Can the US offer Africa anything different?

 

US-African summit hailed as a success, but obama has a lot of catching up to do with China and others

The US-Africa Leaders' Summit that took place in Washington from Aug 4 to 6 was meant to strengthen US ties with Africa, convey enduring US-Africa partnership, and lead to increased US investment in African countries.

To showcase Africa and spur investments, the Commerce Department and Bloomberg Philanthropies co-hosted the US-Africa Business Forum and invited about 300 US and African business leaders, African heads of state and ministers, US government agencies, and members of Congress. Power and energy, infrastructure, finance and capital investment, information communication technologies, consumer goods and agriculture received the greatest attention. The Business Forum did not take place on the margins of the summit: it was its centerpiece.

The selling of Africa was headlined by statements such as six of the world's fastest growing economies are in sub-Saharan Africa, or Africa has a burgeoning middle class of consumers, and an expanding market suitable for US direct investment.

The achievements of the 14-year-old African Growth and Opportunity Act were rolled out to show that both the US and African have benefited from this initiative. The message was clear: African countries make good business partners and are excellent destinations for US companies.

The three-day summit is best described as an event that, much like a train, stops to pick up input from about 80 smaller events hosted by businesses, nongovernmental organizations, overseas African groups based in the US and think tanks in different venues in Washington.

Before the plenary on a signature event - looking at civil society, investing in women, peace and prosperity, investing in health, resilience and food security in changing climate and combating trafficking in wildlife - the train stopped at smaller events timed to deliver their input perfectly on time. The US government, private sector and non-governmental organizations made major announcements during signature events. These announcements were the outcome of the summit, which was clearly a major undertaking and a highlight of US President Barack Obama's second term in office.

By all indications the summit was a logistical success.

Power Africa was one of the most prominent outcomes. Obama launched the initiative last year, and he would clearly like it to be his legacy to Africa. A key feature of Power Africa is that it is a partnership between the private sector and the US government, and Obama has assembled financial and technology companies that have the capacity or a record in generating electricity using environmentally friendly techniques. At the summit it was announced that these companies had committed to invest more than $14 billion in African countries including such initiatives as those between Africa's richest businessman, Nigerian Aliko Dangote, and US private equity group Blackstone on energy infrastructure projects. Other players includes US industrial group General Electric, which will invest $2 billion on the continent. The World Bank pledged $5 billion toward Power Africa, and Sweden $1 billion. All told, at the end of the summit about $26 billion had been leveraged for Power Africa, far beyond Obama's initial announcement last year. In effect the summit more than doubled the scale of Power Africa, and this is a major achievement.

Listening to some of the speakers, one came away with the impression that the US private sector is already somewhat ahead of the development community - the US government, NGOs, etc. Business people and investors are more ready to engage with Africa while acknowledging that the creation of an enabling environment - reducing corruption, respecting human rights, transparent regulatory regimes - is a work in progress.

Although nearly every official of the US government was at pains to deny the summit was in response to China's success in engaging Africa with trade, investment and limited capacity building, these denials can be safely ignored: China was an unseen presence throughout the summit.

It is worth noting that the sums of engagements arising from the summit are nearly the same as those that Chinese Premier Li Keqiang announced in the form of bilateral credit lines for African countries at the end of the World Economic Forum in May, or about $30 billion for 2013-15. In engaging Africa, China is the new standard to beat in scale and content.

Thus the real challenge is whether the US can match Chinese engagement by prioritizing investment and trade while at the same time toning down and eventually eliminating altogether the hectoring associated with social development, the traditional mainstay of US engagement with Africa. More fundamentally, the challenge is to engage on a more equal footing with the continent's emerging economies.

The question is whether the US can imagine itself simply as a trading and investment partner with Africa without the paternalistic social development projects that are the hallmark of US-Africa relations.

The change in policy from one that is driven by the desire to change Africa's social fabric to one that is driven by trade and investment may require the US development community, both private and public, to step back and let the US business community take over.

The fact that Africa now has the choice of investors and traders in the BRICS in addition to the US and Europe raises a fundamental question that was a subtext in conversations among Africans at the summit: why should Africa endure the hectoring on corruption, good governance or human rights to attract investments and trade from the US if the same can be obtained from other countries without redesigning Africa?

After more than half a century of an engagement that is driven by social development, many Africans appear ready to try something different. In this sense, China and the other BRICS were an unseen presence at the summit.

A constant refrain from many speakers, second only to the observation that six of the fastest growing economies in the world are in Africa, was that Africa has the youngest population in the world. African leaders at the summit already knew this because it is their daily challenge. To these leaders, an investment and trade-driven engagement is preferable because it promises to expand opportunities for Africa's young populations to swell up the ranks of the middle class, the key to stability. Yes, a minimum amount of stability is necessary if a country is to host foreign investments, but wholesale redesigning of the society is unnecessary and is fundamentally patronizing.

A change in US engagement away from social development toward trade and investment partnership would bring US policy toward Africa closer to the Chinese approach. But it faces a major obstacle that was demonstrated on the second day of the summit when the US media shifted its attention away from the summit showcasing Africa, to Ebola with the first two cases arriving in the US from West Africa.

So long as Ebola remained a challenge in far off Africa, it did not capture the attention of most Americans, who have been fed a steady diet of images of Africa as a disease and unrest-ridden continent. Obama's challenge is not in Africa because generally African countries welcome trade and investment from the US. His challenge is to convince his compatriots that Africa is the new and last frontier for major investments and trade. China, Brazil, India, South Korea and Turkey appear to have convinced their traders and investors and those trains have already left.

It is up to the US to catch up if it wants to do that.

The author is former economist with World Bank. The views do not necessarily reflect those of China Daily.