The top energy diplomat for the United States, Francis Fannon, issued a clear warning to African governments to avoid taking oil and gas investments from “opaque forces” that could lead to erosion of their countries’ sovereignty through debt-dependency.
He didn’t mention China by name in his speech at the Africa Oil Week (AOW) conference that’s taking place in Cape Town, but he didn’t really have to given that he resurfaced well-established Washington talking points on the risks posed to African governments who take on too much Chinese debt.
Over the past few months, it appeared that the U.S. had toned down warnings about “Chinese debt traps,” especially since a number of U.S. scholars and analysts had debunked the notion, but now that messaging seems to be ramping back up again.
Highlights from Assistant Secretary Francis Fannon’s AOW Speech
- TRANSPARENCY: “All countries face a choice on their investment path. Transparency and best practices or do they fall under the spell of opaque forces that provide short-term money and long-term debt and eventually dependency.”
- SOVEREIGNTY: “Be careful, fast and loose money often comes with high-interest rates, unclear terms and lack of respect for the domestic population and the environment. Today’s quick deal can, over time, turn into a debt trap that slowly erodes a proud nation’s sovereignty.”
- WHY CHOOSE THE U.S.? “The question before us is how do we ensure that the wealth under the ground transforms into prosperity for people above the ground. When a country chooses to do business with a U.S. company they know that they are securing the best technology, the best health safety, and environmental performance.”
Fannon and his colleagues in the State Department and Pentagon have been persistent with their critique of Chinese lending and investment practices in Africa over the past several years, but there’s little indication that their warnings are gaining any traction on the continent, particularly in the energy sector.
For example, Equatorial Guinea’s oil minister, Gabriel Obiang Lima, expressed a point of view last fall upon returning from Beijing that is likely shared by many of his African ministerial counterparts: “We are open to all offers but they [the Chinese oil majors] are offering the best prices, the most money. It’s that simple.”
