Much hangs in the balance this week with over 40 African heads of state gathered in Washington for the historic U.S.-Africa Leadership Summit. Congress needs to pay attention because the outcome will determine whether this marks the defining moment when the United States asserts its global leadership to become the key economic and strategic partner to a globalized and vigorous Africa, or whether it allows Africa to slip back into America’s blind spot, effectively ceding the continent’s markets and political allegiance to Asia, in particular China.
This is not hyperbole. The facts speak for themselves. While a chronically-partisan Congress has descended into paralysis and the Obama administration has been content to repackage existing political and economic tools rather than invest in bold new initiatives in Africa, China has overtaken the U.S. to become Africa’s largest trading partner. In 2012, two-trade between Africa and China was almost double the $99.8 million in trade between the US and the continent.
As the US struggled to regain its footing in the wake of the 2008 financial crisis, China responded quickly to Africa’s $100-billion infrastructure deficit by becoming the continent’s go-to partner for large energy and transportation projects. Today, while Congress wastes valuable time debating defunding the U.S. Export-Import Bank which provides critical guarantees for American exporters, the Chinese government has already committed $1 trillion by 2025 in financing to Chinese companies doing business in Africa.
It was not always thus. In 2000, a bipartisan Congress passed the African Growth and Opportunity Act (AGOA), opening the US market duty- and quota-free to over 6,000 African products and inaugurating a new era in the US-Africa relationship. Cooperation and partnership were further strengthened by continuing bipartisan support for AGOA and the Bush Administration’s robust policies in Africa that saw the addition of the President’s Emergency Plan for AIDS Relief (PEPFAR) and the Millennium Challenge Corporation (MCC).
But, when the financial crisis struck and America turned inwards, the powerful forces driving economic growth in Africa barely faltered. Today, six of the world’s 10 fastest growing economies are in Africa, the rate of return on foreign investment in Africa is higher than in any other region, and total foreign direct investment in the continent has increased more than fivefold since 2000. Living standards are rapidly rising and a burgeoning and educated middle class is fueling a hunger for consumer goods, with consumer spending projected to total $1.4 trillion by 2020.
Last May, I was in East Africa at the same time as China’s Premier Li Keqiang, and the Chairman of China’s Export Import Bank, Li Ruogu. I was struck by how nimbly the Chinese have adopted what used to be America’s script. They talked about using local content in their products, promising to hold Chinese companies to a high standard of integrity, and reaching out to offer true partnership with African nations based on mutual interests rather than paternalism.
Following World War Two, the US recognized that by rebuilding the shattered economies of Europe and Japan, it was also creating markets that fueled America’s remarkable post-war economic growth and cementing strong alliances that have been critical to the maintenance of global peace and the spread of mature democracies. The stakes are no less high now in Africa.