SUB-SAHARAN 

AFRICA

Case Studies of U.S 

and Chinese 

Economic 

Engagement in 

Angola, Ghana, and 

Kenya; a Supplement 

to GAO-13-199

Report to Congressional Requesters

February 2013

GAO-13-280SP

United States Government Accountability Office

GAO
Page i GAO-13-280SP Sub-Saharan Africa Supplement 

Letter 1 

Case Study of U.S. and Chinese Economic Engagement in Angola 3

Case Study of U.S. and Chinese Economic Engagement in Ghana 19

Case Study of U.S. and Chinese Engagement in Kenya 37

Appendix I GAO Contact and Staff Acknowledgments 54

Tables

Table 1: Chinese Credit Lines to Angola since 2002 13

Table 2: U.S., Chinese, and Other Firms’ Participation in MCC 

Contracts for Ghana, 2007-2012 23

Table 3: China’s Grant Commitments to Ghana, 2006-2011 30

Table 4: China’s Loans Committed to Ghana, 2006-2011 32

Table 5: China’s Grants Committed to Kenya, July 2009–June 2012 49

Table 6: China’s Loans for Projects in Kenya, July 2009–June 2012 51

Figures

Figure 1: U.S. and Chinese Total Trade in Goods with Angola, 

Including Crude Oil Imports, 2001-2011 4

Figure 2: U.S. Imports of Goods under AGOA from Angola, 2004-

2011 5

Figure 3: U.S. and Chinese Exports of Goods to Angola, 2001-2011 6

Figure 4: World Bank-Financed Contracts Won by Firms from the 

United States, China, and Other Countries in Angola, 2001-

2011 8

Figure 5: Nationality of Firms Competing for Eight Angolan 

Government Contracts for Goods and Services, 2002- 2012 9

Figure 6: U.S. Development Assistance Committed to Angola, 2001-

2010 11

Contents 
Page ii GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 7: U.S. Government Loans and Related Financing 

Committed for U.S.-Made Products and U.S. Firms’ 

Investments in Angola, 2001-2011 12

Figure 8: Examples of Construction Projects Implemented by 

Chinese Firms in Angola 15

Figure 9: Reported Flows of Foreign Direct Investment from the 

United States and China to Angola, 2007-2011 17

Figure 10: Numbers and Types of U.S. and Chinese Firms’ 

Investments in Oil Blocks in Angola as of September 2012 18

Figure 11: U.S. and Chinese Total Trade in Goods with Ghana, 

2001-2011 19

Figure 12: U.S. and Chinese Exports of Goods to Ghana, 2001-2011 20

Figure 13: U.S. and Chinese Imports of Goods from Ghana, 2001-

2011 21

Figure 14: U.S. Imports of Goods under AGOA from Ghana, 2001-

2011 22

Figure 15: Photos of MCC-Funded N1 Highway and Signage in 

Ghana 25

Figure 16: World Bank–Financed Contracts Won by Firms from the 

United States, China, and Other Countries in Ghana, 2001-

2011 26

Figure 17: Nationality of Firms Competing for 11 Ghanaian 

Government Contracts for Goods and Services, 2002-2012 27

Figure 18: U.S. Development Assistance Committed to Ghana, 

2001-2010 29

Figure 19: U.S. Government Loans and Related Financing 

Committed for U.S-Made Products and U.S. Firms’ 

Investments in Ghana, 2001-2011 31

Figure 20: Reported Flows of Foreign Direct Investment from the 

United States and China to Ghana, 2007-2011 35

Figure 21: Numbers and Types of U.S. and Chinese Firms’ 

Investments in Oil Blocks in Ghana, August 2012 36

Figure 22: U.S. and Chinese Total Trade in Goods with Kenya, 2001-

2011 37

Figure 23: U.S. and Chinese Exports of Goods to Kenya, 2001- 2011 38

Figure 24: U.S. and Chinese Imports of Goods from Kenya, 2001-

2011 39

Figure 25: U.S. Imports of Goods from Kenya under AGOA, 2001-

2011 40

Figure 26: World Bank–Funded Contracts Won by Firms from the 

United States, China, and Other Countries in Kenya, 2001-

2011 44
Page iii GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 27: Photos of Newly Built Road and Signage for Chinese 

Contractor That Built Road Section in Nairobi, Kenya 45

Figure 28: Nationality of Firms Competing for 28 Kenyan 

Government Contracts for Goods and Services, 2002–2012 46

Figure 29: U.S. Development Assistance Committed to Kenya, 2001-

2010 48

Figure 30: U.S. Government Loans and Related Financing 

Committed for U.S.-made Products and U.S. Firms’ 

Investments in Kenya, 2001-2011 50

Figure 31: Reported Flows of Foreign Direct Investment from the 

United States and China to Kenya, 2007-2011 53

Abbreviations

AGOA African Growth and Opportunity Act

BEA Bureau of Economic Analysis

Commerce Department of Commerce

GSP Generalized System of Preferences

IMF International Monetary Fund

MCC Millennium Challenge Corporation

NGO nongovernmental organization

OECD Organization for Economic Cooperation and Development

OPIC Overseas Private Investment Corporation

UN United Nations

USAID U.S. Agency for International Development

U.S. Ex-Im Export-Import Bank of the United States

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necessary if you wish to reproduce this material separately.
Page 1 GAO-13-280SP Sub-Saharan Africa Supplement 

