{"id":344679,"date":"2025-12-12T16:10:07","date_gmt":"2025-12-12T16:10:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/344679\/"},"modified":"2025-12-12T16:10:07","modified_gmt":"2025-12-12T16:10:07","slug":"africa-at-the-center-of-us-china-resource-race-dw-12-12-2025","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/344679\/","title":{"rendered":"Africa at the center of US\u2013China resource race \u2013 DW \u2013 12\/12\/2025"},"content":{"rendered":"

\u00ad”America first”\u2014that is the first impression that stands out from the data on so-called foreign direct investment (FDI) in Africa. Since 2012, China<\/a> had consistently\u00a0been ahead, investing continuously, while US<\/a> companies in some years even withdrew more capital than they transferred to Africa. The figures for 2023 paint a different picture: US companies invested just under $8 billion (\u20ac6.8 billion) in Africa, almost twice as much as their\u00a0Chinese competitors.<\/a><\/p>\n

The dataset published in May by the China Africa Research Initiative (CARI) at Johns Hopkins University does not yet reflect the subsequent development of the situation. This is because national governments and the UN Conference on Trade and Development (UNCTAD)\u00a0need time to evaluate the statistics and make valid assessments.\u00a0<\/p>\n

Unadjusted figures on foreign direct investment can be quite treacherous: in the current UNCTAD report, the Netherlands emerges as the largest investor in Africa.<\/p>\n

As a so-called “conduit” or transit country, the Netherlands often finds itself at the center of a complex financial network, with capital originating from other countries.<\/p>\n

Analysts worldwide are likely to be eagerly awaiting the new figures. This is because economic rivalry between the US and China<\/a> is intensifying, and there have been several recent examples of potentially significant investments in Africa.\u00a0<\/p>\n

America invests for profit, China invests strategically<\/p>\n

Has the US really “overtaken” China as the largest investor in Africa, as recent media reports have claimed?<\/p>\n

“Even if you look at the chart, you notice the fluctuations. It’s like spasms,\u00a0says James Shikwati, founder and director of the Inter Region Economic Network (IREN) in Kenya’s capital, Nairobi.<\/p>\n

China, US and EU all want to do business in Africa<\/p>\n

To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video<\/a><\/p>\n

“America shoots up and then disappears, shoots up and disappears. That\u00a0is purely because it’s a private, profit-minded approach. These are private companies and they’re not giving money just for charity,” Shikwati told\u00a0DW.<\/p>\n

In contrast, Chinese direct investment is ultimately backed by the government, which pursues long-term strategic goals.<\/p>\n

According to Shikwati, American companies rely on well-trained workers who can turn their investments into profits. “And therefore, Africa gains from the highly trained Africans who are looking for jobs. And then, for the Chinese side, the average construction work, which is mostly hands-on skills, they cater to that kind of population. So, I would say both sides, Africa wins.”<\/p>\n

However, Africa has so far failed to reap sufficient benefits from its wealth of critical raw materials<\/a>: these are often exported unprocessed, with the actual value creation occurring\u00a0in other regions of the world.<\/p>\n

\"Zimbabwe has one of the world’s largest lithium deposits and China is bringing in capital and infrastructure to exploit themImage: Tsvangirayi Mukwazhi\/AP Photo\/picture alliance<\/p>\n

Just under a year ago, the African Union (AU)<\/a>\u00a0presented its “Green Commodities Strategy,” which provides for export tariffs of 10%. The aim is to give countries a share of the actual value of their mineral resources or to encourage investors to process them directly in Africa.<\/p>\n

The continent accounts for the majority of the world’s production of platinum, cobalt, tantalum, and manganese. The mining sector is traditionally an industry with\u00a0particularly high foreign direct investment.<\/a><\/p>\n

Western companies have scaled back their activities, especially in politically sensitive mining countries. At the same time, China has become indispensable in many places through sustained investment.\u00a0<\/p>\n

China invests billions in Africa’s mining industry<\/p>\n

“Experience in Africa shows that China is not afraid of political or economic instability,”\u00a0Jimmy Munguriek, lawyer and country director of the NGO Resource Matters in the DR Congo, told DW. “China is investing, and that is why many mining sectors in Africa, especially in the Democratic Republic of Congo<\/a>, are now largely controlled by Chinese companies.”<\/p>\n

In 2023 alone, China invested nearly $8 billion in Africa, according to figures from the US think tank Brookings Institution, including lithium projects in Zimbabwe<\/a> and Mali<\/a>.<\/p>\n

\"MinersIn eastern Congo, there are large open-pit coltan mines, which the US considers of strategic importanceImage: Moses Sawasawa\/AP Photo\/picture alliance<\/p>\n

However, these individual investments can be compared with CARI’s FDI flows only to a limited extent, as these flows reflect the balance of all capital movements by foreign investors. According to the data, particularly high individual investments were made in copper projects in Botswana and the Democratic Republic of Congo.<\/p>\n

Trump’s pivot from aid to trade with African countries<\/p>\n

There are growing signs that the US is adopting a more strategic, rather than purely profit-oriented, approach to Africa’s raw material resources.<\/p>\n

In 2019, during\u00a0Donald Trump’s<\/a> first term as US president, the US International Development Finance Corporation (DFC) was created, a government agency that merged the previously separate areas of private investment and development loans.<\/p>\n

The DFC website<\/a> bluntly states that the aim is to promote US interests, “expanding US global leadership and countering China’s presence in strategic regions.”<\/p>\n

At the start of his second term in office this spring, Trump halted numerous development aid projects and withdrew substantial funding<\/a> from the development\u00a0agency, USAID.<\/p>\n

“We’re shifting from aid to trade,”\u00a0Trump told several African heads of state at the White House this summer.\u00a0“There’s great economic potential in Africa, like few other places. In many ways, in the long run, this will be far more effective and sustainable and beneficial than anything else that we can be doing together.”<\/p>\n

\"TheSince 2017, a railway line built by China has connected Kenya’s capital, Nairobi, with the port city of MombasaImage: Dong Jianghui\/Xinhua\/picture alliance<\/p>\n

In the same appearance, Trump vowed that the US would treat Africa “far better than China or anyone else.”<\/p>\n

As patron of the fragile peace agreement between the DR Congo and Rwanda<\/a>, Trump has promised the US economy preferential access to Congolese raw materials. But despite the signing of the peace deal, more than 400 civilians have been killed following the recent surge of fighting as the Rwanda-backed M23 rebel group continues its offensive in South Kivu province in eastern Congo.<\/p>\n

Battle of mega infrastructure projects<\/p>\n

China’s current strength in the field of critical raw materials is also linked to the Belt and Road Initiative (BRI<\/a>), a global infrastructure project comprising ports, roads, and railways, which, in some places, has opened transport routes for raw materials for the first time.<\/p>\n

“They are tending to look at cross-country infrastructure strategies,” economist Shikwati said. “So even if they put a standard gauge railway in Kenya, their aim is not to really make it reach Nairobi, and say, thank you, congratulations. They want to take it to Congo. They want to take it to Sudan. They want to take it to the west coast of Africa.”<\/p>\n

In the final weeks of his term in office, former US President\u00a0Joe Biden put funding for the Lobito Corridor on track,<\/a> a project that can certainly compete with individual measures of the BRI: roads and railways connect Congo’s copper belt with Angola’s Atlantic coast.<\/p>\n

The European Union(EU)<\/a>\u00a0is also supporting infrastructure projects in the Lobito Corridor under its Global Gateway initiative. Angola has become a key partner for Europe, as underscored\u00a0by the recent summit of EU and AU leaders in Luanda<\/a>.\u00a0<\/p>\n

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