Tibor Nagy. Picture: SUPPLIED
Tibor Nagy. Picture: SUPPLIED

The world’s pre-eminent superpower is stepping up its efforts to forge stronger trade relations with Africa, US assistant secretary for African affairs Tibor Nagy said in Johannesburg on Friday.

This, in part, is to counter growing Russian and Chinese influence on the continent.  

Nagy’s SA visit followed his trip last week to Maputo, where he attended the US-Africa Business Summit. At virtually the same time, Russia was hosting the annual meeting of the African Export-Import Bank (Afreximbank) in Moscow.

Afreximbank’s annual meeting, which began on Friday, was opened by Russian foreign minister Sergey Lavrov, who declared that Russian investment in Africa, which has been on the rise in recent years, reached $20bn in 2018.

The US push for stronger trade and business ties with Africa has led to the creation of an initiative called Prosper Africa, which was announced in 2018 by US national security adviser John Bolton.

The initiative, a multi-agency US government effort, aims to double US investment and trade with Africa in five years. It is partly aimed at countering Chinese and Russian influence on the continent.

“The predatory practices pursued by China and Russia stunt economic growth in Africa, threaten the financial independence of African nations, inhibit opportunities for US investment, interfere with US military operations and pose a significant threat to US national security interests,” Bolton said when he introduced the initiative in December.  

The continent already enjoys preferential access to the US market through the African Growth & Opportunity Act (Agoa), which was enacted in 2000 by then president Bill Clinton and extended by presidents George W Bush and Barack Obama.

Agoa is 'safe'

Speaking at a public engagement at the Wits Business School on  Friday, Nagy said Agoa is “safe” until it is due to expire in 2025.

The Prosper Africa initiative, by contrast,  is “an ambitious effort to increase two-way trade between the US and Africa”, he said. 

The initiative comes at a time when President Donald Trump has been increasingly combative over his country’s trade relations with the rest of the word, most notably China, its largest trading partner.

The hostility has led both countries to impose tariffs on imports from the other. In the process, it has caused tremors in international financial markets, which fear further protectionism could negatively affect global economic growth.

In response to questions about SA’s youth unemployment problem, Nagy said foreign direct investment could be a big part of the solution. However, he believes African countries have work to do to create a “welcoming environment” for US capital.

“American companies are sitting on billions and billions of dollars, but they are only going to a welcoming environment. So we talk to African countries about creating a welcoming environment, which includes letting foreign companies compete on a level playing field, reducing corruption and honouring the sanctity of contracts,” said Nagy. 

thompsonw@businesslive.co.za