No free lunch: Newer players also want a slice of the continent's growth

China has done big infrastructure; the US is mixing counter-terrorism and energy projects. The rest also knocking on the door.

THE flurry of Afro-focused summits this year is testament that no significant world player can afford to ignore Africa, whose robust economic rise in recent years has provided the continent with multiple development options.  

Other countries are also zeroing in on this growth story, making Africa not only an arena of competition between the established western powers and China, but also  emerging countries like India, Brazil, and Turkey. Hardly a month passes without a high level delegation visiting–in May both the US Secretary of State John Kerry and Chinese premier Li Keqiang made inaugural Africa visits.
 (Read: billions promised to Africa—how it would be spent).

The numbers have continued to capture this growth. These include that of a burgeoning middle class, which if you throw in the lower and high bands numbered about 313 million, or 34.3% of Africa’s population, according to the African Development Bank (AfDB)‘s widely-cited 2010 study. This is nearly thrice the number of people that were deemed middle class in 1980.

The 7 out of 10 story

Seven of the world’s 10 fastest-growing economies are also currently in Africa, with 70% of the continent’s population living in countries that have enjoyed average Gross Domestic Product  (GDP) growth rates in excess of 4% over the past decade.

Africa is also urbanising at a rapid pace. According to UN-Habitat data, the proportion of Africans living in urban areas grew from 32% in 1990 to 40% currently, and is expected to rise to 47% by 2025, and climb to 60% in 2050.

China has been among the most talked-about. The Asian giant is keen to benefit from this economic growth, and has been active in the continent’s infrastructure boom. In 2012, Chinese enterprises are reported to have completed construction contracts worth $40.83 billion in Africa.

The inauguration of the new $200 million African Union (AU) headquarters in 2012 in Addis Ababa, Ethiopia, built as a gift from China, was a symbol of how far China is willing to spread its stall on the continent.

Many African leaders are now quick to remind Western countries that they are not the only players in town, as the now have the option to “Face East”- a short hand for working with China.

Despite inherent problems, China’s approach of non-interference in the domestic affairs, especially human rights, has had a certain appeal to political leaders when it has been weighed up against Western countries’ rights-based approach. The public have also been impressed by the immediate tangible benefits of infrastructure development and progress.

Further data shows that from 2010 to May 2012 China approved concessional loans worth $11.3 billion for 92 African projects. This includes preferential export buyer’s credits, and foreign aid concessional loans, and meets Beijing’s 2009 pledge of $10 billion over three years.

These loan commitments have come through China’s policy banks such as the Ex-Im bank, amounting to $4.7 billion annually.

During his visit, Chinese premier Li announced an additional $10 billion credit line to African countries for mutually agreed projects, thereby reiterating the $30 billion in credit promised by Chinese President Xi Jinping on his visit to Africa last year.

Beijing also announced that the remaining $2 billion would be allocated to the China-Africa Development Fund, bringing the total to a promised $5 billion.

Shifting strategy
The US Africa Command (AFRICOM), established in 2007, has been the main vehicle of the United States security focused policy towards Africa.

The troubled Horn of Africa and Sahel are two regions Washington has targeted. Its Trans-Sahel Counter Terrorism Partnership (TSTCP) between 2005-2008 committed $353 million for activities in nine partner countries.       

Data shows overall TSCTP receives between $90 million and $160 million per year, of which approximately $50-55 million is dedicated State and USAID funding from several sources.

In the Horn of Africa, the Combined Joint Task Force-Horn of Africa (CJTF- HOA), established in 2001, and based at Camp Lemonnier, Djibouti, is the military’s main operational presence in Africa.

But after decades of funding counter-terrorism projects, there is a discernible shift in the US approach. In his speech during the first US-Africa Summit, President Barack Obama implicitly accepted America has not been doing such a good job in trading with Africa; America’s trade with the entire continent is equal only to that with Brazil.

“We’ve got a lot of work to do. We have to do better — much better,” Obama said. “I want Africans buying more American products, and I want Americans buying more African products”

During his June 2013 Africa trip, Obama announced Power Africa initiative, a five-year $7 billion in financial support and loan guarantees, targeting Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania. That figure has now swelled and could be a major legacy plank as he prepares to call time on his final term.

Obama at the summit announced $33 billion in new investments and financing from the private sector and government agencies. On top of that was another $14 billion in investment deals, and $7 billion in loans to support US exports to Africa.

While the background track to the US-Africa Summit was China, the Asian giant is not the only player interested in Africa. India, Brazil and Turkey have all recently ramped up their efforts in wooing Africa.

Other hopeful players
While India is not as a big a player as China or the United States, it has long standing relations with Africa. The South-South cooperation and the history of being colonised makes their relations based on mutual respect.

Africa’s trade with India had been projected to reach $70 billion by 2015, but last year it hit $93 billion. In one of the largest deals, India’s state-owned Oil and Natural Gas Corporation in 2013 bought a 10% stake in a Mozambican offshore gas field from American company Anadarko Petroleum Corp., for $2.64 billion.

In 2003 on election, Brazil president Lula Da Silva embarked on an expansionist policy of engaging African countries. During that time he doubled the number of Brazil’s embassies across Africa to 37—more than Britain’s presence.

The key niche market for Brazil is agricultural technology, oil and gas, while natural resources constitute a huge chunk of its import from Africa. From 2000 to 2011, Brazilian-African trade increased more than six fold to reach $27.6 billion.

Turkish-African trade reached $17 billion in 2012, a sharp increase from $5.4 billion in 2008. It is projected to exceed $50 billion by 2015. Turkey has invested heavily in key relief efforts in sub-Saharan Africa.

For instance, in Somalia, Turkey has taken a leading humanitarian role after most of the aid agencies left. The invocation of its brotherhood bond with Somalia, and their politically neutral stance has won the locals over.

All the Afro-love in the air is a positive affirmation of the continents turnaround, but Africa should be conscious that this new-love is not driven by pure altruism.
Therefore the continent should not uncritically embrace one actor over another because in international relations, there is no free lunch. 

Instead Africa should be guided by Kwame Nkurumah’s timeless maxim, “We face neither East nor west; we face Forward”.

Currently, over 30 per cent of the population is between the age of 10 and 24, and will remain so for at least the next 20 years. In order for all these courting to work for this future generation, the present generation should seize this window of opportunity and make it count.

The author is a Horn of Africa Analyst. Twitter: QulshTM

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