There’s an emerging consensus in Washington, D.C. that a future Biden foreign policy towards Africa is probably going to look a lot like the policies enacted by the Obama administration. Two aspects of this new/old approach stand out from what the U.S. is currently doing on the continent:
- LESS FOCUS ON CHINA: While confronting China around the world will remain a top priority for the White House, it’s widely expected that the focus on Beijing will be reduced in places like Africa.
- RETURN TO VALUES-BASED DIPLOMACY: The U.S. will move to rejoin multilateral organizations as part of a broader effort to put democracy promotion, governance and transparency as key foreign policy pillars.
But with the election still unresolved at home, it’s not going to be easy for the incoming president to quickly implement these changes as he’ll be confronted with a number of other, more pressing challenges.
Aubrey Hruby, a senior fellow at the Atlantic Council’s Africa Center, and Landry Signé, a senior fellow at The Brookings Institution, are among Washington’s leading analysts who frequently advise high-level government officials. They join Eric & Cobus to share a few insights on what they’re hearing about what’s to come and how the U.S. should best re-position itself against China and other international actors in Africa.
Show Notes:
- African Business Magazine: Chinese influence is assured – how should Africa respond? by W. Gyude Moore
- Defense One: Cutting U.S. Defense Attachés from Embassies Abroad is a Bad Idea by Larry Hanauer
- Peterson Institute for International Economics: What US strategy gets wrong about China in Africa by Cullen Hendrix
About Aubrey Hruby and Landry Singé:
Aubrey Hruby is a nonresident senior fellow with the Africa Center. Hruby is also co-founder of Insider and the Africa Expert Network (AXN) and an active investor in African start-ups. In her role at Insider, Hruby works with global entrepreneurs to generate positive public relations and to connect them with investors, while at AXN, she has helped build Africa’s leading information brokerage and expert connection service. Hruby has consulted extensively in over twenty-five African markets and regularly advises senior policymakers and Fortune 500 companies on doing business in Africa. She is the former managing director of the Whitaker Group, an Africa-focused advisory firm that has helped facilitate well over $2 billion in capital flows to the continent. Prior to that, she was an International Trade Specialist at the Barnett Group LLC, where she worked with corporate clients to resolve trade problems in the Middle East and Africa.
Landry Signé is a senior fellow in the Global Economy and Development Program and the Africa Growth Initiative at the Brookings Institution. He was previously a David M. Rubenstein Fellow at Brookings. His career and research span the areas of global political economy, global governance and sustainable development, global business and emerging markets, strategic management and leadership, fragility, state capacity and policy implementation, the Fourth Industrial Revolution and Globalization 4.0, and the political economy of Africa and developing countries.
He is a full professor and founding co-director of the Globalization 4.0 and Fourth Industrial Revolution Initiative at the Thunderbird School of Global Management, distinguished fellow at Stanford University’s Center for African Studies, chairman of the Global Network for Africa’s Prosperity, and senior adviser to top global leaders (presidential, prime minister, and C-suite levels) in business, policy, and international affairs.
Transcript:
Intro: The China in Africa Podcast is brought to you in partnership with the Africa China Reporting Project at Wits University in Johannesburg. The ACRP promotes balanced, considered reporting on Africa-China relations through innovative training programs held throughout the year. More information at africachinareporting.co.za.
Eric Olander: Hello, and welcome to another edition of the China in Africa Podcast, a proud member of the Sinica Network from SupChina. I’m Eric Olander, and as always, I’m joined by Cobus van Staden, the senior China Africa researcher at the South African Institute of International Affairs in Johannesburg, South Africa. A very good afternoon to you, Cobus.
Cobus van Staden: Good afternoon.
Eric: Cobus, we’re going to pick up our discussion on U.S.-China-Africa relations, in part because of the fluidity of the situation in Washington right now. We just don’t really know what’s going to happen, and there’s been a lot of talk in Africa about the expectations and the hopes for an incoming Biden administration and what they’ll do. Last week, if you recall, we spoke with Joshua Eisenman, professor at University of Notre Dame, and he gave us a Chinese perspective on what this would be. And we have reached out, by the way, to four Chinese professors and analysts, and I just want to let everybody know that we have either been ignored or turned down. So, we’re probably not going to get the Chinese perspective on this, given the sensitivities of the U.S.-China relationship today. But today what we’re going to do is bring everybody to Washington and get the perspective from inside the Beltway.
Cobus, before we get to our discussion, though, about U.S.-China-Africa relations, I think it’s important that we update everybody on what’s been going on in Zambia. It’s been a dramatic past 72 hours. Over the weekend, Zambia became the first African country this year to default on a portion of its debt when it failed to pay a $42.5 million bond payment on $3 billion of Eurobond holdings. It officially went into default. Then on Monday, they started pointing fingers at each other. The Zambia External Bondholder Committee lashed out at the government in a statement and said, “The committee has no basis to conclude that the authorities intend to treat bondholders on an equitable basis with other commercial and non-concessional lenders.”