United States Government Accountability Office 

Washington, DC 20548

February 7, 2013

The Honorable James M. Inhofe

United States Senate

The Honorable Jack Kingston

House of Representatives

This supplemental report is a companion to Sub-Saharan Africa: Trends 

in U.S. and Chinese Economic Engagement (GAO-13-199).1 This 

supplement presents the results of our case studies of U.S. and Chinese 

economic engagement in three sub-Saharan African countries— Angola, 

Ghana, and Kenya.2

GAO-13-199

We conducted these case studies to compare the 

United States’ and China’s trade, grants and loans, and investment 

activities in sub-Saharan Africa. For contextual information about the 

three countries and additional information on U.S. and Chinese 

engagement in sub-Saharan Africa broadly, see . 

We selected the three countries on the basis of our assessment of the 

levels, types, and intersection of the United States’ and China’s 

engagement in trade, grants and loans, and investment activity in each 

country; the three countries’ geographic diversity; and input from U.S. 

government officials and relevant experts. The case studies are meant to 

be illustrative and are not generalizable. We conducted work in 

Washington, D.C., and in Angola, Ghana, and Kenya, including meetings 

with officials from U.S. agencies, host-government ministries, U.S. 

businesses, other donors, and nongovernmental organizations (NGO). 

We were unable to meet with Chinese government officials, despite our 

requests, in Africa or Washington, D.C. We have noted data limitations as 

 

1

This supplemental report was prepared in conjunction with GAO-13-199, in response to a 

request from Representative Jack Kingston and Senator James Inhofe—then Ranking 

Member, Senate Foreign Relations Subcommittee on East Asian and Pacific Affairs—to 

review U.S. and Chinese engagement in sub-Saharan Africa. 

2

We generally report data from 2001 through 2010 or 2011, but used data for shorter 

periods in some cases due to data availability. For comparability, and given challenges in 

determining appropriate deflators for some data, we used nominal rather than inflationadjusted values for data on trade, grants and loans, and investments. All information 

sources reported nominal data in U.S. dollars. All of the data we report are for calendar 

years, except where noted otherwise. All percentages noted in this document are rounded 

to the nearest number.

 
 

Page 2 GAO-13-280SP Sub-Saharan Africa Supplement 

appropriate, such as lack of available data on China’s grants and loans 

and likely underreporting of its investment data. Overall, we determined 

that the data presented in these case studies are generally reliable for the 

purposes for which the data are used. For a more detailed discussion of 

our scope and methodology, see GAO-13-199. We conducted this work 

from November 2011 to February 2013 in accordance with generally 

accepted government auditing standards.

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3149 or gootnickd@gao.gov. Contact points for 

our Offices of Public Affairs and Congressional Relations may be found 

on the last page of this report. GAO staff who made key contributions to 

this report are listed in appendix I.

David B. Gootnick,

Director, International Affairs and Trade
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 3 GAO-13-280SP Sub-Saharan Africa Supplement 

U.S. and Chinese trade in goods with Angola has risen dramatically, 

dominated by oil imports, with China’s trade surpassing the United 

States’.1 From 2001 through 2011, China’s and the United States’ total 

trade with Angola rose rapidly, reflecting a similarly rapid increase in 

imports of crude oil; China’s total trade surpassed the United States’ in 

2008, and China’s imports of crude oil exceeded the United States’ in 

2004 and in 2007 through 2011 (see fig. 1). Imports accounted for 90 

percent of the United States’ total trade with Angola, and crude oil made 

up 96 percent of those imports. Imports represented 90 percent of 

China’s total trade, and almost all of its imports were crude oil.2

 

1

According to the U.S. Department of Energy, Angola has been a large oil producer for 

decades and is a member of the Organization of Petroleum Exporting Countries.

2

In addition to importing crude oil, both countries have imported diamonds since 2003; in 

2011, the United States imported $169 million in diamonds and China imported $99 million 

in diamonds. The United States also imported $510 million in noncrude oil (which includes 

refined oil) in 2011, whereas China imported none. As in 2011, crude and noncrude oil 

were the top imports for the United States and crude oil was the top import for China in 

2001. 

Case Study of U.S. and Chinese Economic 

Engagement in Angola

U.S. and Chinese 

Trade with Angola

China’s Total Trade in 

Goods in Angola 

Surpassed U.S. Trade in 

2008, and Oil Imports 

Dominated Both
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 4 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 1: U.S. and Chinese Total Trade in Goods with Angola, Including Crude Oil Imports, 2001-2011

Notes: Total trade is defined as imports plus exports. Trade data are reported in nominal values. 

Changes in value over time are due in part to changes in the prices of traded goods, such as 

substantial increases in the price of oil. 

