Obama: Engaging Africa

by May 15, 2013

Africa has been looking up to its most powerful son, President Obama, since he was first elected. While his appeal has diminished to some extent, he is still revered in the continent. The feeling is deep, partly because unlike most African Americans, Obama is only one stage removed from the continent, the son of an African who went to America as a student. While one would expect this bond to ensure favourable treatment by the most powerful man on the planet, it must be highlighted that Obama is an American first and as such, he will be expected to put his country first. This means that geo-political factors are paramount. In the totem pole of geo-politics, Africa comes quite low in the scale. Obama’s attitude and the party he represents means that he is likely to have a principled approach to the continent. His mantra, change and his party’s inclination, extoling achievement and American excellence while striving to empower low and middle income members of society and support for the most vulnerable, play a major role in Obama’s approach to Africa. Obama’s trips to the continent, a reflection of the message he is sending, have been a mixture of geo-politics and gesture politics. He has made fleeting visits to Ghana and Egypt, the former was gesture politics relating to democracy and the latter geo politics, to the most powerful country in the Arab world.

Criteria for engagement

What are the criteria for Obama engaging the continent? The factors that shape America’s relationship with Africa include: size of countries and their importance to the US; the long term relationship as an ally or foe; economic interests; security interests; how aligned are these countries with the values of America and; the needs of these countries, namely, their need for foreign aid. Obama has only visited one of the regional powers in Africa, Egypt. The visit and attention given to Egypt is an attempt by the Obama administration to maintain links with this long term ally in the face of the election of the Muslim Brotherhood in that country, a party that has traditionally been hostile to the US. The attention lavished on Egypt is due to its position in the Arab world, a major source of oil for America and its allies and, because it is also a key partner in Israeli-Arab relationship and therefore crucial in the defense of Israel, America’s closest ally in the region. Obama has recently stated that Egypt is neither an ally nor enemy, so the US is trying to reset the button so that Egypt gets back to being an ally. The fact that the new Secretary of State included Egypt in his first trip abroad and released $190 million aid for that country is how pivotal the US administration thinks that country is.

While size and importance to the US have played some part in engagement, including visits by the former Secretary of State, some of the major regional powers with significant American interests have yet to merit special treatment and an Obama visit. Regional powers, on the basis of their populations, economies and trade links that have not been visited by Obama are: Nigeria in West Africa, South Africa in Southern Africa and, Kenya and Ethiopia in East Africa. This is in sharp contrast to his visit to Ghana, a middle level country. The main reason for his visit to Ghana was to highlight the impressive democratic record of that country which has seen two changes of governments in elections; Obama is sending a strong message to Africa on democracy. America’s oldest ally in Africa, Liberia, has yet to be visited by the President but the Secretary of State, Hilary Clinton has made visits to this small country. The administration is also working with other long term allies on the continent on a range of issues.

The high focus on Egypt, the establishment of a station for drones in Niger and security arrangements with other African countries, demonstrates the US emphasis on security. Security is becoming a very important issue for the US as Al Qaeda franchises prop up in Algeria, Mali, Nigeria, Somalia and Kenya. America’s economic interests on the continent are largely oil based, as a major buyer of crude oil from Nigeria, Angola, Libya and Algeria. American investment and trade with the continent are low, with US Foreign Direct Investment (FDI) to Sub-Saharan Africa amounting to $3.4 billion in 2011, less than 1% of total FDI to the whole world, compared to 15% to Asia and 20% to Latin America. The value of trade between the US and Africa at $94.3 billion in 2011 was also very low, 1% of its world trade. Although trade between Africa and the US involves mainly crude oil and raw materials from Africa and manufactured goods from the US, America has made attempts, with modest success, through its AGOA programme to give preferential access to processed and manufactured products from Africa. Obama’s emphasis on good governance and democracy, relating to freedom of individuals, groups and businesses and the democratic and judicial process has shaped his point scoring. Obviously the US must have score sheets on these points showing how African countries perform and this together with interests noted above will determine US policies to them. The needs of countries, namely, the need for aid, play an important role in the US relationship with the continent and America continues to be a major source of aid to Africa.

Africa’s commitments to the engagement process

Africa should argue that the key criteria for American engagement should be economic development, good governance and democracy, in that order. The criteria are essential for Africa and are not just to comply with American conditions. Economic development is critical partly because of the level compared to other regions but also because good governance and democracy are essential corollaries of this criterion. The most vibrant economies have good governance, this is because endemic corruption, wars, monopolies, inefficient and corrupt politicians, bureaucracies and judiciaries are the hallmarks of low performing economies. What Africa needs if it scores high on the US sheet, is more trade and investment by US corporations to gradually replace aid flows. The US must continue to give a high score to the democratic process but this must be viewed in the context of how they improve the economic and social positions of citizens and the process must be real, not just ticking boxes. While linked, economic development, governance and democracy are three discrete issues and so the rewards for points scored must be cumulative. A country may score high on economic development and good governance but have a less than sterling performance on the democracy criterion; the total cumulative score of these three criteria should determine US policy. In such a scenario, the US should consider strong engagement even if countries have a low score on one but score high on the other two. A notable case is Rwanda, which scores high on economic development and governance but not on democracy; such a country should still have a high positive rating and corresponding US favourability. Many countries have the trappings of democracy but this has yet to manifest itself in changes of government in elections, economic freedom, freedom of expression and association, legal independence, low corruption levels and due process that come with real democracy. A proper analysis should reveal countries that are making efforts on all these indicators. Economic development, governance and democracy should form the African commitment in its engagement with the US.

