Economic Diplomacy and Africa’s Foreign Partners

:

Focus on the United States and China

Training Program for Young Diplomatic Talents from One Belt One Road Countries

27 June 2017

Fudan University

Shanghai, China

David H. Shinn

Elliott School of International Affairs

George Washington University

The Principal Players

Africa’s external partners fall into three tiers of relative importance based on historical
ties, diplomatic links, trade, investment, aid, political and security engagement, diaspora
communities, movement of nationals between countries, and cultural and soft power influence.

Tier One:

1. United States

2. China

3. France

Tier Two:

In no particular order, the following four countries constitute the next tier: India,
Germany, United Kingdom, and Japan.

Tier Three:

In the third tier, again in no particular order, are the Netherlands, Belgium, Spain, Italy,
South Korea, Brazil, United Arab Emirates, Saudi Arabia, Turkey, Portugal, Russia, the Nordic
countries, and Canada.

Total trade (imports and exports) is one component used to place countries in these three
tiers. Trade is one of the indicators that is less subjective and for which reasonably good data
exist. Of course, the dollar value of trade varies from year to year.
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Using 2015 International Monetary Fund statistics by value in billions of dollars, Africa’s
twenty largest trading partners were: China ($145 billion), France ($70 billion), India ($53
billion), United States ($49 billion), Italy ($48 billion), Germany ($42 billion), Spain ($42
billion), Netherlands ($28 billion), United Kingdom ($25 billion), Belgium ($20 billion), Japan
($19 billion), Turkey ($17 billion), South Korea ($16 billion), Brazil ($16 billion), United Arab
Emirates ($13 billion), Saudi Arabia ($12 billion), Portugal ($11 billion), Russia ($11 billion),
Singapore ($9 billion), and Malaysia ($8 billion).

The Motivation for Engaging in Africa

Most of these foreign partners seek the following from African states:

1. Access to natural resources.

2. Increasing their exports to Africa.

3. African political support in the United Nations and international forums.

4. Investment in profitable enterprises in Africa.

5. African cooperation in countering terrorism, piracy, and international crime that may
harm their interests in Africa or the homeland.

Some foreign partners have more specific objectives:

1. Obtaining African support for countering narcotics trafficking (United States and
European Union countries).

2. Building African support for countering regional security threats (Saudi Arabia,
United Arab Emirates, United States, France, United Kingdom).

3. Gaining military access to African airspace and ports (United States, France, United
Kingdom and to some extent Saudi Arabia, United Arab Emirates, China, Japan, Italy, Germany,
India).

4. Stopping or at least limiting emigration from Africa (European Union countries).

Some foreign partners have specific objectives that pertain only to one country:

1. China (continent-wide acceptance of “One China” policy).

2. Turkey (shutting down Gülen Movement activities in Africa).

3. Brazil (obtaining support for UN Security Council permanent membership).

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What African Governments Want from Their Partners

So long as these partners offer political support and/or financial resources, the African
governments welcome the engagement of external countries. They see engagement by more
partners as a way to leverage support from both traditional partners and new partners. On the
other hand, African governments (as distinct from civil society) are not receptive to
political/economic conditionality or pressure.

Nearly all of Africa’s developing country partners such as China, India, and Brazil
eschew political conditionality. Many African leaders make invidious comparisons between the
political conditionality of the United States and some Western countries with, for example, the
policy of China, which avoids political (but not economic) conditionality.

The Role of Foreign Colonial Powers in Africa Moving Forward

As to the role of foreign colonial powers in Africa, much will depend on the internal
coherence of the governments in the former colonial countries and the strength of their
economies. If the government is solidly in control and the economy strengthens, the former
colonial governments will remain engaged in Africa and even increase their activities above the
level of recent years. On the other hand, if the former colonial government is weak and the
economy of the country does not improve, it will become less engaged.

There is no reason why the African governments will be less receptive to the former
colonial power unless it is perceived as pushing too hard on political conditionality. With all the
new actors in Africa, the African governments have greater ability to pick and choose their
partners but the fact remains that ties to former colonial governments, especially France, remain
strong.

African Civil Society Reaction to the Entry of External Actors

African opinions about foreign economic partners are difficult to parse because there are
many different African publics and a significant number of external actors. In addition,
relatively little public opinion polling has been done on this topic in Africa.

In 2016, Afrobarometer surveyed thirty-six countries in Africa on attitudes towards
China. Almost two-thirds of the respondents said China’s influence was “somewhat” or “very”
positive while only 15% described it as somewhat/very negative. Some 56% of Africans said
China’s development assistance is doing a “somewhat” or “very” good job of meeting their
country’s needs.

