One of the goals of U.S. President Barack Obama’s upcoming tour of Africa is to promote U.S. business interests across a continent now dominated by China. The competition between the economic giants is playing out in Tanzania, the last stop on Obama’s tour.
While in Tanzania’s economic hub, Dar es Salaam, the president is due to meet Monday with American and African business leaders to find ways to get U.S. companies a foothold in African markets.
U.S. companies have been trailing behind China in African investment, and China recently overtook the United States as Africa’s largest trading partner.
Even Obama’s visit to Tanzania follows in the wake of Chinese President Xi Jinping’s trip to the East African country in March.
The director of the Africa Center at the Atlantic Council in Washington, J. Peter Pham, said the United States has some catching up to do.
“China is well ahead not because it necessarily offers the best deal, but rather because it often offers the only deal," said Pham. "American businesses, by and large, have not - with the exception of those involved in resource extraction - have not really fully discovered the potential in the African market.”
Pham said the United States also has failed to sustain some of the previous investments it has made in Africa, allowing China to get the upper-hand.
Take Tanzania as an example. In 2008, under former U.S. President George W. Bush, the U.S.-funded Millennium Challenge Corporation signed a nearly $700-million compact with Tanzania to improve roads and other infrastructure in the country.
It is the most funding the aid agency has ever awarded. But much of that money is going, more or less directly, to Chinese companies who have won construction contracts to implement the projects.
Chinese face time
So not only do Chinese firms benefit from the work, but Tanzanian citizens see Chinese construction crews building roads and laying pipes.
Pham says hiring Chinese firms to do American-financed work is, in a way, self-defeating for U.S. interests.
“If the purpose of foreign assistance is to win hearts and minds - ordinary people do not look into the fine print of who finances what, they see who does what,” he said.
The United States has downplayed any concerns about China’s growth in Africa or that they are in direct competition.
“There is a lot of, I think, angst [worry] about things that change in trade relationships and when relationships change and new players come in. But I do not think there is a lot to be too concerned or upset about the rise of China,” said South Africa-based U.S. Senior Commercial Officer Larry Farris.
Farris added that development, no matter who is behind it, is good for Africans.
China and the United States also have a markedly different approach to African aid and investment.
When Xi visited Tanzania in March he emphasized that his country would always offer assistance with no political strings attached.
American assistance, though, often is tied to political or economic reforms.
University of Nairobi political science chair Adams Oloo said the United States has a tricky task in balancing its ideals with its business interests.
“While China on the other hand is like, ‘I will do business with anybody, what goes on inside that country is none of my business.’ And I think that is quite a challenge for the West, how to counter China and the East while at the same time holding the values that they want to see implemented in East African countries,” said Oloo.
This trip is Obama’s second visit to Africa since he visited Ghana during his first term in office in 2009, during which time he spent less than 24 hours on the continent.