Basically, throwing down the gauntlet saying that the government has not provided the transparency or the access to Chinese loan data. The bondholder committee was also frustrated that the Zambian government did not enter into an IMF debt restructuring program, which by the way, the IMF now is in talks with Zambia. At the same time, the finance ministry in Lusaka, boy, they fired back, and the finance minister in a statement with Bloomberg, said, “If I pay the bondholders, the moment I pay them, the other creditors are going to put the dynamite under my legs and blow off my legs. I’m gone. I can’t walk anymore. If I don’t pay the bond holders, my legs will remain intact, but I’ll probably have a shot in the arm, and I’ll be bleeding in the arm, but I can still walk.” That is from the finance ministry. So, you can see it’s getting very acrimonious right now.
One other very quick point for us to talk about, there was also progress on the Chinese debt angle in Zambia Today. We got word that Zambia negotiated a debt deferral deal with the China Exim Bank for $110 million, where interest and principal will be deferred on loans that were to come due between May next year and the end of 2021. Now, $110 million is a good start, but when you think about the total Chinese loan portfolio in Zambia, at about $4 to $5 billion, it’s rather insignificant. So, Cobus, a lot going on in Zambia, really an important milestone this weekend with the default and the acrimonious relationship between bondholders, the Chinese, and the Zambian government. What’s your take on what’s happened?
Cobus: Well, in the first place, I hope it gives us a chance for more conversations about the role of bondholders and other kind of private creditors in the current African debt crisis. In the second place, I was laughing at this detail that apparently the Zambian government would offer them the full details of the Chinese loan portfolio if they would then sign a non-disclosure agreement, which they then rejected. I actually wonder like, what are they hiding? The fact of the secrecy, I think, makes everything a lot more to tantalizing. The final play, it’s kind of relating to that issue is… I argued in a newsletter intro to our subscribers last week that I think what is really needed is for the African Union to set up basically a database of all public loans to African governments. That they should be preemptive and go for full transparency and really make that the cornerstone of future debt dealings on the back of this current disaster.
Cobus: I don’t have much. I hope that that will actually happen, but I think that is what they should do.
Eric: Well, let’s get perspectives on what’s going on in Zambia, but more importantly also the situation with the U.S.-China-Africa relationship. And we’re thrilled to have back on the show two of the best experts out there on this. Aubrey Hruby’s a senior fellow at the Atlantic Council in Washington. She is a longtime friend of the show. A very good morning to you, Aubrey.
Aubrey Hruby: Thank you. It’s a pleasure to be here.
Eric: And we’re also thrilled to have back on the program, Landry Signé, who is a senior fellow in the Global Economy and Development Program, and the African Growth Initiative at the Brookings Institution. A very good morning, Landry.
Landry Signé: Good morning, and thank you very much for having me.
Eric: Welcome both of you. Thank you for getting up so early to join us. Aubrey, let’s start with you, and Landry, I’d like to get your take on this as well. Before we get into the geopolitics and the international relations portion of our discussion, can you give us your assessment of how you saw the events in Zambia unfold and what significance you attached to it?
Aubrey: Sure. I think it concerns a lot of people that this is not going to be an isolated event. That there are several other countries that are struggling with paying their loans, including Chad, and Congo, and Angola. And so I do think there are many who are afraid of kind of a domino effect of the Zambian default. But also can recognize that there were some specific factors to Zambia, the populist government, for example, that was elected that isn’t thinking as clearly perhaps on macroeconomic policy as others would be in terms of how do you address the difference between private debt holders and public debt holders. Their view that they needed to be treated equally is not usually the way that folks think about dealing with Eurobond creditors versus as bilateral, because the bilateral negotiating mechanisms are much stronger and easier than it is when you have a committee of bondholders.
So, overall, I think it’s a troubling development that the calls for transparency around Chinese lending will become even more intensified, and that you will find that other countries are watching closely.
Cobus: Shifting to the American election and the rise of the, or the coming Biden administration, I saw a lot of analysts discussing the tone, the change of tone from the Trump era to the Biden era. That, obviously, Trump was notorious for being very blunt, for calling Africa, shit hole countries. I wanted to ask both of you, do you foresee a change in substance in the way that the Biden administration will deal with Africa? Or are you mostly looking out for a change in tone and optics?
Aubrey: So, certainly there will be a change in tone and there will be a change in orientation. This administration, the Biden administration coming in has already said and indicated that they’ll be much more multilateral in their thinking and prefer engaging internationally with big organizations like the WTO, like WHO, and those organizations, as we know, are dominated by African countries in terms of number of votes. African countries have the largest number of votes in all of the international organizations, including the UN. And so you will see a multilateralism, which is different than the way the Trump administration came in with a bilateral approach. But there has been historically incredible continuity in Africa policy. It has been non-controversial, it has been bipartisan, and what I would consider big tent, meaning they bring a lot of different players under the same tent.
And even Trump kept Obama’s policies on Africa or his programs including the Young African Leaders programs and Power Africa. I think another difference the Biden administration will have is, who will be making the policies? There’s already a big effort with the transition team and the open calls for new people to join the administration for a more diverse group of people. So, I expect a lot more African diaspora to work in the administration, African-Americans to work in the administration. And I think many of them will choose, not all, but many of them will choose to work on Africa policy, and that will change the face-making Africa policy. And so, I think they’re going to have a change in tone, a change in the people guiding it, and then a multilateral orientation.
