(4 minutes read)
· The Trump administration’s Africa focus policy underscores
the need for expanding US activities in the continent, particularly
enhancing its business interests, which are facing keen competition
from other economic powers, who are vying to expand their footprint
· The US believes that the future growth prospects of the
continent hinges on private sector growth. Public sector, it feels,
has failed to deliver and may not be able to create wealth and
employment commensurate with the requirement of the continent, which
will have close to 1.7 billion people by 2050
The Trump administration’s Africa focus policy launched underscores
the need for expanding US activities in the continent, particularly
enhancing its business interests in the continent, which is facing
keen competition from other economic powers, who are vying to expand
their footprint. The US wants the African countries to prefer them
over China, which in the recent times increased manifold its
operations. Not to be far behind, Russia is also harping on enhancing
its presence in the continent, though in segments like defense,
aviation and training. In recent times, Russian companies are showing
interests in laying oil pipes and infrastructure development like
ports and harbors.
Ambassador John Bolton, former US National Security Advisor unveiled
the US’s Africa primacy policy some months ago. After the
announcement, which has been referred to as historic from the US
perspective, U.S. Agency for International Development (USAID)
Administrator Ambassador Mark Green unveiled the US’s Private Sector
Engagement Policy to create an ecosystem for a private enterprise
driven growth model in Africa.
The US policy lays focus on all sectors of development, such as
energy, agriculture, humanitarian assistance, education and crisis and
conflict management. The US believes that the future growth prospects
of the continent hinges on private sector growth. Public sector, it
feels, has failed to deliver and may not be able to create wealth and
employment commensurate with the requirement of the continent, which
will have close to 1.7 billion people by 2050. That will be more than
that of China and India.
Though the US policy is mostly to counter China’s economic resurgence
in Africa, the continent should keep a list of options with them to
cherry pick such models and development alternatives that can tick its
growth parameters. Who will win or lose in the gambit to establish
their economic presence in Africa is not important from the host
continent’s interest. If investments come from all corners with
conditions that suit the individual home country’s interest and meet
development aspirations, they should be welcomed. At the same, what
should be driven home amongst 54 –country continent is that it can no
longer depend on aids and concessional loans from multilateral
organizations. They have to be repaid, sooner or later and add to the
debt burden.
As against this, FDI provides more stability even if the conditions
are loaded against the recipient country to a tolerable limit. FDI
can address the indebtedness, whereas loans, even if it is long term
and carry concessional rates, can cause hardships to the countries and
their progeny.
