Editorial
America’s Lost Opportunities in Africa
Over the next few weeks, various U.S. based bodies – Brookings Institution, Woodrow Wilson Center and the Corporate Council for Africa – will emerge with reports and recommendations to the Obama Administration. Each of these reports will have three things in common:
– First, 6 of the world’s fastest growing economies are in Africa;
– Second, China and other countries like those of the European Union, India and even Brazil are taking advantage of the lucrative opportunities and resources that currently await in Africa;
– and third, America, which was, until 2009, Africa’s largest single trading partner, is not even competitive on the continent.
Referring to the U.S. as ‘too largesse to be lithe,’ the Wilson Center’s report – of which our Dennis Matanda is co-author – suggests that the different bureaucratic steps one has to go through to get America to move into Africa are, basically, hobbling U.S. businesses from getting in on the action. However, this does not seem to recognize that the U.S. government is only about 20 – 25 percent of the U.S. economy.
The fact is that the American investors are not necessarily swooping into Africa because they, mostly, do not know about the opportunities that exist there – some still think Africa is one country and full of flies and dying children – and especially because the U.S. is still a place to invest.
The world’s largest economy has the capacity to gobble up any investment dollars and that is why the U.S. treasury bonds are the world’s safest investment!
Having said that, it is also crucial for us to note that one of the reasons U.S. investment in Africa tends to be an arduous task rests on the polarization between the Democrats and Republicans. There’s no doubt that if Obama – America’s first African American president – had even pivoted to Africa and tried to do a few things for the continent in his first term, the Republicans would have used this against him. They were already questioning his heritage and the birthers had made such inroads with the American public that the president himself had to release his birth certificate.
Thus, even though many Africans understood what Obama was going through at home, they were also disappointed that the Americans could be so petty. And in the process, China started its white-hot process of invading Africa.
The Chinese have seized on various opportunities on the continent and even managed to make more and more African leaders less democratic. Like happened during the Cold War era, some African leaders are playing the East vs. the West. Because China provides aid and monies without strings attached, many African countries are getting their infrastructure built and patched up, and giving sizeable concessions to Chinese firms.
On the other side, the U.S. is sitting on the sidelines. With more than US$1.8 trillion sitting in U.S. banks, with a stock market that is booming, and with problems in the European market, one would have thought that the American government would nudge people along to Africa. But, no: This’ not the case. Many American agencies seem to have caught the err on the side of caution fever, and with good cause. No one – not the Minority Business Development Agency or the Small Business Administration wants to be dragged before the Republican House of Congress for a political shaming.
Besides, if any one understands the No Drama Obama meme, no agency in a very polarized Washington, D.C. wants to be the one to distract the Obama administration with a failure-in-Africa scandal. This would take away from the big things like immigration reform and gun control legislation currently burning the midnight oil in the corridors of power.
In the meantime, Africa provides China with huge opportunities like the Sinohydro Corp, which built most of China’s Three Gorges Dam. The firm has now capitalized on Africa’s vast hydropower resources by developing projects in 21 countries. And where is the U.S., that bastion of aggressive capitalism? Well … The U.S. is still tinkering with the Africa Growth Opportunities Act (AGOA) – a program that probably served its purpose up until 2009.
In 2013, AGOA even faces a threat from the European Union’s economic partnership agreements (EPAs). If these things are to be implemented by individual African countries, not only would AGOA be threatened – America would be moved further and further down the totem pole – and in Africa, many may even forget that Coca Cola and Michael Jackson were once part of their daily bread.
Editorial Board,
The Habari Network
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