Foreign Investment

The ban was enacted due to growing national security concerns related to China. Critics say there are more effective ways to protect U.S. data privacy.

The United States and other Western countries are reevaluating their foreign investment regulations amid an uptick in Chinese interest in strategic sectors.

Existing tools might be sufficient, and it's not clear if a new regime makes sense.

The key to its success will be dodging zero-sum choices between the two superpowers.

With President Trump taking aim at existing trade agreements, countries are increasingly grappling with dispute resolution mechanisms and their implications for global trading rules.

In Nigeria, intruders stabbed the managing director of Maersk Nigeria, Gildas Tohouo, and his wife, Bernadette, following a December 8 holiday party at their home. She was killed on the spot while he remains in the equivalent of intensive care. They have three small children, all of whom have been accounted for and are being cared for, according to Maersk. The Lagos media is reporting that the intruders also forced one of the two to drink a liquid suspected to be acid. The Lagos state police have arrested two suspects. They are stating that one of the perpetrators was an electrician known to Tohouo and his wife, who admitted the other suspect to the residence during the course of a power failure.  Tohouo is Cameroonian. Nigerian media variously reports his wife as Hungarian or Bulgarian. Maersk is a major shipping line, based in Denmark. The motive appears to have been theft. There is often an uptick in violent crime in Nigeria during the holiday season when expenses are high. The brutal murders are a nightmare for expatriates and have unsettled the Lagos “establishment.” It occurred during a period of strikes by electric power workers that reportedly shut down the national grid. (The strikes have since ended.) Economically, the times are bad, and the closing of the country’s borders may have made things worse. There is also concern about apparent assaults by government agencies, especially the State Security Service, on the rule of law and freedom of the media. More generally, there is the perception that President Buhari is either returning to what are seen as his authoritarian roots or alternatively that he is largely missing in action, earning his nickname "Baba go-slow." There are also whispers (as there always are) that Vice President Osinbajo, who enjoys the confidence of the business community, has been marginalized by the “cabal” around the president.

This is a guest blog post by Anthony Carroll. Anthony is founding director of Acorus Capital, a private equity fund investing in Africa, and a vice president of Manchester Trade Limited, an international business advisory firm. He has over forty years of experience working with Africa and is an adjunct professor at Johns Hopkins School of Advanced International Studies. Last week, President Cyril Ramaphosa announced on national television the selection of South Africa’s new cabinet. This announcement quickly followed his inauguration to become president after Ramaphosa’s African National Congress (ANC) secured 57.5 percent of the vote in the national elections of May 8, the fifth since the end of Apartheid in 1994. Since the elections there had been much speculation as to the size and content of President Ramaphosa’s cabinet. During his predecessor Jacob Zuma’s presidency, cabinet members were often chosen on the basis of their closeness to Zuma and were his praise singers within the ANC. Also, with thirty-six departments, each with a minister and deputy ministers, there was jurisdictional overlap which detracted attention from substantive tasks and the departments often served as their own magnets for corruption. In order to create more coherence, President Ramaphosa reduced the number of cabinet ministers to twenty-eight. The selection process was a delicate one involving ANC party leadership and Ramaphosa’s executive team, with certain concessions having to be made to the ANC’s old guard, including some Zuma acolytes. However, Ramaphosa’s choices were largely merit-based, broadly representative (50 percent are women) and in harmony with his “New Dawn” initiative of expanding economic opportunity for all South Africans through economic growth rather than redistribution. This is a cabinet in his own likeness and being! It should be noted that the cabinet of President Mbeki also was filled with competent executives who were able to achieve the highest economic growth rates and job creation in the past twenty-five years. The Zuma presidency was a costly detour. Although there was no surprise to see the names of such competent officials as Pravin Gordhan, Ephraim Patel, Naledi Pandor, Lindiwe Sisulu, and Tito Mboweni, Ramaphosa’s selection of Patricia de Lille as minister of public works and enterprises really “put the cat among the pigeons.” De Lille won high marks as an anti-apartheid activist in the Western Cape as a leader of the strident Pan Africanist Congress (PAC). She later departed the PAC and formed the Independent Democrats and eventually merged that into the Democratic Alliance. She was elected mayor of Cape Town in 2011 where she gained high marks for her courage and executive leadership. She was a tireless critic of President Mbeki’s HIV/AIDS denialism and the massive corruption of the Zuma presidency. Despite being the most popular politician in the Western Cape, she was pummeled by DA leadership over allegations of favoritism and inflexibility. After a long but successful battle to clear her name, last year she resigned as mayor, quit the DA party and formed GOOD, a new political party that received 3 percent of the Western Cape provincial vote in the May elections.  De Lille’s selection has many promising aspects. First, she is fearless and has little tolerance for incompetence or corruption. Second, she has executive experience that she will bring to bear in addressing the acute needs for infrastructure development in South Africa. These needs include modernizing ports, airports, roads, and rails to improve South Africa’s ability to grow its economy and in so doing deftly navigate the pitfalls inherent in the country’s federal system. She can also address the woeful status of local and provincial governments to provide the most basic of infrastructure for its citizenry. For example, she could tackle the problem of housing shortages in South Africa’s burgeoning cities and in so doing ameliorate some of the polemics around land redistribution, the “Third Rail” of South African politics.  Last, her appointment provides an opportunity for the U.S. to pivot and develop a more coherent and fulsome political and economic relationship with South Africa. The passage of the BUILD Act will see the creation of a new development finance agency by the US government with $60 billion to finance projects that benefit both the U.S. and South African private sectors. Indeed, South Africa’s sophisticated banking and financial services institutions could provide a solid basis to explore opportunities for financial leveraging that could create mutual benefits. Let’s get the ball rolling.