US commitments

What does Africa expect from America, that is, US commitments in the engagement with Africa? Obama should have a vested interest in Africa from where his father hails. America’s Euro-centric foreign, trade and investment policies were partly based on the fact that most Americans trace their origins to Europe. It was another Democratic Party colleague of his who initiated a grand gesture in the form of Peace Corps, President Kennedy. Peace Corps have and continue to play an important role but Obama needs to shift the emphasis to trade and investment. He needs to try to build on if not surpass the good work of his predecessor G W Bush who irrespective of his faults, initiated and supported aids programmes and trade with Africa; Bush also made ten visits to the continent. America needs to tap into the continent’s resources for the benefit of both parties. This should include investments in farming, agri-business, mining, manufacturing, infrastructure and tourism.

The US, particularly with the preferential access given to goods processed and manufactured in Africa, has a policy that aims to move Africa up the product chain. Engaging Africa in investment and trade is an attractive policy for the US. The continent has an impressive array of minerals. It offers opportunities for agri-business and processing of its raw materials and the US will be diversifying its supply base. Africa is geographically close to America and the US has an impressive network throughout the continent based on language, aid programmes and the millions of African who have studied, lived and are residing in the US. In practice American companies are hampered by US legislation, notably anti-bribery laws. Investors from many other countries do not have such restriction, a crucial factor in African countries with high corruption levels. Obama needs to further develop and market AGOA and the benefits and advantages noted above while pressing Africa on its commitments to ensure a level playing field for US investors.

While Obama’s emphasis on good governance and democracy is a good thing, he needs to load the dice in Africa’s favour and play some realpolitik. This means that the rewards to African countries that score high on the engagement criteria must be very high. Visits to Ghana and other countries that score high on the American score sheet must be backed by concrete efforts to promote trade, investment and other links. The objective would be to increase FDI, joint venture projects and help develop private enterprises in Africa. Measures will include: improved market access through programmes like AGOA that reduce duties for African products; trade missions, exhibitions; training and; marketing and promotion of products and investment opportunities in Africa. Strong links should be established with political and civic groups to encourage and train them and exchange information on good governance. This will be a strong incentive to other countries. America must engage the whole continent and in particular, it must build a rapport with regional powers such as Nigeria, South Africa, Kenya and Ethiopia. Such a policy will acknowledge the importance of these regional powers, who are major trading partners, but it should also be noted that engagement is an effective way to get those countries to clean up their acts with regard to corruption, democracy and the rule of law, with the US stressing that there will be significant benefits if this is done. The president needs to practice tough love. His speech in Cairo was one of the catalysts for the revolution in that country and other Arab states. He needs to do the same when he visits these regional powers and all other African countries.

The China Factor

The relative decline of American interests in Africa is shown when comparison is made with the new kid in the block, China which has been very keen on engaging Africa over the last fifteen years. While the US- Africa trade is significant, it is increasingly dwarfed by that between China and Africa. Trade between China and Africa increased from $8.9 billion in 2000 to $127.3 billion in 2011, an increase of 1,423% over that period. The Chinese are major investors in infrastructure projects on the continent.

From an African perspective, America should have an edge over China. American investment and trade are more favourable to Africa relative to China’s in a number of ways. American companies are more likely to employ African workers, who will be trained in new skills and generate spending in the community. This is largely an economic issue because the high cost of American personnel means that American companies would need to hire Africans. America has made attempts to move Africa up in the production chain through its AGOA programme. America has a record of outsourcing production and manufacturing which could benefit Africa.

While the Chinese have undertaken major infrastructure projects, African countries have often had to pay a high price and the way Chinese projects are structured has resulted in problems in their long term viability. Chinese infrastructure and investment projects typically involve Chinese workers at all levels, equipment, support and even food. The multiplier effect to the economy and capacity building are therefore minimal. Africa has had a raw deal from China in counter trade infrastructure projects where China makes investments and is paid in raw materials. One of the most obscene project was the agreement in the Democratic Republic of Congo in which that country accepted £3.5 billion investment in its infrastructure and in return China stands to make as much as £75 billion from the mining concession according to the Daily Mail newspaper. China wants Africa’s raw materials and minerals but makes little or no investment in processing and manufacturing.

America faces a formidable challenge from China awash with US dollars after running up huge trade surpluses, unencumbered by corruption laws, with low cost consumer goods and low labour costs. Furthermore, the political elite of many African countries, who gain from bribery and cheap consumer goods are often on the side of China and do not look at the long term issue, namely, that China is stifling development by keeping Africa as merely a source of raw materials and denying the continent the chance to rise up in the production chain into processing and manufacturing. Obama can counter this in a number of ways. He needs to ram up the AGOA programme, encourage US companies to increase investment and trade with Africa and push for improvements in governance and democracy. The most effective of these measures is the last, governance and democracy. A free press will provide a critical assessment of these projects, anti-corruption legislation will deter politicians and bureaucrats from making bad deals, a strong judiciary will penalize crooked politicians and bureaucrats. And the democratic process will allow parties to run against bad deals. This will create a level playing field for Chinese, American and other investors, resulting in effective competition to the benefit of Africa.

Make Africa a priority

My wish is that President Obama makes a grand tour of the continent. The president needs to make US policy on Africa a high priority because of his heritage, the benefits to both America and Africa, the fact that American investment and trade can be more favourable than other competitors, the fact that the continent needs all the support it can get and in the interest of world peace. Europe got the Marshall plan after the Second World War; the Israelis get the highest US aid per capita in the world, followed by the Palestinians. Africa can do with support but with a different twist. The focus must be on trade and investment. This objective will benefit Africa and the US and the cost of measures noted above will be modest, particularly when compared to current US aid to the continent. Africa on its part must create the conditions for this engagement to take place by investing in the economic, political and legal framework and its infrastructure to make the continent more attractive and facilitate a productive relationship with the US.

J Boima Rogers is the principal consultant at Media and Event Management Oxford (MEMO)