US Secretary of State Mike Pompeo kicked off his three-stop Africa tour this week in Senegal, followed by brief visits to Angola and Ethiopia, aiming to underscore security commitments and economic ties in a region where US investment has fallen behind that of China.
China overtook the US more than a decade ago as Africa’s primary investor, with China’s Commerce Ministry now presiding over an economic relationship which is now worth $204 billion.
Senegal alone has attracted $1.6 billion in Chinese investment and is angling for much more in the oil sector as its state companies jockey for favour ahead of a contracting bonanza.
Angola owes China $23 billion, almost all of it collateralised on oil, while Ethiopia owes more than $12 billion, with China its largest trading partner.
Ethiopian Prime Minister Ahmed Abiy has begun to voice misgivings. In December he complained that the terms of Chinese loans has damaged Ethiopia’s economy and that it was wrong to insist on debt repayment before project completion. He forced a renegotiation of terms.
For its part, China had long been grumbling about lower-than-expected revenues and canceled some interest-free loans.
A precedent was set in early 2019 when China wrote off some $80 million from Cameroon’s debt “to help ease economic conditions” in the central African country.
China has already become the biggest holder of African debt, as Beijing's Belt and Road Initiative offer's yet more largesse, soft power is cemented by thousands of African students headed to Chinese colleges and Chinese entrepreneurs lead a small trading boom by entering sectors hitherto reserved for citizens of African countries.
Worried by this influence, Pompeo has argued against China’s debt-diplomacy, warning that cheap credit can lead to asset seizure by Chinese banks, as happened to a deep-water port in Sri Lanka when that government struggled to keep up payments.
There is concern in the US that a lack of engagement has allowed countries like Russia to move in, trading debt write-downs for arms deals and energy contracts with little regard for the financial capacity of Russian companies to follow through.
Pompeo set off on his African tour from Munich, Germany, where a security conference had just concluded on the global terror threat.
This represents another serious impediment to securing African economic stability, with frequent attacks across the Sahel now threatening oil and gas activities.
Senegal President Macky Sall earlier warned Washington that a proposed drawdown of US troops from the Sahel would be “misunderstood” by African leaders, but he appears to have found little reassurance.
“We are looking at West Africa to make sure we have our force levels right, and we’ll be having a conversation with all the countries of the region when our review is done," Pompeo told his counterpart in Senegal, Amadou Ba.
On his visit to Angola, Pompeo told the Angola Chamber of Commerce that the US oil and gas sector plans to invest in excess of $2 billion in the country, and that more is in the pipeline if President Joao Lourenco’s financial transparency and anti-corruption reforms succeed and take root.
Pompeo praised Angola’s efforts to end graft: “Here in Angola, damage from corruption is pretty clear,” he told a business gathering in the capital Luanda.
Under the New Financial Cooperation programme, launched by the US earlier this year to facilitate private investment in energy an agriculture across the globe, Africa stands to attract some $60 billion from this initiative, according to Pompeo.
Meanwhile, French President Emmanuel Macron has struggled to fund his Sahel counter-terror initiative, Operation Barkhane, with only lukewarm support from European Union members, and is unlikely to secure increased US assistance.
French Defence Minister Florence Parly lobbied in Washington earlier this month to prevent the US troop drawdown, while French defence expert Elie Tenenbaum predicted the planned departure will mean fewer fighter planes despatched and reduced intelligence-gathering resources.