American interests in Africa could get another boost as Washington has hosted a three day US-Africa summit. Does the US have the necessary resources to contest China – the biggest international investor in Africa? Or – has it come up with a new strategy particularly attractive for the developing continent?
The Summit dubbed "Investing in the Next Generation", has been promoted as President Barack Obama's biggest initiatives for Africa. Joining us with more details of the event is Dr. Scott Firsing, a research fellow at the Monash University, South Africa and Catherine Grant Makokera, head of the Economic Diplomacy Programme at the South African Institute of International Affairs.
Dr. Scott Firsing: I think this is a big event for Obama’s legacy. If you think about his first term as President, there was a big push because of his keen inheritance to do a lot in terms of the US-Africa engagement, and it didn’t really come to fruition during his first term. That slowly began to change when they adopted a new White House strategy towards the sub-Saharan Africa.
And once that was in place, we’ve seen a huge growth in the initiatives over the last couple of years from something called Power Africa, which helps support the US companies investing in the African infrastructure projects, in terms of energy and other initiatives called Trade Africa and Young African Leadership initiatives. There’ve been a handful of these new programs that Obama started in the recent years.
And this is sort of the capstone of that – this leaders’ summit – to bring everyone to Washington to discuss these various initiatives, to expand these programs and to talk about the way forward between the US and Africa.
But what are the expectations and concerns? How do people in Africa see it?
Dr. Scott Firsing: I think from the African perspective there’s been some concern that this was going to be a talk shop, because there were no one-on-one meetings between President Obama and the African heads of states. But there have been a lot of developments that have come out of this. Yesterday Obama announced $33 billion to support development across Africa. And that was to expand those initiatives that I’ve just mentioned, a lot of them in terms of agriculture and power, and energy, and so on.
And there are also some business deals announced. General Electric talked about investing $2 billion into Africa and expanding its operations up to about $5 billion. Coca Cola is now developing two new bottling plants in Africa. And there are other American companies that have announced some rather large deals, in terms of Africa and the US companies involved in Africa.
But turning to the African perspective, I think that due to the history some are a little bit skeptical. But I think it’s actually been pretty welcomed. The opinion of President Obama I think is better from the African perspective than it is domestically right now. And then, they are looking for various opportunities and various trade partners, and basically Africa needs funding. There is a huge funding shortfall that bankers talked about. And we are talking billions and billions of dollars.
So, I think that if they could secure funding and investment, and partnerships from the US, I think the Africans would be extremely happy to do so. And this summit is really the start of a fruitful relationship and also expanding commercial and political relationship.
Quite some time ago I read a thick report focused on the US interests in Africa. And that was in early 2000. Now, this summit is the first of its kind. Why has it taken so long?
Dr. Scott Firsing: It is a good question. I think as the US-Africa expert myself, we’ve been pushing for years saying – come, the opportunities are here. But I think there are also various reasons. I think number one is that stability and democracy is a big issue. For all the investors these are the two aspects they are looking for. And in a lot of countries there’ve been some security issues in terms of Al Qaeda and Boko Haram in Nigeria, you know, your usual suspects in terms of Somalia, the DRC, the conflicts in Sudan, the conflicts that have been raging on for 5, 10, 15 years now.
But other areas of the continent over the last 10 years have really become a lot more stable, a lot more attractive to the foreign investment. You think of Rwanda, South Africa, Ghana, for example. The companies are starting to see the opportunities and, having more democratic governments, more stable societies and businesses, that now it is the time.
Also, I think the US has tried not to think a lot for the timing as well, because I think the investment that China has put into Africa in the last ten years has helped to build the railways and the infrastructure, and the buildings that it needed. So, that’s a huge assistance, when the American companies are coming in now at this time, to have some of the infrastructure there.
And if I get it right, China is one of the major competitors for the US in Africa. And you quoted the figures. These are considerable sums. So, where do you get the money form?
Dr. Scott Firsing: The money is a big question. Imagine China, obviously, with their reserves and their cash… I mean, just looking at the figures on the trade’s side – China-Africa trade is around 200 billion, whereas the US-Africa trade, I think it was something around 85 billion last year. And a lot of it actually is oil exports from Angola and Nigeria to the US. And Obama mentioned this in his speech yesterday, saying that in terms of the US trade with Africa – with the entire continent it is the same as the US trade with one country, with Brazil.
