It is over for the U.S. as China completely ‘conquers’ Africa by the end of 2019

June 18, 2019 at 06:00 pm | Money Moves

Ismail Akwei

Ismail Akwei | Contributor

June 18, 2019 at 06:00 pm | Money Moves

U.S. President Donald Trump in a meeting with Chinese President Xi Jinping -- Photo: Reuters

The devil is in the detail as China’s generosity towards African countries has peaked in recent years coinciding with the great economic vision and strides by the continent as a single body in the face of threats and sanctions from long-time allies, the United States of America.

The U.S. is clueless on how to position itself ahead of other developed nations like the United Kingdom, EU states, Russia and new entrant China which is unleashing strategies to get a fair control over trade in Africa.

However, the unperturbed faction is China which has slowly laid a formidable foundation around the heart of the continent winning the favours of the continental body, the African Union, and more than 99 percent of the continent’s national leaders through loans, grants and the almighty infrastructure development strategy, Belt and Road Initiative.

On May 30, 2019, the African Continental Free Trade Area (AfCFTA) Agreement became a binding international legal instrument and the market would be launched on July 7, 2019, days after China meets 54 African countries in Beijing on June 24 and 25 to discuss last year’s Forum on China-Africa Cooperation (FOCAC) summit.

The meeting is more of a reminder than a mere discussion about the implementation of the USD $60 billion commitment made by Chinese President Xi Jinping in the form of grants, loans and special funds, as well as, the investment of $10 billion by Chinese companies in Africa through 2021.

Inasmuch as 52 out of the continent’s 55 African Union-member countries have signed the free trade agreement with the exception of Benin, Eritrea, and Nigeria, China’s move will secure them the largest share of partnership benefits from dealing with the soon-to-become the single largest free trade market in the world since the formation of the World Trade Organization.

With the commitment of all countries, the AfCFTA is expected to bring together the 1.2 billion African population with a combined gross domestic product (GDP) of more than $2.5 trillion to remove tariffs on 90 per cent of goods, with 10 percent of “sensitive items” to be phased in later.

These goods would definitely include the $10 billion investments of Chinese companies with more prospects for the Chinese government’s advantage in trade with the continent.

Logo of the 2019 U.S-Africa Business Summit

Beginning today, June 18, is the U.S.-Africa Business Summit in Maputo, Mozambique, which is likely to end with nothing significant for the U.S. government as even President Donald Trump, who has never stepped in Africa, has failed to attend.

Despite the presence of 12 African heads of state and government, including the presidents of Namibia, Zimbabwe, Guinea-Bissau and Malawi, the highest-ranking member of the U.S. government is the Deputy Secretary of Commerce Karen Dunn Kelley, reports DW.

China’s influence in Africa

China has filled the vacuum in Africa created by the position of the Donald Trump administration’s “America First” policy which is doing them more harm than good.

The African Union (AU) signed an agreement with Huawei late last month to “strengthen their cooperation in information and communication technologies”. This happened days after the U.S. placed Huawei on a list of suspicious companies to which American entities cannot do business with, as part of the trade war between the United States and China.

AUC Chairperson Moussa Faki Mahamat and Chinese State Councilor and Foreign Minister Wang Yi — Photo: news.cn

The AU has benefited immensely from China which built its headquarters, in the Ethiopian capital Addis Ababa, in 2012 to house and host continental meetings and the biannual heads of state summit. Despite reports in 2018 of China spying on the AU, the relationship remains tighter as the continental body also launched another office in Beijing last year which was also financed by the Chinese government.

America’s dwindling position in Africa

By the end of Barack Obama’s eight-year term as president, the United States was still a dominant force in Africa and the first black president deepened the relations with eight monumental visits to the continent to solidify trade and encourage good governance.

The United States, which is currently the most generous in terms of aid to Africa, might lose that position by the end of 2019 as a result of Donald Trump’s debilitating attitude against Africa which started after calling African states “shithole countries” and firing former U.S. Secretary of State Rex Tillerson during a visit to Africa in an attempt to clear up his mess.

It got muddy when Trump suspended Rwanda’s duty-free benefits to export clothes to the U.S. following the decision to increase tariffs on used clothes imports and a subsequent ban by 2019.

The Rwandan government responded to the suspension saying that their garment companies are already being introduced to European buyers and they don’t need the United States to survive.