On the other hand, 28% saw the former colonial power as wielding the greatest external
influence in their country, followed by China (23%) and the United States (22%). Some 30%
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cited the United States as having the most popular model for national development followed by
China (24%) and the former colonial power (13%).

A 2014 study of 9 African countries by the Pew Research Center found similarly high
favorable ratings for China. Only in Egypt and South Africa was China’s favorable rating less
than 50%. Chinese traders in Africa were strongly criticized by their African counterparts as
were Chinese products that compete because of lower cost with similar African-made products.
At the same time, African consumers appreciated the lower cost of Chinese products assuming
the quality was at least as good as the comparable African-made product.

Africa and the United States

African publics are more receptive to the United States than are most African
governments. Both African governments and publics recognize that the United States wields
more military and economic power than any other state; that counts for something. Many
Africans appreciate the openness of American society and the relative democracy it has
established.

The fact that the United States discusses its faults openly, has a system of checks and
balances, an independent judiciary, institutions for redressing grievances, and a free press are
admired by most African members of civil society and even some governments. Looking
forward, much will depend on the goals and priorities of the Trump administration; we have
heard very little so far about its policies towards Africa. The three most important Africa policy
positions in Washington—assistant secretary of state for African affairs, deputy assistant
secretary of defense for African affairs, and the senior director for Africa in the National Security
Council—have not yet been filled.

Based on what little we know of the administration’s policies as they impact Africa, the
following four outcomes seem most likely.

1. There will be reductions in U.S. aid to Africa. The Trump administration has stated
that it wants to cut the budget of the State Department and foreign aid by about 30 percent.
While there will be reductions in U.S. aid to Africa, it will not be nearly as large as the 30
percent requested by the Trump administration. Congress approves the foreign aid budget
numbers and it is not prepared to accept such a draconian reduction.

2. Sub-Sahara Africa has always been the lowest priority in U.S. foreign policy as
compared to other major world regions. This will not only continue under the Trump
administration but Sub-Sahara Africa may drop even lower relative to the rest of the world as the
new administration formulates its global policies.

3. Counterterrorism has been the single most important component of the Bush and
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Obama administration policies in Africa. This will not only continue under the Trump
administration, but take on added importance, especially as compared to the Obama
administration. In fact, counterterrorism programs will likely take resources away from other
U.S. programs and activities in Africa.

4. The Trump administration will pay less attention to lecturing African governments on
human rights and democratization. While this will not disappear as a component of U.S. policy
in Africa, it will be used with much less frequency in interaction with America’s perceived allies
on the continent.

Economic Challenges for African Countries

African commodity exporting countries have experienced serious challenges following
the sharp drop in oil prices and many minerals such as copper and cobalt. These commodity
prices are determined by global demand; African countries have little control over them and
commodities constitute the overwhelming majority of African exports by dollar value.

After African countries experienced collectively a GDP growth rate of about 5 percent
annually for 10 years, it began falling sharply in 2015 and dropped to 1.4 percent in 2016. It
may improve to 2.6 percent in 2017 but will remain well below the earlier 5 percent average.

The drop in oil prices has been a boon for African oil importing countries as they pay less
for the cost of fuel. But their gains have not been enough to offset the losses in the oil and
mineral exporting countries. China is Africa’s largest trading partner and the drop in commodity
prices has significantly worsened, from an African perspective, the trade relationship.

Using IMF statistics for 2015, 39 African countries had a major trade deficit with China.
Ethiopia’s trade deficit with China was more than $3 billion, Tanzania’s just under $4 billion,
Kenya’s just under $6 billion, Egypt’s was about $11 billion and Nigeria’s more than $12 billion.

Nine African countries in 2015 had significant trade surpluses with China, but only oil-
exporting Angola with a surplus of $12 billion had a huge surplus by dollar value. In the case of
six countries, including South Africa, China’s trade was about in balance.

Africa had a huge global trade deficit in 2015; the largest deficit by far was with China.
The deficit with France and Germany was significant and with the United States modest. In the
case of India, Netherlands, Spain, Japan, and United Kingdom, Africa’s trade was almost in
balance.

The downturn in the global economy and sharply lower African GDP growth rates are
raising growing questions about Africa’s debt held by international financial institutions and
countries such as China. Foreign aid levels are generally flat and countries such as the United
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States are considering reductions in aid. Foreign direct investment in Africa seems to be holding
up reasonably well, but this also needs to be monitored carefully.

While we may have seen the low point in recent years of Africa’s economic relations
with its major partners, it will take several years for a rise in commodity prices to return the
African continent to the 5 percent annual growth rate of the recent past.

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