Obama out to woo African leaders at Washington summit

Summit with more than 40 heads of state seeks to revive US economic influence in continent where China has invested big

PUBLISHED : Monday, 04 August, 2014, 3:40am
UPDATED : Monday, 04 August, 2014, 3:40am

President Barack Obama is rolling out his country's most ambitious courtship of Africa in a bid to revive declining American economic influence on a continent where US spending power is overshadowed by China.

The US-Africa Leaders Summit in Washington this week is expected to host more than 40 African heads of state. The agenda includes US-Africa business as well as peace and stability in the region.

"This is the first time a US president has convened that many African leaders," said Charles Stith, the director of the African Presidential Archives and Research Centre at Boston University, and a former US ambassador to Tanzania.

The summit shows Obama wants to catch up with China on the continent, said He Wenping, the director of the Africa Research Office at the Chinese Academy of Social Sciences' Institute of West Asian and African Studies. "The US is likely to increase investment in Africa's energy and infrastructure sector, which will compete with China," she said.

In July 2012, then president Hu Jintao offered US$20 billion in loans to African countries over three years, double the amount Beijing pledged for the previous three years. The latest package is nearly triple the US$7 billion Obama pledged last year as part of his Power Africa initiative to double electricity supply in the continent by 2030.

"The Chinese have set the bar pretty high in engagement in Africa. Given the current tension between the White House and Congress, it's unlikely Obama can come up with anything close to these numbers in financing for Africa," Stith said.

China overtook the US as Africa's biggest trading partner in 2009. The US is now behind the European Union and China as the top trade partners.

US trade with sub-Saharan Africa fell 24 per cent year on year to US$72.3 billion in 2012, according to official US data. In contrast, China's trade with Africa topped the US$200 billion mark for the first time last year, while investment rose 44 per cent to an unspecified amount, President Xi Jinping said in February.

Roland Marchal, a research fellow at Sciences Po University in Paris, was sceptical that Obama's summit would make a significant impact.

"[Obama] has not shown any strong commitment to African countries," Marchal said. "So the impact of that gathering is going to be minor, except if Obama decides that [more] money would be poured into the continent."

Anthony Desir, a partner with the Strategic African Mineral Investment Fund, believed the US will make a significant impact on Africa's economy despite its lower investment levels.

"China has the cash, but lacks deal execution capability," Desir said. "The Chinese remain at a disadvantage in democratic and transparent economies, even if they spend vast sums. US initiatives only need to grease the wheel so that international capital markets recognise the promise of Africa. That pool of money is much deeper, more savvy and more flexible than China's bankroll."

Jean-Pierre Cabestan, the head of government and international studies at Hong Kong Baptist University, said to a certain extent Africa was considered by foreign powers as a zero-sum game, where US losses are gains by China. "But in many respects, it is not. The size of the cake is growing," he said.

The US courting of Africa "is a good thing, since it rebalances a relationship [with China] that is too asymmetrical, to the detriment of African countries".

The topic of regional stability at the summit may potentially be a sore spot for China, given the strengthening of US military ties with some African nations under the pretext of security and anti-terrorism, according to analysts.

Additional reporting by Teddy Ng