Eric: Landry, in your role at the Brookings Institution, you have an opportunity to come and interact with a lot of senior-level U.S. policy-makers. A lot of those people over the past four or five years have been very focused on China and China’s role in Africa. Do you think that in the new Biden administration that there will be the same focus on the Chinese? Or will they start to listen to what African stakeholders are saying and migrate U.S. policy more towards African needs and less towards what the Chinese are doing on the continent?
Landry: This is a very important question. I think that, broadly speaking, first, the implications of a Biden presidency in U.S.-Africa relation and in extension also in the competition between the United States and China in Africa. So, I think first and foremost, under the Biden presidency, the tone when engaging with African leaders or speaking about Africa, and I think as pointed out as well by Aubrey, will most likely be more diplomatic and respectful compared to what we have seen with the current president. So, a friendlier tone is really important to advance U.S. strategic interest. And when we speak about tone, we also speak about this narrative of competition between the U.S. and China in Africa. So, I think they will perhaps be less aggressive, if I can say it that way.
However, they will still refer to China. I don’t think that the China question will be out of the equation with a Biden administration. So, the second point also is that I will expect the Biden presidency to be much more involved in multilateralism, but not just from a global perspective, but also by supporting initiatives such as the African Continental Free Trade Area, or the African Union development agencies, among other factors. So, we’ll have to clearly monitor very closely the post AGOA configuration. A third point is related to the notions of value. I think that many of the policies that the Biden administration will engage will probably be aligned with what African public’s value such as democracy, the role of law among other… So, at least a Biden administration will be more vocal about those questions compared to the current administration, asking for more accountability from African government.
A fifth point is also that although, traditionally, people have perceive Republican as being more involved in trade investment, I think that a Biden presidency will probably offer platforms for U.S. and African investor to engage and therefore create mutual prosperity. So, align with what the Clinton-Bush-Obama administration did, and probably going further than what Trump has been doing as well, because in the Trump case, although the policy or the configuration was looking very attractive, on the other hand, the implementation and the space for engagement has been reduced. We want to highlight at this Prosper Africa, which has been a good development. And a final consideration, and I think is related to diaspora, the Biden administration will also be more likely to involve the diaspora at a much higher level than we have seen in the past.
And even during the campaign, he had the statement about the diaspora, the African diaspora, which is an original development compared to what have been done thus during other electoral campaigns. We should not forget, however, that ultimately a Biden presidency will first advance U.S. interests, whether around the world or in Africa, but I think those will probably be more aligned with African interest. So, we’ll have a higher convergence, although on some issues, we’ll also see the censors.
Cobus: Aubrey, over the last while, as I’ve been reading African reactions to the election, I’ve seen two themes. One is a general criticism of the securitization of U.S. engagement in Africa and the general kind of focus on anti-terrorism and peacekeeping and so on, over things like trade and development. But on the other hand, also alarm that the Trump administration is planning to withdraw troops, particularly from Somalia ahead of elections, and in the context of growing tensions in Ethiopia. How do you see this issue of securitization and the presence of U.S. military in Africa under Biden?
Aubrey: Again, I think the Biden administration would be willing to engage more. And so, while the Trump administration has been pulling back in so many ways, I heard even this morning that they’re speeding up the withdrawal of troops from Afghanistan, for example, even in this lame-duck period, and it’s been the same, they’ve been withdrawing the footprint and scaling it down in African markets. I think that has alarmed many African partners. And so, I do think the Biden administration will be more willing to engage on not only the security front, but also things around democratization and support for democratization on the continent.
Eric: And it’s also, let’s note out that The Wall Street Journal has been reporting, the Pentagon is considering downgrading the defense attaché role in a number of West African embassies. This has sparked a pretty passionate response on Capitol Hill and other places in Washington. Larry Hanauer, who’s formerly at RAND and formally a defense attaché in Senegal, he’s been a close follower of China-Africa relations — And he wrote on the Defense One blog today, “The presence of highly ranked attachés in such countries also helps ensures that the U.S. perspectives are heard above the din. When Russia, China, and Iran have flag-ranked attachés in capitals where the United States is represented by a field grade officer, our adversaries gain greater high level access to our strategic partners.”
So, the logic of downgrading the attachés and redeploying troops so that they can confront China in other parts of the world, when in fact, those troops and the attachés are there actually to also monitor China, what they’re doing in Africa, just seems rather ironic. Landry, you talk about a return to values-based foreign policy, and I’m kind of interested in that, in part because this is a very sharp contrast with the Chinese. The Chinese do not approach it with a values-based approach. So, this is going back to the way that the U.S. was, but given the fact that we are in the midst right now of a constitutional or democratic crisis in the United States, where the election is not being certified. We have just come out of an election where there has been active voter suppression of African-Americans and other minorities. And I’m just wondering, is the United States really in a position today to return to a value-based foreign policy when in fact that it’s got a significant number of difficulties at home?
And if you don’t represent those values at home, how do you then represent them in a place like Tanzania where there were clear problems with their election, and all President Magufuli has to do is turn around and say, “You’re criticizing me about my election, look at your election.” So, I’m wondering, is that really feasible in the next year or two to see a return to this kind of governance types of issues, when in fact, we are not really the house on the hill that we think we are?
