America’s view of what is happening in Africa is clouded by the distance between the U.S. and African locus of loyalties. The America-style interpretation of African needs and priorities, as expressed through Prosper Africa and its signatory “coordinating” agency, the U.S. International Development Finance Corporation (DFC), gives short shrift to the rationality and values underlying the economic and political choices of Africans.
Follow America (not China)
On October 16, 2020, the Atlantic Council co-hosted the online Investing in Africa’s Future Conference.
It was obviously part of the U.S. government’s efforts to promote U.S. trade and investment in African markets.
The conference convened African heads of states and public and private sector leaders. But it was clear from the outset that it was an event to advocate for and aggressively promote the America as the preferred partner to strengthen Africa’s “economic growth, technology, energy independence, and infrastructure” (DFC Press Release). This is part of the Trump administration’s head-to-head competition with what USAID Deputy Administrator, Bonnie Glick, touting the official Trump administration line, arrogantly referred to as “malign actors”, i.e. China.
A transactional approach to Africa’s self-reliance
Development aid and financing is, of course, an integral part of any country’s foreign policy toolbox. But the American U.S. government representatives speaking at the conference made sure to emphasize, directly or indirectly, that financing African development is above all a tool for competing against China for the benefit of America First. It aims to help the U.S. create the road to African self-reliance through private sector investment versus China’s road to dependency through the debt trap. After all, countering Chinese influence is the goal of the administration’s “New” Africa Strategy (2018), as well as America’s “New” National Security Strategy (2017).
The problem is that America’s road for African self-reliance is mined with a transactional approach that combines grants and loans for “deals” that enable co-creation of wealth for America first. The better the deal, the more benefits accrue first to U.S. companies (exports to Africa and related job creation, reduction of barriers to trade and investment and to project risk in Africa, supply chain financing) and secondarily to African companies.
As the CEO of DFC, Adam Boehler, clearly stated: the DFC is a bank and must go where the private sector wants and is willing to go. So the objective is to “reshore” Africa (Boehler’s word), that is, bring it back into the American fold by moving in aggressively to ensure Africa’s continental 1.2 billion consumer market is private (versus planned), free and competitive.
What’s so different about Prosper Africa and DFC?
The main problem with foreign aid for the past 60 years is that it ignored the needs and priorities of Africa and Africans, superimposing those of donor nations in their quest to establish and maintain a foothold to exploit the continent’s subsoil resources. Indeed, aid efforts in Africa have been blatantly ineffective and inefficient, marked by patronizing spoon feeding of “assistance” here and there while pushing export goods and services onto and into Africa and at the same time syphoning off its natural resources through their export to wealth-guzzling countries.
The question that arises is this: beyond the DFC-led “whole of government” effort to coordinate and manage U.S. foreign aid, which is welcome and very much needed, in order to inves in private market development with transparency through mutual partnerships that will enhance U.S. and African competitiveness and strengthen its sovereignty (versus what Boehler referred to as “China’s economic colonialism”), how much does Africa really matter to the U.S.? The message that came through, loud and clear, from the DFC, USAID, EXIM, and USTDA representatives at the conference, is the same one that the continent has evoked in America for over 5 decades: free up those economies!
This is not to say that U.S. foreign aid, and the Bretton Woods institutions the U.S. leads from behind, hasn’t helped African countries build material and social welfare infrastructure. But it has also distorted economic management and the development of African self-reliance by, first, ignoring the critical problems in those functional sectors that affect the lives of the majority of Africans and, second, by dragging U.S. security concerns (today expanded to include human, food, water, financial, energy, technology, infrastructure, investment – in other words, life, liberty and wealth) into everything.
Prosper Africa is well-dressed in development
Prosper Africa, with DFC as the “integrator”, is well-dressed and has developed a very gushy and suave development aid discourse. But it hasn’t changed the tune. DFC’s New Roadmap for Impact
may prioritize low-income countries, tout a diversified investment focus and emphasize women’s empowerment, but the truth in practice is that financing and investment has been overridingly focused on the energy sector, with billions of dollars going to oil and gas, big millions into power, and small millions into everything else - like health, agriculture, education, and financial inclusion. Needless to say, it is this everything else that makes for independent and sustainable development, resilience and self-reliance.
