As Yellen woos Africa, sceptics ask ‘Is the U.S. here to stay?’

by Andrea Schaal and Karen Du Plessis

LUSAKA (Reuters) – US Treasury Secretary Janet Yellen’s three-nation trip to Africa – the leading edge of a new diplomatic push by the Biden administration – aims to show the continent that the United States is a true partner, one here for the long haul .

But after decades of losing ground to China and years of fury from Donald Trump, when the former president threatened to slash aid and withhold military support, it’s a tough sell.

As Africa grapples with economic headwinds caused by the COVID-19 pandemic, the war in Ukraine, and especially Washington’s own monetary policy, Africans are seeking proof that the United States will stay the course this time.

Yellen, so far, has been at pains to make guarantees.

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

Yellen’s trip kickstarts a year of high-level US visits that will include President Joe Biden, Vice President Kamala Harris, Trade Representative Catherine Tay and Commerce Secretary Gina Raimondo.

Washington hosted African leaders from 49 countries and the African Union at a summit in December, where Biden said the United States was “all in” on Africa’s future and planned to deliver $55 billion over the next three years .

African officials have widely welcomed the United States’ renewed engagement. But the timing, two years into Biden’s four-year term, is seen by many as “late and somewhat half-hearted,” said Chris Ogunmode, a Nigerian researcher and associate editor at World Politics Review.

“The fear that Biden might not comply, or that he could be defeated and replaced by a hostile Republican administration, certainly exists,” he said.

China, debt and rate hikes

As the United States asserts its long-standing ties to Africa and a new commitment to boosting trade and investment, it is catching up with China and facing a growing challenge from Russia .

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

US officials – both Democrats and Republicans – have criticized China’s borrowing as lacking transparency and predatory.

In Senegal, Yellen warned Africa against “glossy deals that can be opaque and ultimately fail to really benefit people” and accused China of dragging its feet on a crucial debt restructuring in Zambia.

But US fiscal policy is creating its own pressures.

African countries have become collateral victims of this year’s rate hikes by the US Federal Reserve, aimed at curbing inflation at home.

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

AfDB said the cost of debt service is expected to reach $25 billion next year, up from $21.4 billion in 2022, according to the World Bank.

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

Meanwhile, the United States has largely failed to offer a viable alternative to cheap Chinese debt, officials said.

“China is an important partner,” Congolese Finance Minister Nicolas Kazadi told Reuters. “It has been clearly shown that mobilizing American investors is not going to be easy.”

A senior US Treasury official said the United States has 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 for bridges or highways … But if you just think about the lives saved – it’s estimated that our association with (AIDS relief) is 25.” Millions of lives have been saved – it’s real.”

russian conflict

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

US officials noted that Russia has blocked Ukrainian grain exports, fueling food inflation and one of the worst food crises in Africa’s history.

On Friday, Yellen said in Senegal that the war was hurting the continent’s economy, and that a set of seven-lead price caps on Russian crude and refined products could save African countries $6 billion annually.

On Monday, however, South Africa 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 arrived.

South African Foreign Minister Naledi Pandor, standing with Lavrov, told reporters, “All countries hold military exercises with friends around the world.”

Foreign policy experts, including Ibrahim Rasool, South Africa’s former ambassador to the United States, say Washington, Beijing and Moscow are all courting African countries with their own interests in mind. African leaders hoping for greater representation in bodies such as the G20 and the UN Security Council could also play the game.

“The US sometimes has good intentions and meetings, but there is not always follow-up,” Rasool said.

(Additional reporting by Tim Cox in Johannesburg, Ngouda Dion in Dakar, and Karin Strohecker, Jorgelina do Rosario and Mark Jones in London; Writing by Joe Bavier; Editing by Alistair Bell)