Landry: This is another very important question. I think we should not forget that when we speak about democracy, we speak about different levels of accountability. The personal accountability, so the accountability from direct leader, for example. The peer accountability, the one which is related to the team of this given leader. For example, in the case of Trump, the personal accountability from Trump, his personal commitment to democracy or not, the one of its team as peer one. But we also have the vertical accountability represented by vote, the electoral process. And although the current incumbent has tried to discredit the vertical accountability or elections, on the other hand, a good characteristic of democracies is horizontal accountability, which include checks and balances. And in this specific context, I think that what we see in America is a clear illustration of a functioning democracy.
Because in a functioning democracy, a functioning democracy could be under stress. That’s why we speak about the quality of democracies, not either you have it or you don’t. You have different levels, and if one of the mechanism doesn’t work, the ability of the other mechanism of accountability should work. And in this specific case, I think that in January, and based on the evidence provided thus far, the United States would see a new president. And I am a little bit discomforted by the comparison, because if this was an authoritarian country, we will not be even discussing now about who is the winner. The incumbent who have simply declared himself or herself as a winner of the election and remaining power and jail the opponent.
But in the case of the United States, it is clear that if a candidate doesn’t have a high standard of personal accountability, we still have vertical accountability, which is the electoral process, which overall went well. And I think the elections are meaningful, so they were free, fair, but also credible and meaningful, which mean that independently of the problem which could have evolved, they may not be of nature of putting into question the final outcome, of course, less with the final certification in December to be certain about the final outcome. But the evidence thus far is demonstrating that despite personal preference of the incumbent, it is likely to have a new… it is almost certain to have a new president in January.
And using this argument, the signal sent to African emerging democracies that the quality of leadership matter, but if the leader fail, the quality of institutions is also extremely important because they will allow democracies to survive when facing challenges. And ultimately the quality of democracy is also important, including in established democracies. So, it’s not the perception that because a country has been democratic for centuries, that they should not continue to improve their democratic development. Democracy is a constant struggle. Citizens have to remain involved, which bring to the final level of accountability, the diagonal accountability, which is the role of citizen engagement and the media helping to reinforce the other levels of accountability.
Cobus: Aubrey, to which extent do you, when you look at, or when you project ahead about what kind of approach the Biden administration will have to Africa, to which extent do you foresee it to be a continuation of the Obama approach? And to which extent do you see differences? I mean, what do you think the Obama administration did wrong in Africa that the Biden administration can improve on?
Aubrey: Well, I do think there’s a lot of things about this potential Biden administration that will be a continuation of an Obama approach. And that’s just not on Africa policy, but on a lot of other areas of economic policy in the U.S. and social agenda. And even some of the same people will come back. I think that the thing that the Trump administration did well, that maybe Obama didn’t quite do well, which was, is really institutionalize a commercial approach towards Africa. Und the Trump administration, we did get the Development Finance Corporation, and that was a result of the BUILD act, and that gave firepower to commercial support for U.S. companies operating in African markets. Remember, during the Obama administration, U.S. Exim Bank was basically paralyzed and couldn’t do deals, and they were unable to resurrect it.
And it really took the kind of, I guess, fear of China to bring back Exim Bank and push forth the BUILD Act. So, the commercial policy really came to bear in the Trump administration. And I don’t think we’ve actually gotten to see the full value of it yet, because remember, the DFC just became operational two, three months before COVID lockdown. And so we haven’t really seen the full value of those pieces. But I did want to comment on your last point about democracy and pushing, and can you do that? Are there a high ground to stand on? My hope is that this administration takes a position of humility and really has an awareness of that and doesn’t have a finger-wagging approach.
It reminds me of the Henry Kissinger quote about the kind of dual myth of American foreign policy that on the left, that many see the US as the ultimate arbiter of domestic evolutions all over the world. And on the right, many see the U.S. as… that the world’s ills can be basically cured by American hegemony. And I think both of those myths or extreme approaches are wrong, and that we need to essentially approach the situation in African markets as recognizing the changing realities on the ground that African countries have more choice than they ever have had before in terms of global partners. And in that choice, we need to think of them with respect and dignity in exercising their freedom of choice. And that to make a choice towards the U.S., we need to make clear reasons to do that. And those reasons can be U.S. soft power, people-to-people ties. Those reasons can be commercial aligned interest. Those reasons can be global collaboration on global issues. So, I think we need to kind of tamp down the typical American arrogance that can result in foreign policy and find a way forward that is one of tempered humility.
Eric: Well, that’s a good segue into my closing question for you. And it relates to an essay that was written today by our good friend, Gyude Moore, who is the senior policy fellow at the Center for Global Development, also in Washington with you. And he published a column in African Business Magazine, very, very provocative, where he basically says, we are seeing about to embark on the coming decade of Chinese dominance on the continent. And he looks at Europe and the U.S., and about the U.S., and I’m quoting here, “Beyond stern rhetoric in speeches, the U.S. will not offer an alternative in Africa. The continent has never ranked high for U.S. foreign policy, and that is not about to change.” Okay. Then in Europe, he says, “Europe will not compete with China in Africa since Europe has never demonstrated real interest in African prosperity.”
