gvA Update

Going by the comments Rex Tillerson made in Africa before returning home to face firing, the United States may be suspicious of Chinaâs strong and growing presence on the continent. Is China ripping off Africa. According to a study by McKinsey, about 90 percent of Chinese firms working in Africa are privately owned and also, close to 90 percent of the employees in Chinese firms in Africa are Chinese. The main anchor of U.S. trade and probably overall economic relations with sub-Saharan Africa since the year 2000 has been the African Growth and Opportunity Act, or AGOA. The program offers preferential access to U.S. markets by eliminating import tariffs. Policymakers hoped that AGOA, as the primary U.S. trade policy for the region, would foster economic and political development in Africa. Unfortunately, U.S. trade with AGOA participants has dropped since its 2008 peak almost to its pre-AGOA total, while African trade relations with China, have expanded. In 2012, China had a trade value of about $200 billion with Africa, compared to about $108 billion of US trade with the continent. The US has a very shallow and narrow distribution of its trade with Africa. Indeed, about 90% of U.S.-Africa trade today is in crude petroleum exports. In contrast, Chinese firms in Africa spread across manufacturing, services, trade, construction and real estate. Many constraining factors exist and undermine productivity in Africa, making it less able to produce goods and services for advanced economies. African nations are still lacking in significant accumulation of capital which can increase output, and therefore economic growth and increased competitiveness. Unfortunately and because of this serious deficit in capital accumulation and technological advancement, Africa continues to lag behind in global competitiveness. Africa needs to tap its huge diaspora population in America to gain technical know-how and even a good footing and traction for US and other markets. To be sure, Africa has what it takes to be very useful to China and America. The coming consumers are in Africa and if the continent gets its act together, the coming producers, leveraging its vast natural resources are also in Africa. I am Magnus Kpakol, and that is my view.

 

Posted: Mar 21st, 2018 @ 03:18:42 AM