US pledges to step up Africa investment as Chinese lending slides to 13-year low
Recent visits to Africa by US Treasury Secretary Janet Yellen and US Ambassador to the United Nations Linda Thomas-Greenfield came as a new study by Boston University found China’s overseas investments in the Covid-19 era have slid to a 13-year low.
Analysts say Washington is trying to compete with China for influence in Africa, with China having invested heavily on the continent through its Belt and Road Initiative and with the US playing a catch-up by recently pledging to step up its own investments.
The report by Boston University’s Global Development Policy Center found loan commitments from China’s two policy banks — China Development Bank and the Export-Import Bank of China — totaled $3.7 billion in 2021, sharply down from an average of $35.6 billion a year in the 2008-2021 period. The study notes that China has struggled to recoup its money from several African countries and now has to participate in complicated debt restructuring negotiations, such as currently in Zambia.
Washington, on its part, pledged to invest $55 billion in Africa at the US-Africa Summit in December last year. To that end, Thomas-Greenfield noted that people and leaders in Africa “are extraordinarily appreciative of the African Leaders Summit that we just hosted and the efforts that we are making to engage more proactively on the continent of Africa.” Also, Treasury Secretary Yellen sought to assure the African leaders that Washington has many programs “that are oriented to help efforts to build infrastructure, and when we do that, we want to make sure that we don’t create the same problems that Chinese investment has sometimes created here.”
But it does not mean that the US is going to replace China as a top investor in Africa any time soon. Instead, Chinese President Xi Jinping’s landmark Belt and Road initiative to bring infrastructure to developing countries may just be transforming the way money is spent, the authors of the Boston University study said.