Almost all of U.S. imports from Angola enter the United States without 

tariffs. Since 2004, after Angola became eligible as a beneficiary of the 

African Growth and Opportunity Act (AGOA), the U.S. trade-preference 

program, 52 percent of total U.S. imports, including 53 percent of U.S. oil 

imports, from Angola have been tariff free under the program’s terms. In 

addition, since 2001, 42 percent of total U.S. imports from Angola, 

including 43 percent of U.S. oil imports from Angola, have been tariff free 

under the Generalized System of Preferences (GSP). All imports from 

Angola under AGOA have consisted of oil, primarily crude oil. Figure 2 

shows U.S. imports under AGOA from Angola from 2004 through 2011.
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 5 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 2: U.S. Imports of Goods under AGOA from Angola, 2004-2011

Notes: All U.S. imports under AGOA from Angola during this period consisted of oil. Angola became 

eligible to export goods under AGOA in 2004. Data are shown in nominal values. 

Almost all Chinese imports from least developed countries, which include 

Angola, enter China without tariffs. In 2003, China announced that some 

commodities from least developed countries in Africa, which includes 

Angola, would be given duty-free status. By 2007, according to a report 

by the World Trade Organization that cited Chinese officials, 98 percent 

of the total value of Chinese imports from least developed countries, 

which include Angola, entered China tariff free.

Like its imports, China’s exports to Angola exceed U.S. exports. In 2011, 

China exported just under $2.8 billion in goods to Angola, while the 

United States exported less than $1.5 billion. Although China exported 

relatively few goods to Angola in 2001, its exports rapidly increased and 

surpassed those of the United States in 2008. In 2011, top Chinese 

exports included manufactured goods (e.g., cement, iron and steel rails) 

and machinery and transport equipment (e.g., electric generators and 

motorcycles). Top U.S. exports to Angola included machinery and 

transport equipment such as civil-engineering equipment, and food such 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 6 GAO-13-280SP Sub-Saharan Africa Supplement 

as frozen poultry products. Figure 3 shows the trends and composition of 

U.S. and Chinese exports to Angola from 2001 through 2011.

Figure 3: U.S. and Chinese Exports of Goods to Angola, 2001-2011

Note: Export data are reported in nominal dollars. 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 7 GAO-13-280SP Sub-Saharan Africa Supplement 

From 2006 through 2011, total U.S. trade in services with Angola 

averaged about $2.2 billion annually, with U.S. imports of services 

averaging about $411 million and U.S. exports of services averaging 

about $1.8 billion.3 For U.S. trade in services with Angola, the largest 

sectors for U.S. imports were transportation services and travel and 

passenger fares, and the largest sector for exports was business, 

professional, and technical services.4 No comparable data are available 

for China’s trade in services with Angola, in part because China does not 

publish country-specific information on its trade in services.

U.S. and Chinese firms largely have not competed in similar sectors in 

Angola for donor-funded and host-government contracts, including 

contracts for provision of goods and services. According to data on World 

Bank-financed contracts in Angola for which U.S. and Chinese firms won 

contracts between 2001 and 2011, Chinese firms won fewer contracts but 

a larger share of contract dollars than U.S. firms and were active in 

providing construction services.5

 

3

To calculate estimates of total trade in services, including imports and exports of 

services, we used the higher value when ranges of estimates were provided for sectors of 

services such as business, professional, and technical services. Therefore, the averages 

we report represent the higher end of values in underlying tabulations from the Bureau of 

Economic Analysis (BEA) and other sources and our analysis of BEA’s survey data.

U.S. firms won a smaller share of 

contract dollars and were primarily active in consulting services, such as 

management and technical advice, and legal advisory services. Figure 4 

shows World Bank contracts in Angola that firms from the United States, 

China, and other countries won in 2001 through 2011.

4

From 2006 through 2011, annual U.S. imports averaged $212 million for transportation 

services and $98 million for travel and passenger fares. From 2009 through 2011 annual 

U.S. exports averaged approximately $1 billion to $1.5 billion annually for business, 

professional, and technical services.

5

Services provided by U.S. firms under World Bank–funded contracts represent a small 

fraction (less than 1 percent) of annual U.S. trade in service exports to Angola. However, 

World Bank contracts represent one of the few instances where data are available for 

examination of potential competition between U.S. and Chinese firms. According to the 

World Bank, the data include only contracts reviewed by World Bank staff prior to award, 

which constitute about 40 percent of total World Bank investment lending. The nationality 

of a firm reflects the country where it is registered, although the firm’s parent may be 

headquartered in another country.

U.S. Trade in Services with 

Angola Is Estimated at 

About $2.4 Billion per Year, 

but No Comparable Data 

Are Available for China’s 

Trade in Services

U.S. Firms Generally Have 

Not Competed with 

Chinese Firms on World 

Bank–Financed and HostGovernment Contracts
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 8 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 4: World Bank-Financed Contracts Won by Firms from the United States, China, and Other Countries in Angola, 2001-

2011

Notes: According to the World Bank, the data shown include only contracts reviewed by World Bank 

staff prior to award. In general, these types of contracts constitute about 40 percent of total World 

Bank investment lending. The nationality of a firm reflects the country in which it is registered, 

although the firm’s parent may be headquartered in another country. 

a

Firms from at least 26 other countries won World Bank contracts, with Angolan and Portuguese firms 

winning the most contracts. 

b

Other contracts were primarily for goods such as transportation equipment, information technology 

equipment, and educational equipment. 

