The history of the global economy will be written in Africa according to the US Treasury: Faced with Chinese competition in Africa, the US Treasury has no shortage of arguments to make up for lost time in the economic arena.
The history of the global economy will be written in Africa according to the US Treasury
African demographics: an asset? While growth in sub-Saharan Africa continues to slow down, weighing on poverty reduction targets in many countries, according to the World Bank’s latest economic outlook, published on June 7, the United States wants to turn the strong demographic growth of sub-Saharan countries into a strength.
A senior US Treasury official has declared that demographic trends mean that American business leaders will be looking to Africa and South Asia over the coming decades. These comments come against a backdrop of fierce competition between the various powers – China, the United States and Russia.
A population set to double
Jay Shambaugh, Undersecretary for International Affairs at the U.S. Treasury, argued that the U.S. was a more attractive financing option than China for the region’s states. “The growth is pretty clear,” he said Wednesday at a conference in Washington. “The story of the global economy over the next 50 years will be written in sub-Saharan Africa.”
According to the World Bank, the population of sub-Saharan Africa will almost double in the next thirty years, with rapid growth in the Democratic Republic of Congo and Tanzania, for example. This region alone will contribute half of the world’s growth by 2050.
Beating China to the punch
After years of disinterest, his successor, President Joe Biden, is bending over backwards to make up for lost time. Since the beginning of the year, more than five officials have already been dispatched to the continent, including Vice President Kamala Harris, US Ambassador to the United Nations Linda Thomas-Greenfield, Treasury Secretary Janet Yellen, First Lady Jill Biden and Secretary of State Antony Blinken.
On the ground, Treasury Secretary Janet Yellen has made every effort to revive ties on the continent and counter Beijing’s influence. She has pushed for progress in debt restructuring talks with several countries in crisis, including Zambia. In recent years, efforts to restructure the debts of low-income countries have been hampered by disagreements between traditional creditors like the Paris Club – mainly wealthy Western countries – and new entrants like China – the biggest lender to developing economies.
For Jay Shambaugh, “China’s presence in the region’s countries sometimes suggests that international financial institutions and foreign direct investment have not provided sufficient funds. But if you ask them what they prefer if both options are on the table, I’d say our offer is the best,” he said, indicating that “the United States has a lot to offer” to the countries south of the Sahara. As US-China competition intensifies, how will African countries balance their relations with these two world powers?