The Chinese and Americans are coming, running

Nairobi. As the Chinese make deep inroads into Africa, America is counting on soft power – and the continent’s young people – to stay on top.

When the United States ambassador to Uganda, Scott DeLisi, arrived in Kampala last year, it took about four weeks before a slot could be found for him to present his credentials to President Yoweri Museveni.

When his Chinese counterpart, Zhao Yali, arrived in Kampala, it took only four days.

There is perhaps little to read in such minor details beyond scheduling difficulties but there is no doubt that China’s influence in Africa has grown significantly, on the back of Beijing’s infrastructure diplomacy.

China overtook the United States as sub-Saharan Africa’s largest trading partner in 2009 but both remain key markets, with total trade between the three regions increasing every year over the last decade or so, except during the economic downturn in the US in 2009.

America’s trade with Africa rose from about $30 billion in 2001 to just over $100 billion 10 years later while China’s grew more dramatically, from about $10 billion to about $130 billion over the same period, according to collated figures from the UN and other official sources.

President Obama is unlikely to announce any major departures from the existing US policy towards sub-Saharan Africa, which has at its core an emphasis on building democracy, promoting development, supporting commerce, and strengthening security.

The United States already has major policy instruments in its dealings with Africa, including the Presidents Emergency Fund for Aids Relief (Pepfar), the African Growth and Opportunity Act (Agoa), the Millennium Challenge Act and at least two more recent initiatives on food security and climate change.

A lot has been made about China’s growing influence in Africa and its policy of non-interference in domestic political affairs, which makes it an attractive partner for many of the continent’s less-than-democratic leaders.

The political and economic parallels between China and the US in Africa need to be put in some context. In reality, there is very little direct competition between Chinese and American firms in Africa.

Most of the US firms are involved in the higher-end of the market, such as renewable energy, computer software and medical equipment, while Chinese firms dominate the lower, consumer-goods category.

Both China and the US are involved in the ‘African Olympics’ but the former are dominating the sprints and long-distance races while the latter are winning medals in elite sports like fencing and water polo.

The point of confluence is oil. But here again both the US and China simply dominate the trade in Africa’s natural resources. A lot of the growth in trade over that last decade has been fuelled by an increase in exports of crude oil from Africa to the two powers.

The difference is that China has diversified its appetite for other natural resources and grown its exports to Africa much faster, overtaking the US in this area a decade ago in 2003. By 2011 the value of China’s exports to Africa were three times those of the United States.

While America’s exports grew from $6.8 billion in 2001 to $20.3 billion in 2001, China’s grew from $4.4 billion to $56.3 billion over the same period.

Official US government figures show that in 2001 68 per cent of US imports from Africa constituted crude oil and related products while 14 per cent were ores and other minerals (the comparable figures for China were 61 and 19 per cent respectively).

By 2011 that figure had risen to 81 per cent of oil imports by the US and 9 per cent of minerals, especially platinum and diamond, while China’s oil imports were up to 59 per cent and 32 per cent imports of lower-end minerals like iron ore and copper.

The bigger story about China and American interest in Africa is actually the lack of effective African interest in the US and China markets.

Although the two countries have gradually opened the door to duty-free exports to their markets, African countries still export very little and when they do it is mostly raw materials like crude oil, timber and mineral ores.

For instance, although Agoa opened the door to over 6,000 African products to enter the US market duty-free, 96 per cent of the exports under the programme have been crude oil and related products.

Closer scrutiny of the data and the policies suggests that Africa would benefit more from US’s and China’s interest in its resources and markets if it figured out how to deal with the two powers and build beneficial partnerships.

Apart from competing at different ends of the spectrum, the US and China have, in fact, also been investing in largely different, but mutually compatible, arenas.

China’s investment in infrastructure is highly visible through the dams, highways and railway lines across Africa, paid for by a fund that grew from about $5 billion in 2006 to $10 billion in 2009 before doubling to $20 billion in 2012.

A lot of China’s investments in Africa are paid for through grants from China to Africa, including the $5 billion China-Africa Development Fund set up in 2006 by Beijing to support its firms seeking to invest in Africa.

Hard versus soft power

However, multilateral funding, especially through the World Bank, pays for a sizeable chunk of Chinese work in Africa, with Chinese firms only acting as price-competitive contractors.

Between 2001 and 2011, US firms won World Bank contracts worth $318 million in sub-Saharan Africa, mostly to offer management and technical advice. During the same period Chinese firms won contracts worth about $4 billion, most of them to undertake construction projects.

America’s investment, while less visible, has been equally important. Millions in sub-Saharan Africa are alive today thanks to medicines paid for by Pepfar, and US foreign direct investment in Africa was higher that China’s between 2007 and 2011, according to official figures out of Washington.

The US has also made qualitative investments in boring-but-important areas, such as helping cut through red tape and supporting regional economic cooperation. This is one area in which President Obama is expected to make some policy pronouncements on his tour.

China’s non-interference policy means they can buy their way into any resource-rich country without having to worry about reputations. Obama and America’s dilemma is to live up to the high expectations and their own declared ambitions.

Despite calls for democracy and good governance, the US has continued to do business with some of the most unsavoury regimes on the continent, such as Gabon and Equatorial Guinea.

President Obama’s first term visit to Ghana, and his call in Accra for strong institutions rather than strongmen, might have been seen as part of the revolutionary process that gave birth to the Arab Spring, but citizens in many African countries suffering under the yoke of despotic rule have looked on as American geopolitical strategic interests triumphed over Washington’s principles.

Both China and the US are playing a long-term game. The Chinese are tying African partners into long-term infrastructure-for-natural resources deals that secure Beijing’s natural resource and geo-political interests for several years to come.

Policy wonks in Washington recognise disconnects between many geriatric African leaders and their increasingly youthful populations, and have been working quietly to empower youths to aspire to the higher ideals of good governance.

Expect President Obama to shed more light on his – and America’s - faith in Africa’s young people.

Ultimately, however, the battle for Africa is not one for the present resources but future potential. The real contest is between China’s hard power and America’s soft power. The real tragedy is that Africans and their governments are largely participants, rather than contestants, in the battle for the future of the continent.

Far from arguing about which of the two giants is better, it is time for Africans to get busy and figure out how they can benefit from the clash of the titans.