Department of Commerce (Commerce) data on U.S. firms bidding on 

host-government contracts provide some evidence that U.S. firms 

primarily competed with European firms for these contracts. From August 

2002 to February 2012, U.S. firms requested assistance from 

Commerce’s Advocacy Center in competing for eight Angolan 

government contracts for goods and services. French, British, and Italian 

firms competed with U.S. firms for more of these contracts and in more 

sectors—primarily the oil and gas sector and the energy and power 

sector—than did Chinese firms (see fig. 5). Chinese firms competed for 

only one of the contracts, for locomotives in the transportation sector.
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 9 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 5: Nationality of Firms Competing for Eight Angolan Government Contracts 

for Goods and Services, 2002- 2012

Notes: Data shown are for eight Angolan government contracts for which U.S. firms requested 

Commerce advocacy assistance in August 2002 through February 2012. Firms from the United 

Kingdom, France, and Italy competed with U.S firms for the largest numbers of contracts. 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 10 GAO-13-280SP Sub-Saharan Africa Supplement 

From 2001 to 2010, the U.S. government committed $804 million in 

grants to Angola,6 primarily for health and humanitarian assistance.7

 

6

According to USAID officials, the U.S. government committed almost all of its grants to 

organizations operating in Angola, not to the government of Angola. 

 As 

figure 6 shows, the level of U.S. government aid to Angola has varied 

over time, peaking in 2003 at about $152 million, declining until 2006 as 

humanitarian assistance was reduced sharply, and increasing again 

somewhat by 2010. The composition of U.S. aid to Angola has also 

varied over time, with humanitarian assistance constituting the bulk of 

assistance between 2002 and 2005 and health assistance generally 

increasing from 2006 to 2010. In contrast to the United States, China 

does not publish data on its grants to Angola.

7

U.S. development assistance data for 2011 were not available at the time of this report’s 

publication.

U.S. and Chinese 

Grants and Loans to 

Angola

U.S. Government 

Committed About $800 

Million in Grants to 

Angola, but Data Are Not 

Available for China’s 

Grants
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 11 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 6: U.S. Development Assistance Committed to Angola, 2001-2010

Note: Aid data are shown in nominal dollars by calendar year. 

The U.S. government committed about $711 million in loans and related 

financing, such as loan guarantees and insurance, between 2001 through 

2011 to support U.S. exports to, and U.S. firms’ investments in, Angola. 

The Export-Import Bank of the United States (U.S. Ex-Im) committed 

about $678 million—95 percent of total U.S. government loan 

commitments— primarily for U.S. aerospace products and parts. Also, 

through OPIC, the U.S. government committed about $32 million in 

financing from 2001 through 2011 to support U.S. firms’ investments in 

Angola in sectors such as credit financing, cement and concrete 

manufacturing, and grain and oilseed milling. Figure 7 shows U.S. 

government loans and related financing committed for U.S.-made 

products and U.S. firms’ investments in Angola from 2001 through 2011.

Chinese Government Loan 

Commitments to Angola 

Significantly Exceed U.S. 

Government Loan 

Commitments for Trade 

and Investment
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 12 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 7: U.S. Government Loans and Related Financing Committed for U.S.-Made 

Products and U.S. Firms’ Investments in Angola, 2001-2011

Notes: Data are shown in nominal dollars. In addition, these values are shown by calendar year, 

although U.S. Ex-Im and OPIC typically report data by fiscal year. 

a

OPIC may report data for some financing commitments, such as investment funds, only at the 

regional level. Data shown do not reflect OPIC investment funds for regional use in sub-Saharan 

Africa, possibly including Angola. According to OPIC officials, because recipients of OPIC investment 

assistance may choose to invest in a set of countries, OPIC may initially lack information such as the 

countries where investments are made. In addition, according to OPIC officials, in countries with 

limited investment activity, business confidentiality agreements may prevent the disclosure of data 

that would reveal details of individual transactions. 

As of September 2012, the Chinese government had committed an 

estimated $12 billion in credit lines to Angola since 2002 through the 

Export-Import Bank of China and the China Development Bank (see table 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 13 GAO-13-280SP Sub-Saharan Africa Supplement 

1),8 according to the Angolan Ministry of Finance and a U.S. official.9

Table 1: Chinese Credit Lines to Angola since 2002

Chinese government loans to Angola are generally guaranteed by 

Angola’s oil in case of default and are repaid through proceeds from the 

sale of oil, according to officials from the U.S. government and a donor 

agency in Angola. According to the Angolan Ministry of Finance, U.S. 

officials, and a donor agency official in Angola, Chinese government 

loans to Angola have been for infrastructure construction, such as roads, 

rail, hospitals, schools, housing, water supply, and telecommunications.

Dollars in billions

Year committed Financing committed Types of projects

2004 $2.0 Roads, rail, airports, housing, water 

supply, hospitals, schools, 

telecommunications, boats 2007 2.5 

2009 7.5 

Total $12.0

Source: GAO analysis of information from the Angolan Ministry of Finance, U.S. officials, and a donor agency official in Angola.

Note: Data shown are those available as of September 2012. 

