According to a report by Bloomberg today, China is still the first country of choice for Africa’s infrastructure development.
This became apparent when Uganda only invited Chinese companies to bid on a $8 million expansion contract last month for the East Africa country’s railway network. With a summit being hosted in Washington next which aims to strengthen ties between the US and Africa, President Obama appears to have his work cut out for him.
China’s trade with Africa exceeded $200 billion last year, which is more than double of the trade with the US.
According to Daniel Silke, of Political Futures Consulting, who spoke with Bloomberg, “China has got a massive head start. From both a diplomatic and economic point of view, China has made all the running over the last few years so there is quite a catch-up for the US.”
Says Paul Hinks, CEO of Symbion Power, an American company with power plans in Nigeria and Tanzania; “The Chinese strength really comes in projects funded by China itself.”
Too many US companies still see Africa as a continent rife with corruption and security risks, which is just too challenging to tackle. This perception has, naturally, opened the door to the Chinese.
The US commerce department anticipates more than $900 million of business deals to be announced at the three-day summit that starts 4th August, although these won’t necessarily be the result of direct competition with Chinese companies.
For the US, soaring production of shale gas has reduced its reliance on African crude, with total imports from the continent plummeting by more than a fifth last year. Meanwhile, Islamist-inspired attacks have surged in countries from Nigeria to Kenya, heightening concerns about the threat posed to US assets and personnel.
Since President Bill Clinton signed the 2000 African Growth and Opportunity Act, giving sub-Saharan nations that practice good governance duty-free access to US markets, Washington has weighed a broader set of interests. George W. Bush instituted an anti-AIDS program that’s helped secure treatment for more than 6.7 million people since its founding in 2003 and has Africa as a primary beneficiary.
Last year, Obama unveiled a $7 billion plan to double access to power in six African nations that practice good governance. Two-thirds of people in sub-Saharan Africa lack electricity.
Africa will welcome both American and Chinese partners, provided they cater to the continent’s needs and ambitions, according to South African Trade and Industry Minister Rob Davies. The European Union offers another alternative, with the 28-nation bloc doing more than $420 billion of trade with Africa last year, about double that of China.
“The fact that you have got both the US and China increasingly involved in Africa helps us in dealing with both of them,” Davies told Bloomberg in an interview in Cape Town. “It’s not just one of them who can come along and dictate all the terms. We have got several possibilities.”