Friday, June 11, 2010

Aiming Too Low on Africa?

Chatham House, the operating name of the Royal Institute of International Affairs of the United Kingdom, recently issued a report warning that Western nations will lose out to emerging nations, particularly those from Asia, if we don’t change our paradigm for relations with African countries from a primarily humanitarian and crisis mode to one of facilitating long-term partnerships. If you look at the Asian commercial advance on the continent, that view is a valid one.

• In 2007, the China-Africa Development Fund, a US$5 billion initiative to support business partnerships between Chinese and African entrepreneurs, was established. In its first two years, the fund facilitated more than 20 investments in Africa, amounting to nearly US$400 million.
• Indian firm ONGC Mittal Energy Ltd. Agreed to a US$6 billion infrastructure deal in 2007 in Nigeria in exchange for extensive access to some of the best production blocs in the country.
• Japan increased its development assistance to Africa to US$2 billion, up from what had been US$962 million, as well as US$4 billion in soft loans for African infrastructure improvement.
• Two years ago, the Turkish Confederation of Businessmen and Industrialists hosted a Turkey-Africa Foreign Trade Bridge that drew about 1,000 African business leaders from three dozen African countries. Three subsequent agreements will bring US$220 million in Turkish investments to South Africa.

These countries and others recognize and believe that African countries are making significant economic advances. They read the same World Bank and International Monetary Fund reports predicting high growth rates in Africa, including 4% in Cote d’Ivoire, 5.1% in Botswana, 5.8% in Kenya and 7.7% in Ethiopia. All these countries have serious issues, but their Asian partners see past current problems to tomorrow’s promise of profit. Western countries are too fixated on what is wrong now and fail to fully acknowledge what is going right going forward. We recognize that Brazil is becoming an international energy power due to biofuels, but we fail to give full credit to Congo’s advances on biofuels.

Continually, Asian deals that look good to some African leaders becomes a net negative. A South Korean deal to buy nearly a third of Madagascar’s farm land contributed to a revolt that toppled that African nation’s government. African governments that don’t honor human rights, such as Sudan, allow countries like China to freely exploit their resources.

The new scramble for Africa, Asian-style, is abetted by our borderline demeaning view of Africa, which puts Western governments in the role of saving Africa rather than working with Africa for mutual benefit. We say we want to partner with the continent’s countries, but our actions belie our words. The African Growth and Opportunity Act, the main process by which the United States engages Africa economically, was not instituted as a negotiated trade deal that met the expectations of both sides. It is, in fact, more designed along the lines of a gift to those African countries that qualify. If you give someone a gift, it does earn you the right to determine if they deserve it. However, that’s not how partners behave toward one another.

This is why African countries are increasingly turning to Asian partners. The Asians aren’t telling them they have to jump through hoops, no matter how justified those hoops may be. Now Asian countries are mostly taking advantage of African interest in not being told what to do, but their engagement is all too often more beneficial to them than their Africa partners.

Have you ever seen the work crews on many Chinese infrastructure projects in Africa? I have, and they are almost exclusively Chinese. After many projects, Chinese workers are left behind to go into business, pushing out African entrepreneurs. Asian loans are real loans and not destined for forgiveness as so many Soviet arms deals were.

African leaders such as Zimbabwe’s Robert Mugabe and Sudan Omar Bashir use Asian and other non-Western investment and aid as a lever to back off Western countries from insisting on conditionality on aid and investment. But even generally friendly African leaders such as Senegal President Abdoulaye Wade and Liberia President Ellen Johnson Sirleaf are turning East. This should be a disturbing development that causes us to look inward and reassess how we deal with Africa.

This second scramble for Africa could leave African governments in charge of the apparatus of power but not in control of the reins of their own resources. That would be too bad for the Africans, but also too bad for us.


  1. Hello Gregory - I am trying to find out the name of an African activist, I saw an episode of Africa Rising on t.v. and he is a singer, from Africa, traveling and giving benefit concerts. He is French-speaking and on this show he joined forces with a female activist fighting FGM, as well as describing his program "One Concert One School", the profits from his shows pay to build schools. The show had him visiting the first school he built, from his hometown (the name of which escapes me). I want to help promote this guy as somebody to be admired in what he is doing. I thought his name was Tekken-something but I can't find him on the internet, can you help?

  2. Asian commercial advance in Africa can hardly be surprising. And it was time it came too.

    With the crumbling of the Soviet Union and the wave of democratization that swept across so many African countries, what did we expect?

    For once, hardened colonial countries such as France have had to sit up and think. Previously, French business interests enjoyed an unassailable monopoly on the continent, especially in their former colonies. The same chain of banks, insurance companies, maritime companies, etc could be systematically found in francophone countries.

    But then came Asia. Today, the world has come to realize that everyday basic needs such as watches, clocks, clothes, pens, etc can be affordable by all and sundry.

    At last the down and out can stay in their little corners with the little they have and still have a reason to put on a smile.

    Know what? This is only the beginning of things to come.


  3. I completely agree with your analysis. Asian countries are indeed seeing African continent as huge investment opportunity. In response, African countries have responded to the interests showed on them. So the western nations have to come up with wise and strategic investment to remain in the battle.
    Mutual funds investment