A large number of Chinese laborers work in Angola on projects financed 

by the Chinese government and implemented by Chinese firms.10 As part 

of their loan agreement, the governments of China and Angola agreed 

that 70 percent of workers implementing construction projects would be 

Chinese and the remaining 30 percent would be Angolans, according to 

an Angolan nongovernmental organization (NGO) and reported 

statements by the former Chinese ambassador to Angola.11

 

8

A credit line represents funding available to a borrower, who incurs a loan by drawing 

funds from the credit line. Comprehensive information on disbursement of China’s credit 

lines and loans to Angola is not available. However, data published by the Angolan 

Ministry of Finance indicate that as of June 2008, about 30 percent of China’s credit lines 

of $2 billion in 2004 and $2.5 billion in 2007 had been disbursed. Additionally, according to 

a U.S. official, data from Angolan Ministry of Finance indicate that as of September 2010, 

Angola owed China about $3 billion.

However, the 

9

China’s total lending and some additional information about the loans to Angola is 

corroborated by other sources.

10 Brazilian and Portuguese firms are also constructing infrastructure in Angola, according 

to an official from an Angolan firm, an Angolan NGO, and a U.S. official.

11According to an Angolan NGO, Chinese-made materials must also constitute 70 percent 

of the materials used for these construction projects. 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 14 GAO-13-280SP Sub-Saharan Africa Supplement 

Angolan NGO and former Chinese ambassador noted that Chinese firms 

usually did not meet Angola’s requirements for local hiring; according to 

the Angolan NGO, this resulted in part from a lack of skills among 

Angolans after the country’s long civil war.12 Consequently, a large 

number of Chinese work in Angola on these projects.13

 

12Angola’s Ministry of Finance published a list of projects that were being financed by the 

Export-Import Bank of China’s credit lines as of the second quarter of 2008. This list 

includes information such as the number of Chinese and Angolan workers associated with 

projects but may not include all projects financed by the Export-Import Bank of China’s 

credit lines and does not include information on the number of Chinese and Angolan 

workers for every project. However, in contrast to statements by an Angolan NGO and the 

former Chinese ambassador, the available information for the listed projects indicated that 

36 percent of workers were Chinese and 64 percent were Angolans. 

For example, data 

published by China’s Ministry of Commerce showed that more than 

31,000 Chinese laborers were in Angola by 2009, and the former Chinese 

ambassador to Angola estimated that between 60,000 and 70,000 

Chinese were in Angola in 2011, to implement projects financed through 

the Chinese credit lines, according to a news report published in March 

2011. Figure 8 shows examples of Chinese firms’ construction projects in 

Angola.

13According to a survey of Angolan workers employed at both Western (including 

Brazilian) and Chinese construction and oil firms, workers at Chinese firms tend to be 

younger, have less work experience, work longer hours per day, be less educated, and 

earn less compared with workers at Western firms. Worker turnover is also higher at 

Chinese firms. 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 15 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 8: Examples of Construction Projects Implemented by Chinese Firms in Angola

The Chinese government’s engagement with Angola has been evolving 

since 2002. According to an expert in China-Africa relations, the Chinese 

government was one of the first foreign governments to provide relatively 

cheap financing to Angola after the country’s civil war ended in 2002. 

According to an Angolan NGO, China provided this financing without 

significant conditions and, partly as a result of this financing, has 

developed relatively close ties with the Angolan government. After the 

end of Angola’s civil war, the Angolan government emphasized rapid 

reconstruction, according to an Angolan NGO and officials from U.S. and 

Angolan firms.14 However, according to Angolan government officials, the 

government is now focused on reducing poverty and diversifying the 

economy.

 

14According to Angolan NGOs and an official from an Angolan firm, during the initial 

stages of Angola’s reconstruction, Chinese contractors received little supervision. 

Inadequate supervision contributed to low quality of Chinese construction, according to 

Angolan NGOs and donor agency officials.
Case Study of U.S. and Chinese Economic 

Engagement in Angola

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U.S. firms’ investments in Angola, largely in the oil sector, exceed 

Chinese firms’ reported investments. U.S. cumulative foreign direct 

investment flows from 2007 through 2011 were $3.4 billion,15 while 

China’s reported investment flows were about $214 million (see fig. 9). 

According to experts, data on China’s foreign direct investments are likely 

under-reported,16 and according to the Bureau of Economic Analysis 

(BEA), data on U.S. foreign direct investments may also be 

underreported,17

 

15According to the Organization for Economic Cooperation and Development (OECD), 

foreign direct investment is the ownership by a foreign person or business of 10 percent or 

more of the voting equity of a firm located in the host country. Foreign direct investment 

flows provide information for foreign direct investment activity within a given period of time, 

while foreign direct investment stock indicates the level of foreign direct investment at a 

given point in time. U.S. foreign direct investment flows during 2007 through 2011 were 

volatile, with a negative flow in 2007 and a spike in 2010.

limiting precise comparisons of the United States’ and 

China’s investments. BEA reports that in 2011, the top sector of U.S. 

foreign direct investment stock was mining, predominantly crude-oil 

extraction, and that from 2006 through 2011, one of the fastest growing 

sectors was companies related to oil-related manufacturing. Comparable 

data for China’s foreign direct investment in Angola by sector are not 

available.