Openly declaring war on China’s influence in Africa and latecomers, Russia, the United States’ latest “Prosper Africa” strategy went beyond the three core interests of advancing U.S. trade and commercial ties with African nations.

National security adviser, John Bolton, categorically mentioned China and Russia as “deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States” which the U.S. strategy will target to “safeguard the economic independence of African states and protecting U.S. national security interests”.

This clearly exposes the United States’ disinterest in global partnership and attempt to end the competition in the region to gain its former glory. The plan is to counter China and Russia’s economic and political influence in Africa.

“China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands. Its investment ventures are riddled with corruption, and do not meet the same environmental or ethical standards as U.S. developmental programs.

“Such predatory actions are sub-components of broader Chinese strategic initiatives, including “One Belt, One Road”—a plan to develop a series of trade routes leading to and from China with the ultimate goal of advancing Chinese global dominance,” explains John Bolton.

He also charged at Russia with accusations of seeking to increase its influence in the region through “corrupt economic dealings” and advancing its political and economic relationships with “little regard for the rule of law or accountable and transparent governance”.

Bolton accused Russia of selling arms and energy in exchange for votes at the United Nations that “run counter to the best interests of the African people.

Meanwhile, in March 2018, Russia backed Africa’s quest for a permanent seat at the United Nations Security Council (UNSC) to have a say in the maintenance of international peace and security.

Russia’s foreign affairs minister, Sergey Lavrov, made the assurance after a meeting with the African Union chairperson Moussa Faki Mahamat at the AU Headquarters in the Ethiopian capital Addis Ababa.

John Bolton also said China and Russia were using “predatory practices” to stunt economic growth in Africa; threaten the financial independence of African nations; inhibit opportunities for U.S. investment; interfere with U.S. military operations; and pose a significant threat to U.S. national security interests.

On the contrary, Russia has expressed interest in Africa with new bilateral agreements signed to help create trade links and development partnership. The Soviet country has signed agreements with Ethiopia and Sudan to set up nuclear technology to help power their countries.

In the diamond, gold and uranium-rich Central African Republic (CAR), Russia has overtaken France to establish a strong influence

Russia was recently cited in leaked documents obtained by the Dossier Center, an investigative unit based in London which is funded by Mikhail Khodorkovsky, a Russian businessman and exiled Kremlin critic which say it seeks to bolster its presence in at least 13 African countries building relations with existing rulers, striking military deals, and grooming new generation of “leaders” and undercover “agents”.

U.S. strategy to get Africa on its side

The U.S., on the other hand, adopted a solution to regain its influence in Africa which is to use the aid it provides as bait to get African countries to dance to its music. 

“Under our new Africa strategy, we will target U.S. funding toward key countries and particular strategic objectives. All U.S. aid on the continent will advance U.S. interests, and help African nations move toward self-reliance,” said John Bolton.

He stated also that countries that “repeatedly” vote against the United States in international forums or “take action counter to U.S. interests” are not entitled to U.S. aid.

Bolton said the U.S. is revisiting a cold-war era Marshall Plan that “furthered American interests, bypassed the United Nations, and targeted key sectors of foreign economies rather than dissipating aid across hundreds of programs.”

In 2016, the United States gave Africa a total of $13 billion in aid. In 2017, $7.9 billion was given in aid as partially reported by the USAID.

Besides Eritrea, Seychelles and Mauritius, all African countries received aid from the United States in 2017. Ethiopia is the highest recipient of U.S. aid followed by South Sudan and then Nigeria.

China’s investments in Africa surged by more than 100 times from 2000 to 2017 and the total trade volume increased by 17 times. In 2017, China’s trade with Africa surged by 14 percent year on year to 170 billion U.S. dollars with Chinese direct investment hitting about 3 billion dollars annually on average.

Since 2009, China consecutively became Africa’s largest lender with investments totalling 100 billion dollars and covering almost every country on the continent.

The Asian country is yet to securely position itself as continental Africa’s principal trading partner if it beats EU states who are currently Africa’s largest trading partners with an export volume of $827 billion over a 10-year period.

But for the U.S., China is king and this will be official after the African Continental Free Trade Area (AfCFTA) Agreement kicks in.

Most viewed

Conversations

Must Read