Cyril Ramaphosa will meet US treasury secretary Janet Yellen on Wednesday

US treasury secretary Janet Yellen will meet President Cyril Ramaphosa on Wednesday during her visit to the SA, the US treasury said on Monday.

“She will meet government, business and civil society counterparts to discuss how to strengthen our bilateral relationship and address regional and global issues of concern, including deepening economic ties and advancing a just energy transition,” it said.

Yellen is on a three-country trip to Africa — the leading edge of a new diplomatic push by the Biden administration — that aims to show the continent that the US is a true partner, one here for the long-haul.

But after decades of losing ground to China and the tumult of the Donald Trump years, when the former president threatened to slash aid and roll back military support, it is a tough sell.

As Africa struggles with economic headwinds caused by the Covid-19 pandemic, the war in Ukraine and, notably, Washington's own monetary policy, Africans are asking for proof the US will stay the course this time.

Yellen, so far, is at pains to make guarantees.

“I don’t know how I can give assurances, honestly,” she told Reuters in an interview en route from Senegal to Zambia. But Republicans and Democrats alike support long-standing initiatives, including in the areas of health and trade, she said.

Yellen’s trip kicks off a year of high-level US visits that will include US President Joe Biden, vice-president Kamala Harris, trade representative Katherine Tai, and commerce secretary Gina Raimondo.

Washington hosted African leaders from 49 countries and the AU at a summit in December, where Biden said the US was “all in” on Africa's future and planned to commit $55bn over the next three years.

African officials have broadly welcomed the US’s renewed engagement. But the timing, two years into Biden's four-year term, is viewed by many as “late and somewhat halfhearted”, said Chris Ogunmodede, a Nigerian researcher and associate editor of World Politics Review.

“The fears that Biden will not follow through, or that he could lose and be replaced by a hostile Republican administration, definitely exist,” he said.

China, debt and rate hikes

As the US touts its long-standing ties to Africa and a renewed commitment to ramping up trade and investment, it’s playing catch-up with China and facing a growing challenge by Russia.

Chinese trade with Africa is about four times that of the US, and Beijing has also become an important creditor by offering cheaper loans than Western lenders.

US officials — both Democrats and Republicans — have criticised China’s lending as lacking transparency and predatory.

In Senegal, Yellen warned Africa against “shiny deals that may be opaque and ultimately fail to actually benefit the people” and has accused China of dragging its feet on a critical debt restructuring in Zambia.

But US fiscal policy is creating its own drag.

African countries have become collateral victims of the rate hikes by the US Federal Reserve, aimed at curbing inflation in the US.

“Tightening financial conditions and the appreciating dollar have had dire consequences for most African economies,” the African Development Bank (AfDB) wrote in a report last week.

The cost of debt service is expected to hit $25bn in 2024 according to the World Bank, up from $21.4bn in 2022. In local currency terms, it’s risen even faster, increasing the risk of debt distress, the AfDB stated.

African countries are also finding it harder to access capital markets to meet their fiscal needs and refinance maturing debt.

The US, meanwhile, has largely failed to offer viable alternatives to cheap Chinese credit, officials said.

“China is an important partner,” Democratic Republic of Congo Finance Minister Nicolas Kazadi told Reuters. “It is clearly shown that it’s not easy to mobilise US investors.”

One senior US treasury official said the US had long been engaged in Africa, funding anti-HIV work and working on other health issues. “We don’t often talk about it. It's not named bridges or highways ... but if you think about just the sheer lives saved — estimates of 25-million lives saved with our engagement with (Aids relief) — that is real.”

Russian conflict

African countries have largely rejected US pressure to take sides in the Russia-Ukraine conflict, some of them citing Moscow's colonial-era support for their liberation movements.

Russia has blocked Ukrainian grain exports, driving up food inflation and aggravating one of the worst food crises in Africa's history, US officials note.

On Friday, Yellen said in Senegal that the war was hurting the continent's economy, and that a Group of Seven-led price cap on Russian crude oil and refined products could save African countries $6bn annually.

On Monday, though, SA hosted a visit by Russian Foreign Minister Sergei Lavrov and defended its decision to hold joint naval exercises with Russia and China off its east coast next month — a day before Yellen was scheduled to arrive.

“All countries conduct military exercises with friends worldwide,” foreign minister Naledi Pandor, standing alongside Lavrov, told reporters.

Washington, Beijing and Moscow are all courting African nations with their own interests in mind, say foreign policy experts including Ebrahim Rasool, a former SA ambassador to the US. African leaders, hoping for greater representation in bodies like the G20 and UN Security Council, can play that game too.

“The US sometimes has good intentions and meetings but not always the follow-through,” Rasool said, adding that sometimes Russia and China are needed to stir the US into action.

Reuters