16According to experts, Chinese firms set up subsidiaries, in places such as Hong Kong 

and the British Virgin Islands, that can be used to make investments in sub-Saharan 

Africa. Such investments are not captured by China’s data on foreign direct investment 

and may be a significant source of underreporting. In addition, many small and mediumsized enterprises may not register their foreign direct investments, which therefore may 

not be reflected in China’s data. According to an International Monetary Fund (IMF) 

working paper, China’s foreign direct investment data also show inconsistencies between 

investment flows and changes in investment stock that are difficult to explain (see Montfort 

Mlachila and Misa Takebe, “FDI from BRICs to LICs: Emerging Growth Driver?” IMF 

Working Paper, WP/11/178 [2011], 11). Finally, China does not define foreign direct 

investment when reporting its data. However, the types of data that China reports for its 

foreign direct investments (e.g., equity investment data, reinvested earnings data) are 

similar to data reported for U.S. foreign direct investment. Moreover, China’s reported 

foreign direct investment data represent official information published by the Chinese 

government and, despite their limitations, have been used in various reports, including 

those published by international organizations (e.g., the IMF), government agencies, 

academic experts, and other research institutions, to describe China’s foreign direct 

investment activities in Africa.

17BEA noted that these data may not include investments in Sub-Saharan Africa by U.S. 

firms through subsidiaries in locations such as the Netherlands. According to BEA, U.S. 

foreign direct investment data are based on a 2009 benchmark survey that covers the 

value of all U.S. foreign direct investment, but these data may not reflect foreign direct 

investments by smaller firms. 

U.S. and Chinese 

Investments in Angola
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 17 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 9: Reported Flows of Foreign Direct Investment from the United States and 

China to Angola, 2007-2011

Note: Data are shown in nominal values. 

Data on the purchase of ownership interests in oil blocks in Angola 

indicate that as of September 2012, U.S. firms were active in Angola’s 

petroleum sector (see fig. 10).18

 

18An oil block is a geographic area delineated by the licensing authorities for oil 

exploration and production. The licensing authority grants exploration and/or production 

rights to the oil company or joint venture within the boundaries of the block, usually on an 

exclusive basis.

No single foreign firm dominates 

Angola’s oil sector, because the Angolan government tends to distribute 

ownership stake among multiple companies. However, U.S. firms act as 

operators for 11 of 49 oil blocks and have primary responsibility for 

operations such as drilling, maintenance, and complying with required 
Case Study of U.S. and Chinese Economic 

Engagement in Angola

Page 18 GAO-13-280SP Sub-Saharan Africa Supplement 

rules and regulations.19 In addition, U.S. firms have purchased ownership 

interests in 5 oil blocks as nonoperators, generally with a minority stake 

but no responsibility for operations. Chinese firms, generally lacking the 

technology and capacity to manage offshore oil operations, have 

purchased ownership interests as nonoperators in 12 oil blocks in 

Angola.20

Figure 10: Numbers and Types of U.S. and Chinese Firms’ Investments in Oil Blocks in Angola as of September 2012

Like other nonoperators, Chinese firms’ ownership interests 

help mitigate the operator’s financial risks, given the large investments 

required in oil exploration and production operations. In addition, through 

these ownership interests, Chinese firms participate in, and learn 

management experience through, the decision-making process of oil well 

operations, according to an official from a major oil firm.

a

In addition to U.S. firms, firms from Angola, Brazil, Denmark, France, and the United Kingdom, 

among others, operate Angola’s 49 oil blocks. 

 

19An operator is generally the oil company that engages in drilling, service, and other 

operations; an operator has primary responsibility for maintaining well operations and 

ensuring compliance with required rules and regulations. A nonoperator generally has an 

ownership stake, similar to a minority and noncontrolling interest. 

20According to the U.S. Department of Energy, Chinese firms are gaining experience 

managing offshore oil operations in other sub-Saharan African countries and in Asia.
Case Study of U.S. and Chinese Economic 

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Page 19 GAO-13-280SP Sub-Saharan Africa Supplement 

Since 2003, China’s total trade in goods with Ghana has surpassed U.S. 

trade (see fig. 11). From 2001 through 2011, the United States’ total trade 

with Ghana grew by a factor of 5, from approximately $384 million to 

nearly $2 billion, while China’s total trade with Ghana grew by a factor of 

19, from approximately $182 million to nearly $3.5 billion. Exports to 

Ghana made up a significant portion of both the United States’ total trade 

(66 percent) and China’s total trade (approximately 92 percent) during 

that 11-year period.

Figure 11: U.S. and Chinese Total Trade in Goods with Ghana, 2001-2011

Notes: Total trade is defined as imports plus exports. Trade data are reported in nominal values. 

Changes in value over time are due in part to changes in the prices of traded goods. 

In 2001, the United States’ and China’s exports to Ghana were similar in 

value—approximately $179 million and nearly $146 million, respectively—

but by 2011, Chinese exports had grown more than 20-fold, to $3.1 

billion. This growth was largely due to increased exports of manufactured 

goods, such as footwear and lighting fixtures, and of chemicals such as 

Case Study of U.S. and Chinese Economic 

Engagement in Ghana

U.S. and Chinese 

Trade with Ghana

Chinese Trade in Goods 

Has Exceeded U.S. Trade 

and Grown More Rapidly
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

Page 20 GAO-13-280SP Sub-Saharan Africa Supplement 

insecticides. As figure 12 shows, the United States exported 

approximately $1.2 billion in goods to Ghana in 2011, six times its exports 

in 2001. Top U.S. exports in 2011 included machinery and transport 

equipment, mainly machinery for minerals extraction and motor vehicles, 

and mineral fuels, primarily refined oil. Figure 12 shows U.S. and Chinese 

exports to Ghana by key categories.

