There is a battle for supremacy and influence in trade partnership with Africa. This keen battle is between the US and China and is playing out across Africa continent. The growing influence of China in the economic and political sphere of Africa is giving Western policymakers sleepless nights. According to the International Monetary Fund (IMF), Africa boasted seven of the fastest-growing economies in the whole world in 2017 and China has successfully placed itself at the forefront of the emerging world power. China has rolled out attractive bonuses in its relationships with Africa, they are taking over on the African trade fields without Africa’s opposing. Perhaps, Africa enjoying Chinese trade recipes.
There is an ongoing trade integration between African nations which had led to the recent launching of the African Continental Free Trade Agreement (AfCFTA) which is aimed at bringing together all the 55 African Union member States into the world largest free trade area, spanning about 1.2billion people. Chinese firms have been cashing in on this by busily building ports, bridges, railways and roads that will make this integration a smooth success. In most African shops, Chinese products are found easily and affordably. While China had recently emerged as Africa’s biggest trade partner, US-Africa trade has been nosediving dramatically.
Between 2002 and 2008 after the signing of the Africa Growth and Opportunity Act(AGOA) which provided tariff-free access to 6500 products for qualifying sub-Saharan countries, US-Africa trade grew to $100 billion. However, according to figures by US Agency USAID, the combined total value of trade from Africa to the US in 2017 was only $39 billion and this has pushed the US into the 3rd position of Africa’s largest trading partner with China emerging first, followed by European Union as the second. In 2017 alone, the value of Africa-China trade was $148 billion while same trade was $215 billion in 2014. In the first six months of 2019 alone, the General Administration of Customs in China has put China’s total import and export with Africa at $101.86 billion.
According to the American Enterprise Institute (AEI) which tracks China Global Investment, the total value of Chinese investments and construction in Africa is closing in on $2trillion since 2005.
China has also recently consolidated its economic influence further by the recent launch of a $1bilion Belt and Road infrastructure fund for Africa and also delivered last year a whopping $60billion African aid package. Before now, the US, Europe and France have never faced any serious competition for economic or political influence in Africa in recent decades. Hence Washington’s top diplomat in Africa, Tibor Nagy is trying to address the issue and restore the supremacy of influence to Washington.
Some of the factors highlighted as responsible for the US-Africa trade downturn are the expansion of US Shale, limited product diversification and anaemic African growth. The slowdown, however, isn’t peculiar to the United States. Trade between Africa and most European countries declined between 2010 to 2017. The United States needs to do more to convince its companies that are still sceptical, squeamish and uninformed about investing in Africa. China’s dominance in infrastructure is advantageous to the United States cause as it will aid in providing a functioning transportation network to smoothly move products and directly access consumers. Chinese firms are also more willing than the United States to bend rules, cut corners and engage in corrupt practices in the quest for business while also highlighting the risk of China trying to force Africa to deal with Chinese firms alone thereby preventing other foreign firms from competing and enjoying commercial opportunities.
Meanwhile, Chinese companies operating in Kenya as some negative by-products of China dominance. The issue of saddling developing countries with substantial hidden debts through its Belt and Road Initiative colossal infrastructure project that aims at building rails, roads, sea and other routes merging China, Central Asia, Africa and Europe. Two key reasons for the fall in US-Africa trade is the shift in American Energy demand which crashed from $99.5billion of oil and gas in 2008 to just $17.6 billion in 2018. This is because the US has replaced the Nigerian and Angolan crude oil with the US produced power. Also, the cost of export products like cars, aeroplanes, machinery from the US to Africa is relatively high when compared with such exports from China.