A perfunctory review of active DFC projects in sub-Saharan Africa in 2020 provides a partial yet indicative picture showing that investment in Energy (gas, electrification, renewables, nuclear) totals $316,762,231, $15 million more than the $301,455,000 combined investment for the other four DFC areas of focus: financial inclusion ($116,055,000), health ($4,350,000), technology & infrastructure ($105,700,000), agriculture & food security ($75,350,000). To these amounts must be added: other DFC approved transactions, such as a $1.2 million grant for gas infrastructure in Senegal and a $1.7 billion in Mozambique for energy infrastructure, including an onshore natural gas liquefaction plant; the grants and financing from USAID, USTDA, MCC, and EXIM deals, all of which evidence tendency towards investment in the energy sector and supporting market infrastructure; and in other U.S. government agency grants and investments not included in the direct DFC fold.
How does the sectoral imbalance in financing and investment help drive inclusive growth and benefit underserved populations? Having hundreds of small projects, a majority highlighting women, in non-exploitative investments is certainly important; women are the drivers of building back better. Even though women are beneficiaries of very small project financing, they should be valued not because they're receiving help but for their inclusive, expansive and multiplier impact. They should also be presented and promoted as valid partners for private investment, not as a marketing tool to misleadingly dress the American aid for trade and investment window.
The sheer number of small projects makes for a nice window dressing and creates a mirage of “effective aid”. But it can’t drown out the weight of the drive for big investments in oil and gas and in the energy and hard infrastructure required to facilitate operations and transport and export out of Africa. What makes this so different from past European colonialism or so-called Chinese economic colonialism?
It’s time to see Africa and listen deeply
As H.E. Macky Sall, President of Senegal, rightly said at the conference: it’s essential to listen deeply to Africa. H.E. Filipe Nyusi, President of Mozambique added to this by emphasizing, at the beginning of his address, that it is important to ensure the energy sector can transform, not dominate, Africa. This requires diversifying the economy and therefore investments. After all, you can’t eat oil or gas.
Africa has shown great resilience in the face of the COVID19 pandemic. But, as Mr. Ouhoumoudou Mahamadou, Chief of Staff for the President of Niger, H.E. Mahamadou Issoufou, pointed out: it’s important to understand and support the 2063 African Union Vision, which aims for the development of all sectors in an integrated fashion to enable faster growth. In his keynote speech, H.E. Idriss Déby, President of Chad, made a call to action: it’s time to invest in all of Africa’s resources – agriculture, livestock, fisheries, and people, not just the subsoil. And it has to be done by respecting African institutions.
It’s time for America to demonstrate real leadership in Africa
Let’s be honest. Aid has never really been a matter of equitable sharing. It continues being apportioned according to strategic and political priorities. But Africa is changing, and fast.
African self-sufficiency through reliance on U.S. trade and investment just won’t work for Africans; it’s not enough. As H.E. Macky Sall said, China is not a threat; it provides much-needed long-term financing with low-interest rates. Africans cannot develop for Africans first by slavishly imitating their American free-market mentors or by obediently following U.S. directions.
So, if America’s true goal is to help Africa build back better after COVID19, it must start listening deeply, instead of hosting conversations about how to continue being a U.S. friend and ally by choosing America over China. DFC should ensure its development banking efforts don’t turn into a tool for New Age colonialism in service of Great Power politics.
It’s not enough to say that policy trumps politics and that development aid and financing answer to American priorities. You have to walk the talk and demonstrate leadership in a way that matters to Africa too, by edifying the continent for itself and its people, not just for the market opportunities and potential profits it opens up for America.
It’s time America graduated from imperialistic hubris and exploitative myopia to taking initiatives that are sincerely mutually positive and edifying. The U.S. must not only say the aspirational. It must think the thinkable and then act to ensure Africa can assert and defend its own personality in international affairs, even if some of its goals differ from America’s.
Africa must champion Africa for Africans first, by being open to everyone, to the world. The U.S. will gain exponentially from that. Paraphrasing late former president of Senegal, Abdou Diouf: At stake is America’s credibility before the African people, before the entire world, indeed before history.