Figure 12: U.S. and Chinese Exports of Goods to Ghana, 2001-2011

Note: Export values are reported in nominal dollars. 

U.S. imports of goods from Ghana have exceeded Chinese imports. U.S. 

imports increased nearly fourfold from 2001 to 2011, growing from 

approximately $200 million in 2001 to $800 million in 2011 (see fig. 13). 

Since 2001, the United States has increased its imports of cocoa from 

Ghana. Ghana became an oil-producing nation at the end of 2010 after a 

U.S. company discovered oil offshore in 2007, and crude oil was the top 

U.S. import from Ghana in 2011. However, Chinese imports from Ghana 

grew more rapidly than U.S. imports in the same period, rising 10-fold, 

from almost $37 million in 2001 to more than $360 million in 2011. China 
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

Page 21 GAO-13-280SP Sub-Saharan Africa Supplement 

increased its imports of ores from 2001 to 2011 and also began importing 

crude oil in 2011.

Figure 13: U.S. and Chinese Imports of Goods from Ghana, 2001-2011

Note: Data are shown in nominal dollars. 

a

Noncrude oil includes refined oil such as gasoline and kerosene. 

Under AGOA, the U.S. trade preference program, oil constituted 95 

percent of U.S. imports from Ghana from 2001 to 2011 (see fig. 14). U.S. 

imports of oil under AGOA, mostly crude oil, grew significantly in 2011, to 

nearly $413 million, compared with approximately $288 million in imports 

of oil, all noncrude, for the prior 10 years. The United States imported 

nearly $739 million in total goods from Ghana under AGOA during that 

period, including about $36 million of textiles, apparel, leather, and 

footwear, the second largest category of AGOA imports after oil.1

 

1

From 2001 to 2011, tariffs on a combined total of nearly $906 million in U.S. imports 

(approximately 39 percent of total U.S. imports) from Ghana were eliminated under AGOA 

and GSP.

Because Ghana is not a least developed country, it does not qualify for 
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

Page 22 GAO-13-280SP Sub-Saharan Africa Supplement 

duty exemptions under China’s trade preferences for least developed 

countries.

Figure 14: U.S. Imports of Goods under AGOA from Ghana, 2001-2011

Note: Data are shown in nominal dollars. Data represented as “all other”—imports ranging from 

approximately $6,000 in 2001 to approximately $2 million in 2009—are not visible because of the 

magnitude of petroleum imports in 2011. 
Case Study of U.S. and Chinese Economic 

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From 2006 to 2011, total U.S. trade in services with Ghana averaged 

about $1.2 billion annually, with U.S. imports of services averaging about 

$644 million per year and U.S. exports of services averaging about $546 

million per year.2 The largest sector for U.S. imports of services was 

travel and passenger fares. The largest sectors for U.S. exports of 

services were business, professional, and technical services; and travel 

and passenger fares. No comparable data are available for China’s trade 

in services, in part because China does not publish country-specific 

information on its trade in services.

U.S. and Chinese firms generally have not competed in similar sectors in 

Ghana for donor-funded contracts. According to data on Millennium 

Challenge Corporation (MCC)–funded projects in Ghana for which U.S. 

and Chinese firms won contracts in 2007 through 2012, all MCC contracts 

implemented by Chinese firms were for construction projects. 

Furthermore, officials who oversaw procurement for MCC-funded 

contracts in Ghana said that U.S. firms did not bid on any MCC 

construction contracts (see table 2).

Table 2: U.S., Chinese, and Other Firms’ Participation in MCC Contracts for Ghana, 2007-2012

Contractor 

nationality

Number of 

projectsa

MCC contract dollars 

won, percent of final 

contract amounts

Contract 

amount, dollars 

in millions

Consulting 

services, 

percent of 

contract amount

Construction,

percent of 

contract amount

Goods, percent 

of contract 

amount

United States 11 6% $31.9 100% 0% 0%

China 7 22 111.7 0 100 0 

Ghana >400 37 192.2 29 54 17

Other countries >200 35 177 28 71 2 

Source: GAO analysis of Millennium Challenge Corporation data.

 

2

From 2006 through 2011, annual U.S. imports averaged between $50 million to $200 

million for business, professional, and technical services, $350 million for travel and 

passenger fares, $31 million for education services, and $3 million for transportation 

services. During the same period, annual U.S. exports averaged between $50 million and 

$200 million for business, professional, and technical services, $118 million for travel and 

passenger fares, $91 million for education services, and $22 million for transportation 

services. To calculate total trade, imports, and exports to Ghana, we used the higher 

value when ranges of estimates were provided for sectors of services such as business, 

professional, and technical services. The averages reported are the highest of possible 

values in underlying tabulations from BEA and other sources and our analysis of BEA’s 

survey data.

