Posted by Aydanur Akkurt - Africa Oil & Power
Days before Donald Trump's inauguration as US President, the transition team asked some tricky questions about Africa.
President-elect Donald Trump has had extraordinarily little to say about Africa.
With rapidly growing populations in its 54 nations, Africa includes six of the world's top ten fastest growing economies. And while Trump has talked and Tweeted extensively about China, Europe, Brexit, Mexico, Russia, NATO, NAFTA and the TPP, he has been all-but mum on all things Africa, including America's trade agreement with many African countries, AGOA, and America's Power Africa initiative.
But, just days from the presidential inauguration, that began to change.
A four-page list of questions submitted to the U.S. State Department by Trump's transition team has provided the most insightful look into the new administration's stance on Africa yet. The questions on the list, provided to The New York Times, hints at an interest in business opportunities on the continent.
“How does U.S. business compete with other nations in Africa? Are we losing out to the Chinese?” asks one of the questions, according to the newspaper. Other questions take a critical tone on aid to Africa. Aid programs — from HIV and AIDS prevention to power generation — have been long-supported by past American presidents, including George W. Bush, Bill Clinton and Barack Obama. “With so much corruption in Africa, how much of our funding is stolen? Why should we spend these funds on Africa when we are suffering here in the U.S.?” the document asks.
While the list is not an outline of policy, and asking questions to the State Department about current international relations is quite normal for an incoming president, the tone and context of the questions could mean changes for U.S.-Africa relations, according to some policy experts.
Monde Muyangwa, director of the Africa program at the Woodrow Wilson Institute, is quoted as saying that “the framing of some of their questions suggests a narrower definition of U.S. interests in Africa, and a more transactional and short-term approach to policy and engagement with African countries” and might foreshadow “a dramatic turn in how the United States will engage with the continent”.
With the inauguration a day away, what do we know about Trump's plans for Africa?
The first casualty of the new administration?
Considering the tone of the questions to the State Department and previous Tweets from Trump calling aid to Africa a “waste”, development aid could well be in jeopardy; but, at the same time, the administration might well be looking more closely at better business ties.
There is no doubt that business opportunities in Africa abound: there is an incredible demand for energy, with about 60 percent of the continent without power; poverty is quickly being reduced with a rapidly expanding and more educated middle class; increased political and civil stability is spreading across Africa; and, by 2035, it is expected to have the largest labor force in the world. In fact, there is hardly an industry that isn't booming in Africa, with food and agriculture; retail, media and entertainment; fashion and beauty; real estate; technology; energy; construction and financial services all growing exponentially.
Still, though the list of questions hints at an interest in business, Trump has yet to address The African Growth and Opportunity Act (AGOA), first enacted in 2000 and recently renewed until 2025. AGOA, which provides trade preference and duty-free status to U.S. imports of products from certain Sub-Saharan African countries, is important to many African economies and has been fundamental to U.S.-Africa relations for almost two decades.
The transition team brought up AGOA in its questions in a somewhat critical tone: “Most of AGOA imports are petroleum products, with the benefits going to national oil companies, why do we support that massive benefit to corrupt regimes?”
According to Whitney Schneidman, a nonresident fellow for U.S. think tank Brookings Institute, AGOA “could easily be the first casualty under Trump.” Schneidman writes that Trump is “more likely to see AGOA as a ‘bad' trade deal than an innovative economic development program based on stimulating light manufacturing and trade.”
If Trump's rhetoric on other trade deals such as the North American Free Trade Agreement or the Trans-Pacific Partnership, as well as his nationalist and perhaps even protectionist trade views are used as indicators, AGOA could well be in peril.
“Are we losing out to the Chinese?”
The United States is quite possibly losing out to the Chinese in Africa, if trade figures are any indication.
China outpaced the United States as Africa's largest trading partner back in 2009, and the gap has only widened since. By 2015, Chinese exports to Africa totaled $103 billion, compared to U.S. exports of $27 billion, according to data from the China Africa Research Initiative at Johns Hopkins University, though the U.S. is still putting more money into Africa in direct foreign investment, according to a 2015 Ernst & Young report.
Since 2007, American companies have launched 700 FDI projects and invested $52.7 billion in Africa. Chinese companies announced 32 FDI projects in Africa in 2014, a total investment of $6.1 billion (however, it should be noted that Chinese FDI flows are more difficult to track accurately, as the data is not made public by the government).
Trump's newly announced head of the National Trade Council, Peter Navaroo, may have already answered the question. As stated in his book Death by China published in 2011, Navaroo said China is “moving relentlessly across Africa… locking down strategic natural resources, locking up emerging markets, and locking out the United States.”
China is not the only competitor when it comes to investing in Africa, with India, Europe, the United Kingdom and the United Arab Emirates investing heavily in the continent as well. While competition is fierce, the need is similarly demanding. In the oil, gas and power sectors alone, the investment needed is trillions. Africa's oil industry is estimated to need $1.6 trillion between 2013 and 2035; $721 billion is needed for gas infrastructure in the same time frame; and the power generation sector needs $30 billion annually through 2030.
Yinka Adegoke, Africa editor for Quartz Africa, in addressing the transition team's question on business competition in Africa, says African governments and business leaders can “leverage this concern to their advantage.” Adegoke adds that countries should be ready for that possibility by “ensuring the fiscal and regulatory environment is ready.”
Other questions asked by the transition team include:
“We've been fighting al-Shabaab for a decade, why haven't we won?”
“We've been hunting Kony for years, is it worth the effort?” referring to Joseph Kony, the Ugandan war lord
“Is PEPFAR (President's Emergency Plan for AIDS Relief) worth the massive investment when there are so many security concerns in Africa? Is PEPFAR becoming a massive, international entitlement program?”
“How do we prevent the next Ebola outbreak from hitting the U.S.?”
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