By Ignoring Africa, US Cedes Jobs To China

It is old news that China has aggressive commercial ambitions in Africa, but fresh numbers reveal the depth of China’s success—and raise the stakes for U.S. dithering.

A recent Ernst & Young report shows that China more than doubled its foreign direct investment (FDI) projects in Africa in 2016, and that the value of these projects outweighs U.S. investments by a factor of 10. Moreover, China’s Commerce Ministry recently announced that China-Africa trade increased by 16.8% year-on-year in the first quarter of 2017. As if that was not enough, various African leaders were courted at a summit in Beijing last month, which promised extensive deals in infrastructure and trade under China’s “One Belt, One Road” initiative. All of this serves as an exclamation mark on the following sentence: The United States must step up its game on U.S.-Africa trade and investment.

Moroccan King Mohamed VI (C-L) and Li Biao (C-R), Chairman of the Chinese group Haite, attend the launch of a Chinese investment project in Morocco on March 20, 2017, at the royal palace near Tangiers. (Photo credit: FADEL SENNA/AFP/Getty Images)
Unfortunately, the U.S. has been slow to stake out a serious commercial strategy toward Africa, and U.S. companies by and large continue to overestimate the risks of doing business in the region. In contrast, China has sustained a policy of deliberate engagement and investment on the continent—and is making enviable returns in the process. Across Africa, China’s infrastructure projects generate earnings worth around $50 billion a year, which directly and indirectly translate into numerous jobs for Chinese citizens.
Building on a strong legacy of bipartisanship regarding U.S.-Africa policy, the Obama Administration deepened commercial ties on the continent, including through initiatives like Power Africa (designed to double electricity access in the region) that garnered broad Republican support. Indeed, U.S. FDI in Africa surged by over 70% from 2008 to 2015, on a historic-cost basis. Yet, in absolute terms, much more remains to be done to fully capitalize on Africa’s potential to contribute to U.S. growth.

Worryingly, the Trump Administration is so far heading in exactly the wrong direction. The policy signal to increase U.S. investment in Africa is no more. Whereas President Obama called for stronger U.S.-Africa economic ties—as did key Cabinet-level champions—the Trump Administration has shown no senior-level interest in this agenda. The raft of vacant positions across key federal departments compounds the problem.

Grant Harris

Mr. Harris is CEO of Harris Africa Partners LLC and was senior director for Africa at the White House from 2011-2015.