US must ‘play catch-up’ to China’s investment in Africa, commerce official says
- Deputy Commerce Secretary Don Graves says that US is Africa’s ‘partner of choice’ but that federal agencies must help reduce investment risk by American companies
- China’s ambassador to the US, Qin Gang, contends that Belt and Road Initiative projects have provided many African nations crucial infrastructure
American companies considering Africa need more support from Washington to reduce their investment risk, Deputy Commerce Secretary Don Graves said in a conference in Washington organised by the news outlet Semafor, at which his comments contrasted with those of China’s top envoy to the US.
“What we’ve seen over the last five to 10 years is … a huge opportunity for the US private sector [in Africa], but it’s incumbent upon the federal government to find ways to make sure that we’re making that pathway easier for US companies,” he said. “We took our eye off the ball, so to speak, and US investors and companies are having to play catch-up.”
Speaking shortly before Qin Gang, Beijing’s ambassador to Washington, Graves knocked China’s approach to investment on the continent, which he characterised as importing “tens of thousands” of Chinese workers.
The US is “the partner of choice” among African governments, he said, because of the technologies and knowledge transfer that US companies would bring, and because of their efforts to build the domestic workforce needed to maintain their operations in those nations.
Graves acknowledged, however, that the US needed to use federal agencies – including the US International Development Finance Corporation (IDFC) and the Export-Import Bank of the United States (Exim) – more to reduce the operational risk that has kept much private-sector investment away.
US global lending banks are given new life to battle an aggressive China
Exim’s programme provides loans, guarantees and financing insurance to foreign governments for infrastructure projects that US companies would need to start on terms competitive with China.
Also under the Trump administration, IDFC was given an expanded role with its lending budget more than doubling to US$60 billion, and a new authorisation to make equity investments to support US exports.
Coordinating with an array of US government bodies including the DFC, EXIM, the US Trade and Development Agency and the Millennium Challenge Corporation, “we have to make [efforts to transfer technology and build workforce capacity] more seamless”, Graves said.
“We have to make them more flexible, we have to be able to move more quickly. That’s one thing that some of our competitors have been able to do, like China,” he said. “They are able to galvanise tens of billions of dollars very, very quickly, and don’t require the types of approvals that we do.”
While Graves chided China’s approach to investment, Qin defended his government’s practices by asserting that BRI projects have given many African countries badly needed roads and other infrastructure.
“Over the past decade, China provided loans to help Africa with economic and social construction works everywhere, in every capacity. Hospitals, highways, airports, stadium,” Qin said. “In all of this, there’s no such trap. It’s not a plot. It is transparent.”