The availability of BRI loans has allowed African governments to choose between international assistance models for the first time, and they are increasingly accepting that offered by the PRC. Among other observers, the Atlantic Council was right to conclude the result is to “undoubtedly reduce US influence.”
As for U.S. standing, two years after the current administration came into office, it announced its “Prosper Africa” plan. Despite its goals of strengthening Africa’s middle class and increasing their “access to financing,” it is explicitly designed to “put the interests of the American people first” and “make certain that ALL [sic] aid to the region [...] advances these U.S. interests.” The president made international headlines in early 2018 for repeatedly referring to African nations at large as “shithole countries” and describing Nigerian households as “huts.” As of this writing, he has left official travel to the continent to his wife and daughter. Opportunities to sustain and expand political ties have not been seized, which has arguably already manifested in the United States’ exclusion from the decision to allow the PRC to build a military base in Djibouti.
THE UNITED States is significantly lagging behind the PRC in its trade posture with sub-Saharan countries. Between 2006 and 2016, American exports to the region rose by 7 percent, while those of the Chinese increased by 233 percent—a jump more than four times the global average. Similarly, during that period, the PRC imported an additional 53 percent worth of products from sub-Saharan countries while American levels decreased by 66 percent. Since that time, U.S. trade levels with the continent have continued to fall each year despite the existence of the African Growth and Opportunity Act, which is considered to be the “most liberal” preferential trade agreement of the United States with any territory.
Furthermore, due to the second-order effects of U.S. tariffs against China, the African Development Bank estimates that the GDPs of resource-intensive sub-Saharan countries could fall by 2.5 percent by 2021. The International Monetary Fund also adjusted its 2019 growth projections for the entire continent from 3.3 to 3.1 percent due to these trade tensions, alongside the effects of Brexit and slowing Chinese growth. Ambassadors representing the PRC have already capitalized on the opportunity to “sow anti-U.S. sentiment” by condemning the impact of U.S. tariffs on African economies—a view then echoed by the former president of Zambia and the current leaders of Cape Verde, Ghana, Nigeria, and South Africa.
Thankfully, the United States has recently sought to position itself as a better partner for African countries in the financial realm. In October 2018, Congress passed the Better Utilization of Investments Leading to Development (BUILD) Act, which explicitly intends “to provide countries a robust alternative to state-directed investments by authoritarian governments and [U.S.] strategic competitors” like the PRC. It has been lauded as “the biggest step forward in US development policy” since 2004.
The act consolidates two existing development finance entities—the Overseas Private Investment Corporation and the Development Credit Authority—to create a new agency called the U.S. International Development Finance Corporation, or DFC, which will offer more numerous targeted loans and legal guarantees for American private sector investments in developing countries. As an “OPIC on steroids,” the DFC will be able to distribute more than twice as much funding as its predecessor; allow equity investments; and provide insurance in the case of war, expropriation, or political turmoil.
The BUILD Act is a step in the right direction for the United States. Among its requirements for potential beneficiaries, ventures must support the “build[ing] and strengthen[ing of] civic institutions,” “broad-based economic growth,” and poverty reduction. DFC-backed businesses are also prohibited from engaging with nations that “support terrorism or violate human rights.” Together, these provisions improve prospects for global security and financial growth—and hopefully public opinion of the United States in developing countries.
Critically, the BUILD Act will also enable and sustain investments that are distinct from those of the PRC. For example, the BRI does not support small- and medium-sized businesses, and an estimated 90 percent of its projects are Chinese-owned and operated. These structural gaps threaten to exacerbate wealth inequality—a noteworthy consideration given that ten of the nineteen “most unequal countries” are in sub-Saharan Africa. By expanding on pre-existing OPIC programs and their legal parameters, the DFC is poised to offer an attractive alternative. Congress revised U.S. law so that, in replacing OPIC, the DFC should issue loans to businesses that “directly serve the needs of small-scale farmers, small rural entrepreneurs, and rural [associations],” as well as “partner with [...] local institutions in sub-Saharan Africa, including private sector actors” to build sustainable energy infrastructure.