“In 2018, the then EU president, Jean-Claude Juncker, described Europe’s relationship with Africa as “beyond inadequate and humiliatingly so.” Then he writes about China, he says, “As the world divides, Beijing will turn to the region in which its power and influence are growing, and where it faces no pure competitor — Africa.” With that in mind, I’d like to get your sense and your reflection on Gyude’s statements there. It’s a big-picture kind of look, but I think that’s a great way for us to wrap up our discussion. Landry, let’s start with you about, do you think and agree with Gyude that we’re about to embark on a coming decade of Chinese dominance on the continent, as Gyude says?
Landry: The first point that I want to highlight is that Africa will be ruled by African. So, it’s extremely important not to forget the African agencies in this process. I want us to be very prudent, and even when allying, whether with China, the U.S., Europe, or other players, we still have African agencies. African leaders, at least most African leaders make choices. They have a room for maneuver, even when it doesn’t look like it. I think the Zambian case also show that an African leader can respect, or not, their commitments with partners. This is the first point. The second point I also want to highlight and connect it with the U.S. foreign policy or foreign policies in general, [inaudible 0:29:46], for example, identify four drivers. And I think this is also connected to a point that Aubrey made earlier. So, power, peace, principle, prosperity. So, they could be summarized as part of the four key drivers of foreign policies in general, or the U.S. one in particular of foreign policy of great powers in particular. It is rare to have those four drivers align. We’ll usually have a convergence, a couple of them, sometime they may be a power and principle, other the time, prosperity and principle. And that is when, in an ideal scenario, all the four drivers should be aligned for a given front policy. But usually we just have a convergence of two to three of those drivers, and in a case of the censors, so when there’s really no alignment, that is also cases where either policy will not be decided or they may not be highly effective.
I want to bring those two factors and connect them with some of the arguments made by our friends to say that the countries which will be more present on the continent, foreign partners who will be more present on the continent are the one for which those four piece will be the best aligned. For now, it is true that China, whether we speak about power, peace, principle of prosperity, they are quite aligned. You have a convergence, a very good alignment, which explain why China’s presence in Africa has grown at a faster speed than most of the other partners, or at least compared to the established partners. But having said that, I think we should, when speaking about Africa, when speaking about African countries, we should not forget that they have agencies.
And we should also take into consideration the fact that other players are evolving, not only China, we have other player, even if they are not as prominent such as India, such as countries in the Middle East. In Latin America, we have Brazil, for example. And we also have a renewed interest of established partner. And I think, Eric, you mentioned before also the U.S. and especially when adopting the Africa strategy. We saw the reaction of Bolton comparing China, Russia to countries which are having a disruptive impact on the continent. My short answer to that is Africa will be ruled by African, and Africans will be welcoming most of the partners who respect their priorities.
And in a piece that we co-published with my friends from Afrobarometer, some of those priorities that African want to advance, or at least to solve, challenges that they want to solve include unemployment, health, infrastructure, education, water supply, crime, and security, and finally poverty, and their situation. Those are some of the top priorities that African want to address. And I think no matter which partner will be involved in providing tangible solutions to those priorities, African citizen will welcome them. And an African government will also be likely to collaborate with them. And having said that, we also have accountable governance dimension, the state effectiveness dimension with a majority of African interested in advancing democracy. Although African leaders may or not have the same position, it is clear that this provide an opportunities for players, especially Western players to act in a way which may be more aligned with what the African publics want, which may or not be aligned with what some African leaders want, depending as if those countries are Democratic or not.
Eric: Landry, we know that you have to go, and you have a very busy schedule. And we’re very, very grateful that you took time out of your schedule to join us. Just everybody, Landry Signé is the senior fellow in the Global Economy and Development Program, and the African Growth Initiative at the Brookings Institution. We’re going to say goodbye to Landry, but keep our discussion going with Aubrey. But before we go, Landry, can you just give us a quick shout-out as to what your Twitter handle is if people want to follow what you’re reading and writing these days?
Landry: Oh, thank you very much. It’s just Landry Signé, my Twitter handle.
Eric: Great. Well, we’ll put a link to Landry’s Twitter in the show notes and also some links to some of the recent writing that he’s done for the Brookings Institution. Landry, thank you so much for your time today.
Landry: Thank you very much, Eric, and have a marvelous day.
Eric: Aubrey, we’re going to continue the conversation with you. Let’s go ahead and get your feedback on Gyude’s article. What did you think of the points that he was making and whether or not we are embarking in fact on a coming decade of Chinese dominance on the continent?
Aubrey: Well, what I thought was very interesting about the piece is that he mentions that China will turn to African markets because doors are closing to China in other regions. And so, it’s basically an elevation of African countries and opportunities by default, in many ways, especially with the kind of Western push around, anti-Huawei and anti-ZTE and the telecom equipment and the world being divided into kind of tech standard zones, and the U.S. and Europe taking part in that effort. And so, I thought that was a very interesting point that with increasing tensions between China and India, that Africa will be, by default, an area that China looks more to. Overall, I think the competition for particular access to African strategic resources when it comes to minerals will intensify as many countries in the world try to reshape their supply chains.
