terrorism and humanitarian issues as economic concerns take a back-burner.

Finally, pundits in Washington believe that the game in the African market place is rigged, and competition with China unfair. Beijing is said to back Chinese businesses operating in Africa, enabling them to pay above market prices for African goods. Moreover, these largely state-owned enterprises have been bold enough to invest in high-risk ventures and to operate in riskier environments than their American counterparts.

And because of China’s unique development path as a former colonial dependency to now the second most powerful economy globally, Chinese businesses (and bureaucrats) are cognisant of Africa’s economic needs than their American competitors.

MILITARY ACTIVITIES

Despite this, America is determined to roll back China’s influence. It is using two approaches to make a comeback in Africa.

On the one hand, America has stepped up its military involvement on the continent. In 2014 alone, the US carried out 674 military activities across Africa, nearly two missions per day. But Washington is alive to the limits of militarism as a weapon in solving the Sino-American rivalry over Africa.

Last year, this column argued that anti-corruption has become a potent weapon widely used by major Western powers to control weaker nations, especially in Africa. As a second approach, anti-corruption is a softer but subtler option to levelling the playing field in the African marketplace and cutting back China’s influence in Africa.

In foregrounding this approach, American companies, bureaucrats and foreign officials are operating on the premise that America is losing out to China because Chinese businesses have no prohibition against corrupt practices to secure large contracts in government.

In contrast, American companies and foreign officials have their hands tied with the Gordian knot of the Foreign Corrupt Practices Act (1977), which prohibits them from engaging in corrupt practices.

POISONED CHALICE

In the rivalry with China, the Act is the lynchpin of a new form of McCarthyism that is effectively replacing anti-communism of the Cold War era.

Not surprisingly, anti-corruption was a serious sticking issue in America-Kenya engagement during the GES Summit.

America’s anti-corruption strategy in Africa is hoisted on three pillars: (1) An air-tight agreement signed between Nairobi and Washington as a legal basis for American anti-corruption agenda; (2) A comprehensive plan of action whose implementation is overseen and closely monitored by American foreign officials; and (3) Recognition of corruption as a “national crisis” as a basis for an inclusive national dialogue involving donor-funded civil society groups, the opposition and Western partners.

This model potentially turns American foreign officials with almost the same powers as those of the colonial Consuls-General gone by to influence opinion on almost every major business, especially with Chinese companies. After the GES Summit, anti-corruption is a poisoned chalice.

Prof Kagwanja is chief executive, Africa Policy Institute [email protected]