Africa: A Missed Opportunity

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Image from Wikimedia Commons

by Patrick Kelly, Elmhurst College

For most Americans, Africa is a far-off and exotic continent that only really enters our collective attention when a natural disaster or terrorist attack occurs there. To a degree, the US government shares this sentiment, with the State Department expressing little interest in developing long-term relations with African states outside of humanitarian initiatives or counter-terrorist efforts. Private investments by US businesses still remain relatively limited as well.

Nevertheless, other nations, most notably China, are taking quite an active interest in Africa. In fact, one only has to look to the southern African nation of Zambia – where most of the copper, cobalt, and nickel mines have been bought up (or are heavily influenced) by Chinese firms – to see China’s vested interest. Between 2009 and 2010 China invested over $400 million into Zambia’s mining industry. Besides mining, China also has an increasingly visible presence in the trade industry. There are now about 300 Chinese companies operating in Zambia, with more appearing each year. Zambia also hosts two of China’s Special Economic Zones located in Africa and the Bank of China recently opened a new branch in the Zambian capital, Lusaka, the first to offer Chinese currency banking services on the continent. Sino-Zambian trade has increased dramatically, growing from just $100 million in 2000 to near $2.8 billion in 2010. This scenario is repeated in a number of other African countries including: Egypt, Sudan, Algeria, Mauritius, and Angola. In 2011, Chinese investment in Africa exceeded $40 billion, with at least $14.7 billion coming in the form of foreign direct investment. Signs of China’s influence can likewise be seen elsewhere, such as in South Africa where an increasing number of schools (and tutoring services) have begun teaching Mandarin. China also has a growing presence within the African Union; the new AU headquarters, located in the Ethiopian capital of Addis Ababa, were entirely paid for with $200 million in Chinese funds and constructed by Chinese laborers.

India is another nation that is increasingly eyeing Africa with interest. The Indian Prime Minister, Manmohan Singh, recently promised over $5 billion in loans to African nations in order to develop greater trading relations. Another $1 billion was offered to pay for education, railways, infrastructure development, and peacekeeping operations. This is a considerable increase in aid from the $25 million that India sent to Africa in 2010, and marks a noticeable shift in India’s involvement on the continent. Trade between India and Africa has risen steadily over the years, though much of this currently centers on oil exports. However, India has other interest in Africa as well. In South Africa, Indian firms are increasingly involved in the diamond and gold industry. Furthermore, India is helping develop a number of coal-fueled power stations and exploring hydrocarbon projects in Mozambique. India is also seeking to develop uranium mines in Malawi and Niger to satisfy its growing nuclear energy needs. Other nations like Brazil, Russia, Saudi Arabia, and Turkey have likewise begun to heavily invest in various projects throughout the African continent.

So what should the US do? Our current policy of pouring large amounts of foreign aid into Africa has failed completely and we cannot afford to continue in this manner. Rather, the US should seek to develop long-term relations with the African people through foreign direct investment. This is similar to what China and India are doing and, most significantly, it bypasses one of the major flaws of conventional financial aid. In the conventional model, aid is delivered to the government or military of said country, little if any ever trickles down the people or the general economy. China and India have bypassed this flaw by directly investing in the infrastructure, industrial, and economic apparatuses of various African states.

Africa’s strategic importance for America will only continue to increase in the 21st century. The continent is rich in natural resources like oil, gold, copper, uranium, timber, and coal and thus has great geo-political importance. If America wants to rebuild its economy and maintain its international interests, investing in Africa is an option it should certainly consider.

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