The COVID crisis taught many companies the problem with being over-dependent on China as a manufacturing and processing market. And so, many countries are looking to reshape their supply chains. France has mentioned it, UK, the Japanese have a $2 billion fund that is to bring supply chains back to Japan and out of China. And I think the U.S. will look at that too. There are bills going through Congress right now about strategic minerals. And the USDFC has invested in a company recently, invested $25 million in equity in a company that is doing strategic minerals for supply chains like lithium batteries all over the world, including in Africa. And so, I think you’ll see a lot more activity. And then, again, as I said earlier, that African countries will have their choice of partners.
Cobus: Aubrey, how do you see trade developing during the Biden? We saw the negotiation of a bilateral deal with Kenya. And obviously, at the same time, the Continental Free Trade Agreement is slowly moving ahead. How do you see the U.S. engaging with the Free Trade Area? And then also, what is the future of these kind of bilateral trade deals?
Aubrey: I mean, first and foremost, we have to return trade to a pre-COVID level. Trade has dramatically decreased during this period, according to WTO or WEF forecasts, I’ve seen anything between trade being down by 15% to 25% in 2020. And that’s just the first half, so we haven’t seen the second-half numbers. Additionally, global FDI is down about 50% in the first half of this year, and 30% into African markets down according to UNCTAD. So, I think, first, on the trade front, a Biden administration, as with many countries in the world, will have to figure out how to rebound trade to pre-COVID levels. And I do think Gyude has recently written another piece about the African Continental Free Trade Agreement in Foreign Policy Magazine, along with the former Minister of Trade of Botswana, and they talked about the importance of engaging with the African Continental Free Trade Agreement and the secretariat.
I do think the Biden administration will engage with AfCFTA. And on the Kenyan Free Trade Agreement, I’m not sure how they’re going to square this circle, but I don’t think they’re going to throw out the progress that’s been made with the Kenyans over the past year on a potential FTA. And we have to remember that even during the Biden administration, before Trump even was a potential as a president, there was discussions of how to move beyond AGOA, and what would be the kind of replacement approach to AGOA? And so I don’t necessarily think this administration’s going to automatically revert to an AGOA approach. I don’t think they’re automatically going to reject the FTA process with Kenya. So, I think it’s going to be a bit of a mixed bag. But I do think they will engage more readily with the African Continental Free Trade Agreement than the Trump administration did.
Eric: I’d like to get your take on something because I’ve been accused of being too negative, too bearish on Africa. And because the statistics that I look at are grim and dire. The unemployment rates in South Africa now have crossed 30%. We did some reporting today on the state-owned enterprises in Kenya, Kenya Airways, Kenya Railways Corporation, and also Kenya Power that are all increasingly insolvent. We have the Zambia debt crisis. I mean, we can look across the continent and look at the economic situation, and it’s becoming increasingly dire. Not to mention an Ethiopia where conflict has now broken out. And one has to think about whether or not the United States returning to its Obama policies or values-based policies is the right mix for a continent that at least economically speaking is on fire.
And the Chinese, say what you will about all the other issues, they’re coming with an economic message. They’re talking about debt and finance, which is something that obviously they have a lot of influence on, but there’s also quite a bit of trade that’s still happening and quite a bit of investment that’s going on. China-Africa trade in the first six months of the year was only down 18%. Now that’s in that zone, you said, 15 to 25%. So, it fits what UNCTAD is saying, but nonetheless, we’re going to do somewhere around $180, $190 billion of trade between China and Africa this year, which, all things being equal, is quite good. So, the Chinese message focused on economics. To me, seems far more relevant for the current moment that we’re in, given what’s happening in Africa today. And I don’t hear that coming out of the United States. And what is coming out of the United States like the DFC is small. I mean the DFC, with all the wonderful things it’s doing, it’s talking about deals in the tens of millions and the single millions.
It’s not talking about deals in the billions. Today, the news out of Uganda was the fact that Uganda and the China Exim Bank are negotiating over $2 billion loan for the new standard gauge railway. Whether that comes through or not is… I don’t know. But that shows you the discrepancy in scale that we’re talking about here. I’d like to get your take on whether or not the United States is really coming to the table to be able to talk to African stakeholders about the current moment that they’re in.
Aubrey: Well, Eric, I want to address several of your points. One, the first one you made was about the kind of dire economic challenge that is facing a lot of countries on the continent. And I agree with that. While the health impact of COVID has not been as terrible as many had predicted prior to… or at the beginning of COVID, the economic impact has been dramatic. Even the Nigerian state statistics show that they expect a contraction of somewhere between 3% and 8% this year with millions slipping into abject poverty. And you’re going to see that across many markets as many people who made a lot of gains economically over the last 10 years slide backwards for the first time in a generation. And so, that really is a troubling thing.
And then, as I said, the investment flows are down, and we’re going to need more investment in order to build out of that. I do think that there is, at least within this Trump administration, and hopefully continued in the Biden administration, a greater focus on the commercial piece. In fact, I was speaking this morning on a Concordia Africa Summit, and the acting administrator for USAID announced a new program that Prosper Africa is going to put forth, which is a $500 billion program to facilitate trade and investment into African markets. And that’s not just the investment amount, that’s the amount of money that they look to aim to facilitate what they hope to be about 5 billion in investment. Now, the reason why Chinese financing numbers can be so large is that they’re financing large infrastructure projects.
