Investment Mix

Eager for More Aid, Africa Should Look More to the West to Reduce Dependency on China

Rwanda's President Paul Kagame, Chinese Premier Li Keqiang, Kenya's President Uhuru Kenyatta, Uganda's President Yoweri Museveni and South Sudan's President Salva Kiir meet in Nairobi, Kenya, May 11, 2014.

When Barack Obama and Africa are mentioned together, there are always plenty of superlatives tossed around. That applies even more for the current summit taking place in Washington D.C. between the first African-American U.S. president and the leaders of almost 50 African countries. Although America’s rival for regional influence China already arranged such a meeting years ago, there has been plenty of talk that this “historic summit” represented turning point in the United States’ strained relations with Africa. At the same time, it would shower investment worth billions of dollar onto a continent that has fallen too far behind the rest of the world. The expectations for economic cooperation are accordingly high.

Whether the summit fulfills these hopes is questionable. This time, Africa itself has namely a duty first to itself. After all, the continent has wholeheartedly and completely uncritically embraced China since the turn of the millennium. At same time, it has neglected old ties to America, causing trade with the United States to shrink to $60 billion in the last ten years. In contrast, Africa’s exchange of goods with China has drastically increased since 2000 from just $10 billion to now $180 billion.

A reason for this development is doubtless due to the fact that Mr. Obama came into office at the start of the serious financial crisis in the year 2009 and that meant Africa was lost from focus for a long time in Washington. Until recently, this practically gave China free reign in its search for new raw materials sources for the development of its own economy. Furthermore, it was well received by the African elites, that Beijing does not hold any moral sermons on democracy and transparency, but rather, carries a brisk trade with even the continent’s worst dictators.

Mr. Obama long ago pointed out Africa's most basic problem: its corrupt, irresponsible elites, who enrich themselves from the continent’s natural wealth at the expense of their own countries.

Only recently has the page has turned, albeit very belatedly. Africa now recognizes that China is not a selfless friend, but that it is pursuing its brutal self-interests across the continent. The many cheap imports from the Far East have already caused widespread damage in Africa, largely destroying the few industries the continent has, for example its small textile industry. China also imports, for the most part, its own workers for its large projects in Africa, limiting the number of new jobs created and the urgently needed transfer of knowledge.

Meanwhile, it has also become obvious to Africans that the consumer driven U.S. economy is gradually recovering just as China is little by little reducing its infrastructure expenditures and reducing the amount of raw materials it needs.

The consequences are serious: instead of playing the West against China for cash and investment as it has in recent years, Africa threatens to become a beggar for aid again. In Washington, Africa’s leaders hope first of all for an extension of the African Growth and Opportunity Act, which allows the duty-free export of nearly all African goods until the end of 2015 into the United States. The African leaders are pressing for another 15 years until 2030.

But also with security questions, especially the fight against Islamic terrorism that has gotten out of control particularly along the Sahel zone, America and Africa share more in common than many countries between the Cape and Cairo might have believed up until now.


US President Barack Obama at a business forum during the US Africa Leaders Summit in Washington DC on August 5. Source: AP


Because the United States does not have the funds to pump more and more aid to Africa, it is now up to the continent’s leaders to make incentives for a stronger cooperation with the western private sector.  They also earnestly need to rethink their blinkered China-oriented policies. They would do well to remember Mr. Obama’s admonition that the Africans themselves hold the future of their continent in their hands and that they should finally take more responsibility for their own fate.

Because unlike many in the West who still connect Africa’s development to the allocation of ever more aid, Mr. Obama long ago pointed out Africa’s most basic problem: its corrupt, irresponsible elites, who enrich themselves from the continent’s natural wealth at the expense of their own countries.

The author is Handelsblatt’s Africa correspondent. He can reached at:

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