Obama in Africa: Can US rival China's new clout?
President Obama arrives in Ghana this weekend, but China's booming Africa presence may mean that he'll have less leverage to advance US interests than his predecessors.
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"But the rest of it will be money that goes from one Chinese bank to another," says former US Ambassador to Ethiopia David Shinn. "And this has been the pattern across Africa. How can a Western company compete with it?"Skip to next paragraph
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Obama's plans to ramp up US business in Africa
In the run-up to Obama's Ghana visit, his administration has expressed its desire to ramp up American business activity in democratic places like Ghana, both to forward US interests, and to encourage good governance on the continent.
Obama's administration is particularly focused on agriculture, which many economists predict will be Africa's major growth economy in coming decades. In April, the president doubled agricultural investment earmarked in the Food Security Act, much of which will be spent on African states like Zambia, Malawi, and Uganda.
But beyond agriculture, health, and humanitarian aid, when it comes to the most conspicuous monuments of Africa's development – the power plants, cloverleaf highways, mines, railways, and stadiums that make parliamentarians popular – the United States finds itself on the sidelines, watching Chinese banks write loans for Chinese companies to build up Africa.
"US companies don't build stadiums, don't build roads, don't build dams, don't do energy infrastructure," said Witney Schneidman, a top Africa adviser for Obama's presidential transition team. "If you look at the sector where they do compete, principally the extractive sectors" – oil, gas, minerals – "US companies are well represented."
A back door to Africa's mines
Increasingly, however, Chinese firms are using construction projects as a back door into Africa's mines. In Gabon, Exim Bank is financing an $800 million infrastructure undertaking – railways, dams, ports – in return for a quarter century's access to an iron ore deposit.
Chinese companies are building hydrodrams in exchange for Sudanese oil, Guinean bauxite, and Ghanaian cocoa. In the Democratic Republic of Congo, the Chinese government agreed to loan $9 billion for schools, clinics, and roads in return for cobalt and copper mining privileges.
Such minerals have powered China's industrial revolution – and return to the continent as components in affordable Chinese-made radios, phones, and batteries.
As it is for many African agricultural nations, China's interest in Ghana lies less in what Ghana sends China – roughly $50 million in exports annually – than in what it buys back. That may soon change: An American and British partnership discovered oil off Ghana's shore in 2007 and China's state oil company intends to buy access.
But beyond oil, analysts say American companies are shirking opportunities in Africa.
"Except for oil, where investment money goes in no matter what, there hasn't been much Western investment in Africa in recent years," said Mr. Shinn, the ambassador. "This is an area where the United States really needs to make a push, particularly as we start coming out of the economic funk we're in."
For the short term, analysts expect Obama to promote democratic countries like Ghana to American business leaders.
"To most Americans, Africa is still a continent of crisis, as opposed to a continent of opportunity," said Mr. Schneidman, the Obama advisor. "To those of us who pay close enough attention, it is definitely a continent of vast opportunity. Now, I think part of the administration's challenge is getting that message out, and getting that awareness to American companies."