And we’ve talked about this in the past. U.S. entities, U.S. companies are not really doing those type of large infrastructure projects that we did once upon a time many years ago. So, we’re a service-based economy, and that’s not necessarily what we bring to the table. But if you do look at like what Google and Facebook are doing in terms of building digital infrastructure when it comes to undersea cables, when you look at what Netflix and others are doing in terms of content, I do think there’s a role the U.S. is playing. And it might not be in the tangible transport infrastructure, which surely Africa needs. It might be in areas that are more intangible and the service sector. I don’t think the U.S. is absent in this equation by any means. And the last thing I’ll say is very positive, which is we have seen increasing resilience in African markets, particularly those that are quite diversified.
So, I’m thinking here, like the Kenya’s. And if you look back, even in Nigeria, if you look back to the, remember the commodity price dip in 2015, 2016, when you saw a couple of recessions, you saw recession in South Africa, you saw a recession in Nigeria? The bounce back was much faster. It wasn’t that the continent was losing decades as what happened in the ’80s. It was a couple years, but the bounce back was quite rapid. So, I’m hopeful that we’ll see that same thing, especially from the more diversified economies.
Cobus: Aubrey, obviously you speak with African policymakers frequently, what kind of advice would you give them to best position Africa to take advantage of coming shifts in the U.S.?
Aubrey: Listen, the same advice I give to them thinking about their international partners generally, which is look at them as a portfolio of partners, figure out which partners do which thing best, and filter your opportunities and your priorities to match what that partner can do and has the appetite to do. All too often I talk to African leaders, and they will pitch projects in the U.S. where I’m saying that this is not a good match for what American companies bring to the table. And it’s better to kind of filter those priorities based on what different countries do well. So, if you have mining opportunities, it’s probably not the best to bring your mining opportunities to the U.S. We’re not a big mining player. Whereas like the Canadians and the Australians are very, very competitive and big in mining. So, if you’re looking for mining investment, doing a roadshow for mining in the U.S. is not the best use of your resources. But looking at, for example, agribusiness, that’s something that the U.S. is very competitive in, and especially ag technologies.
Yeah, go to Chicago, talk to companies there and try to kind of attract that specific investment. So, it’s really about thinking of partners as a portfolio and picking among them based on what they can do best, rather than pitching the same list of projects to each partner.
Eric: Aubrey Hruby is a non-resident senior fellow with the Africa Center at the Atlantic Council, and she’s also co-founder of the Africa Experts Network, author of The Next Africa, which you can buy on Amazon. And she’s also an active investor in the African startup scene. Very busy. And we’re very grateful that you took the time today also to join us. Just like we asked Landry, what is your Twitter handle so that people can follow what you’re reading and writing these days, and if they want to get in touch with you?
Aubrey: Sure. They can find me at @AubreyHruby, A-U-B-R-E-Y H-R-U-B-Y on Twitter. Aubrey.
Eric: Aubrey Hruby, thank you so much for taking the time this morning to join us.
Aubrey: Thank you. It’s my pleasure.
Eric: Cobus, it’s so refreshing to get the perspective from inside Washington because the nuance that these two bring to the discussion is vastly different than what we hear elsewhere coming out of, say, the State Department, the White House, and other, the institutions, if you will. Two points here that in some ways may contradict one another. Aubrey’s point that don’t come to the United States for the same competitive types of jobs that the Chinese are doing, like mining or infrastructure, is very interesting. And that contrasts a little bit with what Landry was talking about in terms of a return to a value-based foreign policy. I think that the United States has an uphill battle rebuilding its credibility on values-based foreign policy, and in part because, and this is an issue that Gyude brought up again in his article that we referenced, coming back to things like LGBT issues, which, while are very popular in the United States, particularly with Democratic constituencies, are not at all popular in African countries.
So, it depends on what values we’re talking about here. And if we’re talking about democracy, again, I really think that the United States is a hard sell here. This is not really a good time for democracy when in fact the United States is struggling with a lot of democratic norms itself. So, writing the democratic norms issue is going to be a very important priority. And when we think about what Africa really needs right now, a return to a strong United States as an impartial mediator, say, in issues like the Grand Ethiopian Renaissance Dam, also in some of the tensions we’re seeing in Ethiopia right now as well, some of the border conflicts that have been happening in West Africa and East Africa, that could be a very important role.
And that would be a resumption of America’s traditional role, playing that leadership kind of position, which we desperately need right now. But in the great power competition, do you think that the United States, given where we are today, will be able to compete with the Chinese in terms of relevance?
Cobus: It’s a really difficult question. I think one of the issues is where the US’s relevance lies, right? And there, I tend to think that frequently a lot of American power lies in its larger example in the world. For example, putting pressure on individual African countries to change LGBT policy, I, as an LGBT person, I support that, and I also think that anti-LGBT sentiments in Africa don’t get enough condemnation as they should. But at the same time, I would also say that, in a lot of ways, the way that the U.S. does things in its own backyard counts for a lot. For example, the Obama administration’s decision to… The time when they projected the rainbow flag, if we stay with LGBT issues for the moment, the way that they projected the rainbow flag onto the White House, that was really a powerful gesture. And it’s that kind of powerful gesture that I think has weight in Africa.
