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There is more to Agoa than US generosity

Thursday August 6 2009

United States Secretary of State Hillary Clinton address delegates during the official opening of the 8th Agoa summit in Nairobi in August, 2009.  Photo/ FREDRICK ONYANGO

United States Secretary of State Hillary Clinton address delegates during the official opening of the 8th Agoa summit in Nairobi in August, 2009. Photo/ FREDRICK ONYANGO 

By Gitau Warigi

Amid the clamorous lectures on governance and corruption, there is a genuine sense the US administration of President Barack Obama wants a re-energised trade embrace with African countries.

As Secretary of State Hillary Clinton pointed out in her address to the Agoa meeting in Nairobi on Wednesday, the trade figures are embarrassingly lopsided against Africa.

The entire continent accounts for a measly two per cent of global trade; one per cent of US exports; and three per cent of US total imports. In monetary value, 90 per cent of these imports are petroleum. And that from a handful of African countries – Nigeria, Angola, Gabon and Equatorial Guinea.

A calibration of these sorry figures such as to increase Africa’s trade profile in multi-trillion-dollar US market is clearly something the US considers to be in its interest, from when President Bill Clinton inaugurated Agoa in 2008 up to the pact’s renewal in 2008.

Mrs Clinton was right that just a one percentage point increase in Africa’s meagre two per cent share of world trade would cancel out the entire annual donor funding for the continent and even alter living standards dramatically.

Yet what the American government will be shy to say is that there is more for it in Agoa than the altruism of a superpower offering a helping hand to the poorest continent.

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There are strategic interests involved. By the time the George W. Bush administration was extending the life of Agoa in 2004 (to 2015), a rising global power in the name of China was muscling into the continent and striking deals for raw materials and oil with counties across the board.

If anything, that incursion has greatly increased since, with China becoming one of the biggest benefactors of infrastructural projects on the continent.

What is more, China is sourcing a larger share of its oil imports relative to the US from Africa. It is no coincidence that two of Mrs Clinton’s stops on the continent happen to be sub-Saharan Africa’s biggest oil producers: Nigeria and Angola.

With regard to Angola, it is noteworthy that Chinese and US companies are in a tight competition over the exploitation of that country’s oil resources.

Given the ongoing insurgency in Nigeria’s oil-producing Niger Delta, some oil industry estimates put Angola as currently the largest net exporter of oil in sub-Saharan Africa.

America calculates – correctly to an extent – that it has advantages over China when it comes to Africa which it can leverage through trade pacts like Agoa. The US, for one, is a far more lucrative and developed market than China. Neither is it in competition with Africa – like China is – when it comes to low-tech goods like textiles which form the bulk (in value) of the non-oil imports America is absorbing duty-free from Africa through Agoa.

Where China is proving to be a dangerous and more effective competitor is through the sheer scale of direct investment it is eager to pour into Africa to secure the commodities it needs.

True enough, President Obama’s interest in Africa’s prosperity is more personal than just geo-strategic calculations.

That, essentially, was what Mrs Clinton sought to convey in Nairobi, and presumably to the six other African countries she is visiting.

In Nairobi, which was the first stop of her African tour, Mrs Clinton echoed Obama’s earlier speech made in Ghana last month.

That speech stressed on democracy and governance, which have become the mantra of US policy speeches to Africa.

In Obama’s case, he went out of his way to single out Kenya, his father’s homeland, as a special case in institutional rot. Over and above this routine rhetoric, the US tends to be quite pragmatic in its relationship with Kenya. Presently this is more so when Jihadists in Somalia are threatening to destabilise the whole region. The meeting in Nairobi Thursday between Mrs Clinton and Somalia’s interim President Sheikh Shariff Ahmed was instructive.

It was meant to send a larger message to the world.

Kenya has always reciprocated this pragmatism, even when political relations with the US have been at their most rocky, such as they were during the last phase of Daniel arap Moi’s presidency.

But even then, there was close diplomatic choreography over the South Sudan conflict, culminating in the Comprehensive Peace Agreement of 2005.

As of now, co-operation is strong on counter-terrorism between US and Kenyan security agencies. Similar cooperation is evident on the ongoing problem of piracy off the eastern Africa seaboard.