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China in Africa: The Real Story

Is US FDI to Africa more transparent than China's?

Deborah Brautigam

Guess which country, the United States or China, refused to release official data on its firms' investments in resource-rich Libya, Chad, Gabon, Guinea, Mozambique, Uganda and Zimbabwe in 2010?

If you guessed China, you'd be wrong. Yes, it was the U.S.

I have long made the point that the Chinese data on foreign direct investment (FDI) to Africa does not reflect the reality. Yes, official data is openly published (unlike aid, which remains very secretive). And yes, since 2002, the Chinese Ministry of Commerce has reported outward FDI using the standard OECD/IMF definitions of FDI. Yet because of exchange controls, and because so much FDI goes through tax havens (like Hong Kong, the British Virgin Islands, and the Cayman Islands) it is nearly impossible to track the ultimate
destination.

I always assumed that the US was a lot better in this regard. I was wrong. At least as posted on the website of the OECD's statistics bureau, the US claimed that 2010 FDI data by US companies in twelve African countries (almost all resource-rich) was "confidential". What's more, in 2010 the second most popular destination for US FDI flows to Africa was ... Mauritius (a tax haven) where US firms sent $1860 million.

Surely we can do better than this!