U.S. Awakens to Competition from China in the African Market

U.S. Secretary of State Hillary Clinton touched down in Angola Sunday, the third leg of her African tour, which many analysts view as an attempt by the U.S. to play catch-up to China?s growing trade relations with?Africa. News data suggest that China has overtaken the U.S. as Africa?s top trading partner. Clinton has already been though Kenya and South Africa.

Commercial relations between the U.S. and Africa froze for much of the past eight years during the presidency of George W. Bush. The Obama administration is keen to revitalize cooperation with key African nations and has been emphasizing good governance and development while urging Africans to shun corruption and autocracy.

China took advantage of the Bush administration’s preoccupation with the war against terrorism in the Middle East and moved to Africa in a big way, increasing Beijing’s investment in the continent from almost nothing to $107 billion last year. That?s more than the $104 billion for the U.S. for the same period. The current U.S. recession, which started in December 2007, has only made the situation worse by forcing U.S. companies to scale back or postpone their investments in Africa and elsewhere.

China is not the only country threatening U.S. dominance in Africa. Brazil, Russia and India — the three other members of so-called BRIC group of nations, which includes China — have also stepped up their respective investment in the continent.

Russian President Dmitry Medvedev toured Egypt, Namibia, Angola and Nigeria in June. ?India is looking for telecommunications tie-ups, while Brazil is looking for a market for its oil, sugar and ethanol. China, meanwhile, is mostly interested obtaining in Africa?s commodities.

The United States, however, has a leg-up on efficient agricultural technologies that remain untapped and could serve as the new push for ?green? growth. Last week, U.S. Secretary of Agriculture Tom Vilsack said U.S. firms unable to stay within greenhouse-gas thresholds at home might well want to invest in such projects in Africa to offset their emissions. Such investment would be a win-win, as it would provide jobs in Africa while helping the environment.

The United States and China are the world’s leading carbon polluters and President Barack Obama has prioritized emission controls to mitigate against climate change. Environmental activist have long decried deforestation in Brazil’s Amazon and Kenya?s Mau Forest, arguing it diminishes the ability to absorb greenhouse gases at a time when climate change effects have started to be felt.

?With productive agriculture to absorb carbon, you have a tremendous opportunity to assist in greenhouse gases through what you grow,? Vilsack said. ?Those American companies that cannot meet their thresholds could do so by investing both domestically and internationally in projects that absorb carbon. This could be an opportunity for Africa in particular.?

African companies have also been moving toward opportunities presented by carbon trading. Kenya?s Mumias Sugar Ltd. and electricity generator KenGen are some of the firms hoping to profit from the sale of carbon credits.