For example, rejoining the Paris Climate Accord would be a massive step forward for Africa, even though Africa isn’t directly involved in that decision. So, the U.S. resuming some of its moral authority in the world, I think would be very useful. At the same time, I think one of the problems, and this I think Gyude, we keep referencing Gyude’s article, and I think this was particularly powerful, is the point that he made that Europe, and I think this is somewhat true for the U.S. as well, is indifferent to African prosperity. I found that phrase very powerful. And it’s something that I really think underlies a lot of where the West loses its influence in Africa.
Because in the end, the West has no experience of systemic underdevelopment the way that Africa does, and the way that China has had for a long time. That is a link between Africa and China that the West finds difficult to get into because there’s a lapse of imagination there. And for me, again, if the U.S. looks at some of these lapses in its own backyard, I’m thinking of, for example, the water situation in Flint, Michigan, that is an instance of systemic underdevelopment within the U.S. And kind of addressing those and addressing those in a way that projects a universal, a global example, I think would be one really crucial way of moving forward. What do you think?
Eric: Well, in the context of the Chinese, I think there’s also a big opportunity here, in part because Chinese popularity and perceptions of Chinese influence on the continent are going down according to some of the data that we’re starting to see out of Afrobarometer. All year, Afrobarometer has been releasing charts from their latest survey that they finished in 2019 and into 2020. And consider this, they just published a story today about perceptions of China’s influence in Malawi. And in 2014, 59% of Malawians surveyed said that China’s influence in economic activities was either some or a lot. Then in 2019, that number dropped to 36%. That is a precipitous drop. Then also, the number of people who said they don’t know about the influence of China’s economic activities in Malawi or refused to answer, interestingly jumped from 19% to 41%.
So, that’s a negative indicator as well. And I think we’re seeing that data point across the continent that COVID-19 has had a negative impact on Chinese perception. Also, the debt issue has had negative impacts as well. So, if the United States or Europe or other players wanted to make a move, this might be the time, in part because a lot of perceptions of the Chinese are influx and have been going down. And also, let’s not forget about what happened in April with the Guangzhou incident as well. That did not help Chinese public perception on the continent. So, I think that if the United States can get a strategy that is engaging, that is relevant, that is focused on jobs and practical issues, and I think that if they hold back a little bit on some of the more controversial civil political rights things, which borders into some of the areas of lecturing that have shaped a lot of U.S. and European foreign policy in Africa for decades.
And you have mentioned on a number of occasions how fed up people are across the continent of U.S. and European lecturing about these things. And that’s one of the things that people like about China is they don’t actually go on about these conditionalities on aid and also on governance issues. Again, good or bad, that’s not the point that I’m trying to make here, but it is just the perceptions issues. What do you think about this moment in time that we’re having right now in terms of declining Chinese public opinion?
Cobus: I’ve been thinking a lot about how to interpret that. One of the ways, I guess, one could look at it is that in a way China’s maybe becoming more familiar as a presence in Africa. And that with that comes a kind of a necessary, kind of normalization in a way of also its approval ratings. That may be one point. I think the issue of the debt and also the perception that China is… A perception that’s fed by all of the secrecy around the debt, the issue that China is a massively powerful player on the continent, but one that refuses to disclose exactly which game it’s playing, I think that is damaging for China. And it’ll be interesting to see how the fallout around the debt and Zambia particularly is going to impact that. However, I think at the same time, and this is something that we discuss frequently, but the Chinese development story in Africa is a unique asset.
Exactly the issue of no one used to have access to water 40 years ago in China, now everyone has access to water — That kind of jump from, or a narrative where one can chart the development of common broad-based prosperity in China, that story is really, really valuable, I think, to Africans. And it’ll go a long way to lose its power. I think any kind of other partner, including the U.S., that’s where they need to focus. They need to focus, as you mentioned, on jobs, for example, on really kind of nitty-gritty everyday development issues. I think those will do a lot to help to lift that relationship.
Eric: Well, that is some good advice, and I hope that some folks in the incoming administration at the State Department, the White House, the National Security Council, and the Pentagon are listening to your sage words. We’re going to leave the conversation there. We’ve packed a lot in today. But the issues that we’ve talked about in this particular show about Zambia, about public perceptions, all of that came out of actually just the past two days of our newsletter. And that’s the kind of thing that we’re putting into our newsletter. We’re really excited about the fact that the community of readers is growing. And we would love for you, our podcast audience who’s gotten all the way to the end of the show, that means you are among the most loyal to join us and check it out. Go to chinaafricaproject.com/subscribe. Sign up. It’s free to sign up. You’ll get two weeks for free. See if you like it. If you don’t like it, you can cancel any time. We’ll give you your money back, but we think you will like it, and we’d love to have you part of our reader community. Once again, that’s chinaafricaproject.com/subscribe. So, that’ll do it for this edition of the show. Cobus and I will be back again next week with another program. For Cobus van Staden in Johannesburg, I’m Eric Olander — thank you so much for listening.
Outro: The discussion continues online. Head over to facebook.com/chinaafricaproject to share your thoughts on today’s show. The guys are also on Twitter where you can find Cobus @stadenesque or Eric @eolander. And be sure to sign up for the weekly China in Africa email newsletter by going to www.chinaafricaproject.com.