At a rugby stadium in Pretoria on May 25, Cyril Ramaphosa was sworn in as South Africa’s fourth democratically elected president since 1994. Citing government austerity measures and perhaps as a sign of the administration’s new dispensation, Ramaphosa’s inauguration will cost about half as much as the 2014 ceremony to swear in Jacob Zuma.  The U.S. presidential delegation to the inauguration was headed by Kimberly A. Reed, the president of the Export-Import Bank. The other members of the delegation included Bonnie Glick, deputy administrator of the U.S. Agency for International Development, Andrew Olmem, deputy assistant to the president for economic policy, Jessica Lapenn, the charge d’affaires at the U.S. embassy in Pretoria, and Cyril Sartor, the senior director for African affairs at the National Security Council.  More than two years into the Trump administration, there is still no U.S. ambassador to South Africa. Hence, the embassy is headed by a charge. According to the White House statement, no member of Congress was included in the delegation, nor were any business people. In the past, the presidential delegation to South African inaugurations have included prominent figures, such as First Lady Hillary Clinton in 1994 and Attorney General Janet Reno in 1999, though no delegation was sent to the discredited Jacob Zuma’s inauguration in 2014.  But this year’s presidential delegation was workman-like. All of its members would be directly involved in building the U.S.-South Africa bilateral relationship. There also may have been a trade and investment tilt to the delegation. If so, that would be appropriate. Attracting foreign investments had been one of Ramaphosa’s principal goals since he became president in early 2018. Even if the political and security dimensions of the bilateral relationship over the past decade have been frosty, the economic relationship has continued to develop. 

China’s industrial policy is aimed at rapidly expanding its high-tech sectors and developing its advanced manufacturing base, but President Trump and other leaders of industrial democracies see the plan as a threat.

While solar panels, electric buses, and wind turbines emerge, fossil fuel usage and demand for commodities continue to degrade Latin America’s environment.

Michael Clyne is political partner of the Truman National Security Project. The Trump Administration’s recent announcement of its Africa strategy offers renewed opportunities for the development of closer economic ties between the United States and Africa. In a December speech, National Security Adviser John Bolton outlined a set of business-driven initiatives, which he called “Prosper Africa.” President Barak Obama also favored a business-first trajectory for Africa over the bilateral development assistance policies generally championed before him. Though repositioned under the “Make American Great Again” banner, President Trump’s Africa strategy continues to push the business case of developing African markets.  The principal difference is a much greater emphasis on competition with China’s economic activity on the continent. The rise in Chinese interest and foreign direct investment (FDI) in Africa was punctuated by China surpassing the United States and becoming the continent’s largest trading partner in 2009 [PDF]. Throughout its rise, China has faced criticism that its projects strain public debt, import foreign labor, and exploit national workers, which Bolton described as “predatory.” Recent multilateral investment mechanisms, like its Africa Growing Together Fund, have also introduced China as a development financer, similar to the China-developed Asian Infrastructure Investment Bank. To this end, the Trump Administration has introduced a more modern U.S. investment institution for the continent in the Development Finance Institution, intended to replace the Overseas Private Investment Corporation. Globally, international business is already viewing Africa as the world’s largest emerging market, and in 2011, the value of FDI to sub-Saharan Africa surpassed [PDF] bilateral development assistance. By 2020, African consumers are forecast to contribute five times more to economic growth than the natural resource sector, a sign that the continent is beginning to overcome the “resource curse,” wherein growth was often tied to fluctuations in the price of commodities. Hence, as President Trump has observed, there are significant opportunities for American businesses in Africa’s emerging markets.  Improved U.S.-Africa commercial relations could also advance the administration’s diplomatic goals, including reforming multilateral peacekeeping operations, namely UN missions which the Trump administration believes lack accountability. Furthermore, Africa, where half of UN peacekeeping missions are based, represents one-quarter of votes in the UN General Assembly (UNGA). For the Trump administration intent on aligning member states with its UNGA voting interests, improved U.S.-Africa relations could help tilt the body’s balance. As Rosa Whitaker, former assistant U.S. trade representative for Africa, observed, the continent is the “global swing vote” of the twenty-first century. Hence, the Trump administration’s outline emphasizing the economic underpinnings of the U.S.-Africa relationship is to be welcomed, provided that initiatives like Prosper Africa lead to concrete policy and are properly resourced. In turn, it is to be hoped that American business will take advantage of African opportunities with the administration’s support.