China’s investments in sub-Saharan Africa have grown 40-fold since 2003 and its state-owned enterprises have been able to roll out projects quickly and in every country on the continent, primarily building things like hydroelectric dams on the Nile, highways to oil regions and railways to carry iron ore. China’s government joined with the African Development Bank to create the $2 billion Africa Growing Together Fund. While Chinese companies have been criticized for importing Chinese labor rather than training and employing Africans, they are now building garment manufacturing plants to take advantage of Africa’s cheap labor amid high unemployment.
U.S. development in Africa has been private-sector driven and concentrated in just a few countries including Liberia, Mauritius and South Africa. President Barack Obama wants American companies to do more. In 2013, the U.S. began the Power Africa initiative to build electricity grids and generators across six countries by working with African companies and U.S. partners that have top-of-the-line technology, including General Electric, and offering $7 billion in financial support and loan guarantees. In August 2014, U.S. companies pledged $14 billion in investments at the U.S.-Africa Leaders Summit in Washington.
The Background
European imperialism left deep scars in Africa. During the Cold War, the U.S. and Soviet Union intervened to put dictators in power who lined their own pockets and left legacies of poverty, famine and conflict. Foreign aid was often misused and diverted for weapons. Food aid imported to combat famines depressed prices for local farmers. Unrest led to little investment in infrastructure; even now about 600 million sub-Saharan Africans — about 70 percent of the population — lack electricity. Though Africa is rich in minerals and energy sources, few Africans have benefited from exports of those materials. Some economists and policymakers have even argued that dependence on natural resources does more harm than good — a phenomenon they call “the resource curse.”
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