The Competition for Africa (Opinion)

In 2010 I had the opportunity to spend a month in Tanzania while on two business projects. These were my first visits to any African nation, and I experienced many interesting things there.

Because this is not a travelogue, I will spare you the usual stories about the physical beauty, grinding poverty next to unbelievable wealth and the affirming spirit of Tanzania and her people.

I can pass on observations and opinions about some of the business issues I experienced in Tanzania, notably my new appreciation for the high-stakes game being played out between China and the U.S. for capturing the hearts, minds and wallets of Tanzania (and, by extension, all of Africa and the developing world).

We read on the pages of our newspapers, magazines and webzines of the disputes between the U.S. and China over trade policy and currency actions. I know these macroeconomic issues are important, but unless you are directly involved as a company selling to China or competing against Chinese companies, it is hard to get a layman’s grasp on what is at stake or what game is being played by both players.

Then you go to Tanzania, and the observant person can grasp the essence of the superpower competition clearly. Both America and China are projecting their influence, but in very different ways. As recently as 2004, American business investment in Tanzania was double that of China’s. In 2010, that does not appear to be the case.

America provides a significant portion of its investment through humanitarian organizations, consulting services, good governance and education. American faith-based organizations are prominent in everyday life, government consultants walk the halls of power, and U.S. food and medicine improve the lives of city dweller and villager alike. American influence is increasing there. We are clearly going after the hearts of the Tanzanians.

China is building high-rises, roads, bridges, dams and the new international terminal of the airport in Dar es Salaam, Tanzania’s largest city. Chinese construction cranes are everywhere, and China does not attach strings to its investments. The Chinese are successful in bidding and winning projects, and the occasional accusation of improper pricing or local bribery does not deter them. They are going after the pocketbooks of the Tanzanians.

Consider that forecasts for world economic growth in the next 10 years are tied to growing economies in the less-developed countries. The main driver of this opportunity for growth is the formation of a “middle class” in these countries. You can see evidence of this in Tanzania in the presence of Western-style shopping malls and a variety of consumer choices in products like electronics, automobiles, fashion, food and entertainment. The Chinese strategy of large infrastructure investment, providing jobs for the local population and opening up trade for Chinese consumer products makes sense. So does the American strategy of stable government and a healthy population, giving the people a chance to create personal wealth and buy American products and services.

I know larger questions are being debated. Can China continue to invest at such a feverish clip? Will the yuan crash under artificial props? Is the Chinese economy headed toward a period of hyper-inflation?

On the streets of Dar es Salaam, however, a different set of questions is being asked: Whom do I trust? Whose political model do I admire? Who is the best bet for the Tanzanian future?

I said at the beginning of this column that I was witness to a battle for the hearts, wallets and minds of the Tanzanian people playing out in real time. One side seems to be going for the heart, the other the wallet. The question is: Which of these two will the minds of the Tanzanian people turn to? 

Steve Mosley is CEO of Upper Right Leadership of Little Rock. E-mail him at [email protected]