In turn, many Americans are positioned to benefit. The BUILD Act states that at least half of DFC funds must be distributed to small-scale American businesses, explicitly including women-, minority-, and veteran-owned agencies. The DFC is also designed to distribute financial risks among private sector organizations and recipient countries to better protect the interests of American taxpayers.
YET SOMETHING as promising as the BUILD Act is not enough. To bolster U.S. standing and interests on the African continent, we recommend that the administration capitalize on two decades of goodwill earned through foreign aid by more proactively pursuing “strategic health diplomacy.” Reports from the Bipartisan Policy Center (BPC) have established that “when national governments do good abroad by actively working to improve public health, they may also further their own foreign policy agenda.” In short, investments in public health have proven to be an asset for reputational influence. Strategic health diplomacy offers the United States a unique opportunity to non-confrontationally counter some Chinese influence on the continent, as well as position itself as a key supporter of Africa’s rise.
There are multiple direct advantages to pursuing strategic health diplomacy, including mitigating cross-border epidemics and garnering positive international humanitarian standing. Two of the United States’ most widespread and successful health partnerships—the President’s Emergency Plan for AIDS Relief (PEPFAR), and the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund), to which it is a primary contributor—have been shown to advance such interests as “…socioeconomic development; public opinion toward the United States; governance, stability and civil society engagement; and diplomatic engagement with the United States” among target countries. These results illustrate the considerable benefits consequential to American interests both at home and abroad at a time when the PRC is increasing its investments in developing nations.
This is all the more apparent in Africa: twenty-one of the world’s thirty “highly fragile” states are in the continent. Rising levels of destabilizing Chinese investment, as well as the repercussions of extreme debt distress, increasing corruption, and potential state collapse, pose substantial threats to international security. However, ongoing strategic health diplomacy has already proven to be a powerful counterforce in fragile states.
State instability and the prevalence of epidemic diseases like HIV/AIDS can feed off each other. High incidences of HIV/AIDS compromise both the quality of health services in affected regions and the apparent effectiveness of local governments, potentially contributing to civil unrest and undermining the health of militaries. The coincidence of fragile governance and epidemic infectious diseases creates a vicious cycle: as a disease undercuts a government’s stability, that nation’s ability to prevent and treat it will be compromised, leading to increased infection and mortality rates.
PEPFAR investments, on the other hand, are directly correlated with stronger governance and civil engagement, leading to overall state stability. A 2018 BPC report documented that since the program’s inception in 2003, countries receiving the highest per capita amounts of U.S. aid directed toward health have witnessed “a large and immediate decline in the level of state fragility” based on World Bank indicators such as political stability, government effectiveness, and rule of law. Sub-Saharan African countries receiving PEPFAR assistance were particularly affected in this respect, having witnessed a 40 percent drop in rates of “political instability and violent activity” since 2004. This robustly statistically significant correlation is likely the result of strategic health diplomacy’s other proven benefits to population health and socioeconomic growth.
Global Fund investments, which also target tuberculosis and malaria, and spur burden-sharing by other donors and aid recipients, have had similarly notable effects on improving civic participation and government accountability. A 2019 study published in the Annals of Global Health found a “significant, beneficial effect” of Global Fund assistance in terms of implementing countries’ “political freedoms, government accountability, quality of public services and independence of state institutions, rule of law, and controls on corruption.” These results are at least partly attributable to its unique model of development assistance, which distributes public and private donors’ contributions to a closely-monitored group of representatives of the public and private sectors, faith-based and non-governmental organizations, as well as individuals themselves living with the diseases. Different from some traditional inter-governmental organizations, the multi-stakeholder model fosters collaboration and accountability.
Another positive outcome of supporting the health and well-being of people in Africa is the greater ability to prevent, treat, and mitigate various other cross-border epidemics. In May 2019, the White House released its first-ever “Global Health Security Strategy,” which formalizes the United States’ “national security interest” in and commitment to fighting infectious diseases. It acknowledges that PEPFAR and other U.S. global health programs have had “direct and indirect outcomes” that enabled a variety of nations to be “poised to contribute to global health security” in their prevention and containment of epidemics. Should such a global health strategy be carried out effectively, especially given the coronavirus (COVID-19) pandemic, countless lives around the world will be saved from these fatal diseases as well as shielded from the resultant civil, political, and economic instability.