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The US-Africa leadership Summit has ended, with $17bn in investment pledges, what should the ordinary African read into this? What does it mean to the man in the street, what difference does it make? Was the summit about Africa or about the USA? For answers to these questions, we need to look at History and at International Politics.
Africa has always been at the centre of the battlefield, firstly during the Scramble for Africa, when every colonial power was fighting for a piece of the continent, secondly in the post-colonial period and during the cold war and in the present day, all for different reasons.
The more the colonial masters expanded their empires, the more they secured vital resources for their economies and the more they created jobs for their own citizens who were often seconded to the colonial administrations and private companies in various capacities and the more influence they exerted and the more powerful they became.
During the Cold War, Africa was once again the focus of the political battle between the North Atlantic Treaty Organisation (NATO) and the Warsaw Pact, both of which were bent on extending their strategic influence in Africa.
African turf also suffered from the ideological battle between Capitalist West, comprising mainly the United States of America and its Western European allies and the Socialist/Communist East, comprising of the Union of Soviet Socialist Republics (USSR) now Russia, and its Eastern European allies, and Communist China. The two forces/powers were battling to extend their influence in Africa in order to tip the balance of power in their favour.
At the time, the East had the upper hand in Africa resulting from the fact that most African countries were engaged in the battle for their independence from Western Colonial Powers and most Eastern European countries broadly supported the African cause by providing bases and military training of liberation movements as well as military hardware. They also seized the opportunity to instil their Socialist ideologies, emphasising how unequal and evil the Capitalist system was.
After the cold war, Africa was once again the focal point of the new economic order, with most seeking budgetary assistance via predominantly western institutions such as the IMF and the World Bank, most resulting in the largely unpopular Economic Structural Adjustment Programs, which led to the withdrawal of government subsidies to the local populations, highly inflationary economic environments which ultimately led to social unrest and the unseating of some governments. This happened via popular uprisings or by military coups.
There was a time when most African governments were so desperate they became charity cases, relying heavily on the generosity and good nature of their benefactors. Even this aid, came with conditions, Africans had no freedom to source appropriate and cheaper technology with the resources provided, the aid came with the condition that Africans had to source goods and services from the donor country, whether or not this technology in question was inappropriate or more expensive.
Given this background, one needs to understand the current actions of the Obama Administration and place them in perspective. It is common knowledge that American influence in Africa has been waning over the last few years while that of China has been increasing. Granted, the American Budget has been stretched over the last decade or so with their military involvement in Iraq and Afghanistan.
It is reported that China has overtaken the US as Africa’s largest trade partner. It would appear the US has woken up late to this reality and therefore has to play catch up. One has to do a reality check, and ask the difficult questions.
To answer this question we need to unpack the question into various components and also look at who stands to benefit more.
1. What is the American Foreign Policy?
Scholars of International Relations know and understand that American Foreign Policy is derived from, influenced and driven by America’s National Interest. People therefore need to understand that America’s involvement in most countries is neither a Diplomatic nor a philanthropic exercise rather to further and to protect its National Interest. This will explain why for Americans, Human Rights issues are more important in some countries than in others, or why the US will condemn China’s Human Rights record on the one hand but allow American companies to have their products manufactured in China, and benefit from the low cost base in that country to improve their competitive advantage on the other.
2. What is in it for Obama?
Firstly, Political Analysts believe President Obama realises that since he assumed presidency, he has done very little for Africa, in fact, his limited efforts have been eclipsed even by those of his predecessor, George Bush. Obama realises this and the fact that his time at the White House is running out, leaving him with little time to create a legacy, hence the historical summit.
3. What does the $17bn in investment pledges really mean?
A large part of this “investment” is really in the form of assistance by the US Government to US companies to find new markets in Africa. Most African countries do not have infrastructure, neither do they have the capacity to produce capital nor consumer goods. The assistance therefore creates jobs for an otherwise recession troubled American Economy. Under AGOA, one of the so called benefits to Africans is Trade Finance for American goods. While it helps African importers who would otherwise not be able to obtain finance from their domestic banks, the reality is that greater benefit accrues to the American exporting companies in that they are able to expand their markets and sell more in order to create more American jobs and further stimulate domestic demand.
Tanzanian President Jakaya Kikwete said Africa wanted to move away from a relationship of “aid donor and aid recipient" to one of investment and trade.
Kikwete told the forum that with Obama and senior officials encouraging the business community "to take Africa seriously, I think this time we will make it."
It is very clear from the above statements that Africa has been occupying a weak position for a long time in its history. The aid donor and aid recipient relationship is problematic in that it pities weaker states with their begging bowls against the stronger ones who dictate all the terms. By conceding that the Obama is encouraging the American Business community to take Africa seriously, Kikwete is acknowledging that Africa has not been taken seriously before. He also says, “….I think this time we will make it.”
The only time Africa will make it is if it elevates its status to that of an equal partner and manages to negotiate from a position of strength. The fact that the focus is back to Africa, this time for different reasons, new discoveries of Gold, Platinum, diamonds, copper, oil and Natural gas place Africa in pole position to really call the shots. Africa’s rising middle class provides a lucrative market for foreign goods, especially with the advent of the global village and accessibility of the internet.
Past economic relationships where foreign companies exported raw materials rather than establish facilities for refining and processing into finished goods thereby adding value, creating jobs and increasing the tax base and revenues of the host governments, instead benefiting their parent countries should change. Africa’s political leadership should insist on mining concessions that will benefit Africans, after all, they are the owners and custodians of these resources. On this position there should be no compromise!
The old adage goes, “he who pays the Piper, calls the tune”. If Africans want to dance to their own tune, then they need to pay the piper. This means African governments should adopt economic policies that consolidate their political power and enable them to generate sufficient revenue to build capacity, infrastructure, a solid institutional framework to ensure capital inflows to support the production of goods and services. This will enable Africans to literally call the shots and dance to their own music, there has never been a better time to do so.
For as long as Africa’s piper is paid by Americans, Europeans and the Chinese, we have no choice but to dance to their tune! It is only when Africans take control of their destiny that their administrations will be Governments of the people, by the people and for the people.
To borrow from the lyrics of Colombian born singer, Shakira’s 2010 Soccer World cup theme song, “It’s time for Africa!”
By Lizwelethu Lawrence Fengu.
