A New Cold War

By Mehari Taddele Maru

Last week, the 12th US-Africa Business Summit, a high-level event attended by 11 African heads of state and government and some 1,000 business leaders, was held in Maputo, Mozambique. During the three-day event, US officials unveiled a USD 60 billion investment agency which will seek to invest in low and middle-income countries, with a special focus on Africa.

The announcement came six months after National Security Advisor John Bolton presented the Trump administration’s “New Africa Strategy”. According to the document: “Great power competitors, namely China and Russia, are rapidly expanding their financial and political influence across Africa. They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States.”

Although both China and Russia are mentioned, over the past few months, the US has demonstrated that it is mainly concerned about the former. In fact, it already appears that Africa is set to become yet another battleground for the escalating trade war between Beijing and Washington.

With increasing foreign military presence and growing diplomatic tensions, the continent is already witnessing the first signs of an emerging new cold war. And just like the previous one devastated Africa, fueling wars and forcing African governments to make economic choices not in their best interests, this one will also be detrimental to African development and peace.

Economic war

China’s approach to Africa has always been trade-oriented. The continent became one of the top destinations for Chinese investment after Beijing introduced the so-called “Go Out” policy in 1999 which encouraged private and state-owned business to seek economic opportunities abroad.

As a result, Chinese trade with Africa has increased 40-fold over the past two decades; in 2017, it stood at USD 140 billion. Between 2003 and 2017, Chinese foreign directed investment (FDI) flows have also jumped more close to 60-fold to USD four billion a year; FDI stocks stand at USD 43 billion – a significant part of which has gone to infrastructure and energy projects.

China has significantly expanded African railways, investing in various projects in Kenya, Ethiopia, Djibouti, Angola and Nigeria; it is currently building a massive hydropower plant in Angola and have built Africa’s longest railway connecting Ethiopia and Djibouti; it has built the headquarters of the African Union in Addis Ababa and the West African regional bloc ECOWAS in Abuja.

By contrast, for a long time, the US has viewed Africa as a battlefield where it can confront its enemies, whether the Soviets during the Cold War, terrorists after 9/11 or now the Chinese. Washington has never really made a concerted effort to develop its economic relations with the continent.

As a result, trade between the US and Africa has decreased from USD 120 billion in 2012 to just over USD 50 billion today. US FDI flows have also slumped from USD 9.4 billion in 2009 to around USD 330 million in 2017. The new USD 60 billion investment fund announced last week is a welcome initiative from the US but it will not be able to challenge Chinese economic presence on the continent. Just last year Chinese President Xi Jinping pledged USD 60 billion too but dedicated it solely to investment in Africa.

The US has repeatedly accused China of using “debt to hold states in Africa captive to [its] wishes and demands” and has warned African states to avoid Chinese “debt diplomacy” which is supposedly incompatible with the independence of African nations and civil society and poses “a significant threat to US national security interests”.

Yet, Africa is only the fourth-biggest recipient of Chinese FDI after Europe (mainly Germany, UK and Netherlands), the Americas (mainly the US and Canada), and Asia. The US has also borrowed heavily from China; currently, its debt to its rival stands at USD 1.12 trillion. By contrast, Africa owes China around USD 83 billion.

  • A cross section of African leaders at the 'Business for Africa' conference in Egypt
    A cross section of African leaders at the ‘Business for Africa’ conference in Egypt

Africans are fully aware of and concerned about high indebtedness, trade imbalances, the relatively poor quality of Chinese goods and services and Beijing’s application of lower standards of labour and environmental practices. But many do not share the American perspective that their economic relationship with China is to their detriment and rather see it as an opportunity that provides much-needed unconditional funding and that takes into account local priorities.

As Djibouti’s President Ismail Omar Guelleh has pointed out, “The reality is that no one but the Chinese offers a long-term partnership.”

The pressure the US is currently exerting on African countries to move away from partnerships with China could hurt African economies. It could force African countries into making choices that are not in their best economic interests and miss out on important development projects or funding.

Meanwhile, the US-China trade war is already affecting the continent. According to the African Development Bank, it could cause as much as a 2.5 per cent decrease in GDP for resource-intensive African economies and a 1.9 per cent dip for oil-exporting countries.


The escalating tensions between the US and China could also end up threatening the security of the continent. Both countries are militarily involved in Africa.

Over the past 15 years, the Chinese People’s Liberation Army has been engaged in a number of security missions across the continent, making modest auxiliary troop contributions to peacekeeping operations in Sudan, South Sudan, Liberia, Mali and the Democratic Republic of Congo. It has also contributed millions of dollars of peacekeeping equipment to the African Union Mission in Somalia and provided significant funding to the Intergovernmental Authority on Development for its mediation in South Sudan.

In 2017, the first Chinese overseas military base was opened in Djibouti. The facility, which currently hosts some 400 staff and troops, and has the capacity to accommodate 10,000, is officially supposed to provide support for the ongoing anti-piracy operations of the Chinese navy, but it also plays a role in securing maritime routes, part of the Belt and Road Initiative. There has also been speculation that this is the first of a number of planned bases meant to secure Chinese interests in Africa.

China’s military presence in Africa, however, pales in comparison to that of the US. Over the past few years, US Africa Command has run some 36 different military operations in 13 African countries, including Burkina Faso, Cameroon, Central African Republic, Chad, Democratic Republic of Congo, Kenya, Libya, Mali, Mauritania, Niger, Somalia, South Sudan and Tunisia. It has more than 7,000 troops deployed on the continent.

It has a large base in Djibouti – the biggest and only permanent US military base in Africa – but it also runs at least 34 other military outposts scattered across the west, east and north of the continent where US troops are deployed and military operations (including drone attacks) are launched from.

Meanwhile, the US-China trade war is already affecting the continent. According to the African Development Bank, it could cause as much as a 2.5 per cent decrease in GDP for resource-intensive African economies and a 1.9 per cent dip for oil-exporting countries.

Source: Reporter

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