VENTURES AFRICA – Following criticism that his administration has not done enough to boost trade with Africa in the face of increasing Chinese involvement in the continent, and facing an election campaign, US President Barack Obama has moved to scale up American investment in Africa.
With Africa now home to some of the world’s fastest-growing economies and China tying up long-term access arrangements with a number of resource-rich African countries, Obama, who faces a battle for re-election with Republican Mitt Romney, has laid out a strategy paper that touts the continent’s potential “to be the world’s next major economic success story” and pledged to work with the region on trade and investment.
Obama has come under criticism for his lack of encouragement to the private sector to get more involved in Africa. Stephen Hayes, president of the Corporate Council on Africa, a US business group, said that though the strategy paper was a positive step it contained few new ideas and a lack of consultation. He said Obama has not done enough to involve the private sector in planning on Africa and compete against big Chinese firms.
Two-way trade between China and Africa totalled just $8.9 billion in 2000, but grew more than 1,400 percent over the next decade to $127.3 billion in 2011, according to a U.S. Congressional Research Service report. Meanwhile, trade between the United States and the more than 40 countries that make up sub-Saharan Africa hit a record $104.1 billion in 2008, but fell sharply during the financial crisis and totalled $94.3 billion last year. New American investment has been low, about $3.2 billion in 2010, compared to about $36 billion flowing in from China and the rest of the world.
Obama’s intervention is a response to increasing alarm over the inroads being made by China, with lawmakers introducing legislation aimed at increasing US exports to Africa by 200 percent in the next ten years.
“Increasingly I am hearing: ‘The U.S. has given up on Africa as a market,’” Democratic Senator Dick Durbin said. “While we’re building institutions (in Africa), China and others are building markets and we’re being left behind.”