So, there is obviously a huge opportunity of expanding that trade relation. And the same goes for foreign direct investments. Foreign direct investment was 1% of all the US foreign direct investment overseas. I'm talking of the entire continent of Africa in 2012. So, the numbers are minute, when you are talking about the US engagement with the world – with China, India, Russia and so on. I mean, really, there is nowhere but these numbers to go up, when you are looking at all the figures.
On the opening day the hosts of the summit addressed the audience including 35 presidents, nine prime ministers, three vice presidents, two foreign ministers and a king, urging them to “respect core democratic principles that are vital to achieving long-term economic growth”.
Catherine Grant Makokera: The US-Africa summit is an initiative that was announced when President Obama visited a number of Africa countries last year. And, basically, it is a bilateral event that the US has put together. They have invited a number of African leaders to come and see them in Washington, to have conversations about various issues, including trade, investment, energy is a big feature of the summit this time.
It is not anything that happened before and it is not being organized at an institutional level. So, it is quite different, for example, from the forum on China-Africa cooperation or the India-Africa summits. There is no big role for the African Union commission in this event. It is very much the Americans inviting a few African friends to come for a couple of days to talk to them.
I think there have been some concerns voiced by people, particularly because the invitations were done on a relatively selective basis. They weren’t sent to all African leaders. There were a number of African heads of states who did not get invited. This always leads to some sort of suspicion – if you like – about what are the real reasons behind such an event, is it to simply reinforce American ideals around good governance, human rights and their own values. I mean, there has been some criticism of particularly the invitation process, I would say, from a number of African sources.
And up till now, how would you describe the cooperation developing between the US and African countries?
Catherine Grant Makokera: I would say that the cooperation, probably since the end of the global financial crisis, for the last five years or so, has actually been fairly moderate. What we’ve seen is that, certainly, in terms of trade and investment statistics, the US-Africa relations haven't recovered particularly well since the global economic crisis, as compared to a fairly good recovery, for example, between Europe and Africa and, of course, the strengthening links between the African continent and the emerging powers – China, India, Brazil, Russia.
So, I think that here the US is probably trying to remind Africa that they are an important player, they are the third most important trading partner for the African continent. I think they are probably looking to how they can regain some of what were particularly strong linkages in the past.
Do you see this initiative as perhaps an attempt to somehow counter the growing BRICS cooperation?
Catherine Grant Makokera: I don’t think it is directed to counter BRICS cooperation, but I do think that, certainly, the BRICS has refocused – if you like – the attention of a country like the US on other parts of the world. Maybe, they have been quite happy to simply let it lie for a while – if you like. I think that this is not a direct response to China or the rest of the BRICS necessarily, but, certainly, the BRICS most recently have made some big steps forward in terms of the nature of their cooperation. And I'm sure that the Americans have been watching that with interest.
When the US start talking about human rights and democracy, it usually appears to be a double-edged sword, often resulting in some kind of unrest in which the US gets involved. And let’s not forget that in 2007 they have actually setup the US African Command…Human rights, democracy promotion, getting down on corruption – are all the right things. But somehow they often get twisted...
Yes, I think that those types of issues are probably going to be the most contentious in the context of the US-Africa summit, because I think that more and more African leaders are particularly sensitive to any approach that could be seen to be patronizing – if you like – or forcing onto the African leaders standards that they are not necessarily willing to accept, with regards to democracy, governance and human rights.
What you see coming much more strongly from the African Union and the African leaders’ statements and positions as of late, is sort of a recognition that Africa has to find its own way, that we have to develop our own principles, our own value systems and our own ways of doing things; and external interference or external pressure is not going to solve the problems of the African continent.
So, I think that there will be an awful lot of sensitivity in the discussions with the US around any perception that they are trying to impose the American standards onto the African countries.
On the question of double standards, I think what’s been interesting to see is that a number of the African heads of states, who have been doing public speaking events in the lead up to the main summit day, have actually raised concern, for example, about the situation in Gaza and the US approach to the Israeli-Palestinian conflict. And so, I think that is showing a bit of backbone – if you like –that you are prepared to go into discussions with the US and actually hold up a mirror to gain a little bit more as well, and say – hang on a second, don’t you just come and tell us what to do? You’ve also got to get your own house in order, if you are going to ask us to be respecting some of these things.