U.S. Trade in Services with 

Ghana Is Estimated at 

About $1.4 Billion per Year, 

but Comparable Data Are 

Not Available for China’s 

Trade in Services

U.S. and Chinese Firms’ 

Competition for DonorFunded and HostGovernment Contracts Has 

Been Limited
Case Study of U.S. and Chinese Economic 

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Page 24 GAO-13-280SP Sub-Saharan Africa Supplement 

a

Numbers of projects shown are estimates, particularly for contractors from Ghana and other 

countries, owing to the size and complexity of MCC’s procurement system. 

Implementation of MCC’s 5-year, $547 million compact with Ghana began 

in 2007, with a focus on reducing poverty through agribusiness 

development. As table 2 shows, U.S. firms won 11 MCC contracts totaling 

nearly $32 million (6 percent of the value of MCC contracts in Ghana), all 

for consulting services. Chinese firms won 7 contracts totaling 

approximately $112 million (22 percent of the value of MCC contracts in 

Ghana), nearly 40 percent of which funded construction of a section of 

the National “N1” Highway in Accra (see fig. 15).3

 

3

MCC does not favor companies by nationality in competing for contracts, and 

procurement guidelines specify open, fair, and competitive procedures consistent with 

delivering effective aid. In 2010, MCC revised its guidelines to exclude state-owned 

enterprises from competing for MCC-funded contracts to ensure level competition with 

firms that otherwise would not receive government support. At the time the regulation was 

put into effect, the success of Chinese state-owned enterprises in winning MCC contracts 

received particular attention. The regulation went into effect after a number of MCC 

contracts in Ghana were awarded, and MCC and Ghanaian government officials said it did 

not affect their work. Ghanaian firms won about $192 million in MCC contracts, 38 percent 

of the total amount of contracted work performed, more than half of which was for 

construction work. Portuguese firms won nearly $114 million in contracts, or approximately 

22 percent of the total contracted work, all of which was for construction.

Because of the higher 

values of construction contracts, Chinese firms’ contracts were larger (5 

of the 10 largest MCC contracts) than U.S. firms’ (1 of the 10 MCC largest 

contracts). The majority of Chinese-implemented MCC construction 

projects were transportation projects; the remaining projects were 

agriculture-related infrastructure, such as irrigation systems.
Case Study of U.S. and Chinese Economic 

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Figure 15: Photos of MCC-Funded N1 Highway and Signage in Ghana

Data on World Bank–funded contracts in Ghana also illustrate that U.S. 

and Chinese firms largely do not compete in similar sectors in Ghana.4

 

4

Services provided by U.S. firms under World Bank–funded contracts represent a small 

fraction (less than 1 percent) of annual U.S. trade in service exports to Ghana. However, 

World Bank contracts represent one of the few instances where data are available for 

examination of potential competition between U.S. and Chinese firms. According to the 

World Bank, the data include only contracts reviewed by World Bank staff prior to award, 

which constitute about 40 percent of total World Bank investment lending. The nationality 

of a firm reflects the country where it is registered, although the firm’s parent may be 

headquartered in another country. 

According to available data on World Bank contracts from 2001 through 

2011, U.S. and Chinese firms won nearly the same number of contracts, 

but Chinese firms won significantly more contract dollars (see fig. 16). 

Chinese and U.S. firms did not appear to overlap in competing for 

consulting and construction services contracts but overlapped in providing 

three types of goods: educational, electrical, and transportation 

equipment. Although contracts for electrical equipment made up nearly 14 

percent of the value of contracts for Chinese firms, the same category 

constituted less than 2 percent of the value of U.S. firms’ contracts. 

Contracts for educational or transportation equipment did not represent a 

significant portion of the value of contracts for which both U.S. and 
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

Page 26 GAO-13-280SP Sub-Saharan Africa Supplement 

Chinese firms competed. Chinese firms primarily provided electrical 

equipment and construction services and materials, while U.S. firms 

primarily provided information technology equipment, management and 

technical advice, and policy and strategy consulting services.

Figure 16: World Bank–Financed Contracts Won by Firms from the United States, China, and Other Countries in Ghana, 2001-

2011

Notes: According to the World Bank, the data shown include only contracts reviewed by World Bank 

staff prior to award. In general, these types of contracts constitute about 40 percent of total World 

Bank investment lending. The nationality of a firm reflects the country in which it is registered, 

although the firm’s parent may be headquartered in another country. 

a

In addition to winning contracts for feasibility studies, U.S. firms won four contracts for educational 

equipment and four contracts for policy and strategy services. 

b

Other contracts primarily include goods such as transportation equipment, information technology 

equipment, and electrical equipment. 

c

Firms from at least 32 other countries won World Bank contracts, with firms from Ghana and the 

United Kingdom winning the most contracts. 

Commerce data for U.S. firms competing for host-government contracts 

in Ghana provide some evidence that U.S. firms competed with Chinese 

firms almost as often as with firms of other nationalities (see fig. 17). 

From August 2002 until February 2012, U.S. firms requested assistance 

from Commerce’s Advocacy Center in competing for 11 Ghanaian 

government contracts for goods and services. U.S. firms competed 

against Chinese, French, and Israeli firms, respectively, in 4 of the 11 

contracts and against German and Ghanaian firms, respectively, for 5 

contracts. U.S. and Chinese firms competed for contracts in the 
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

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telecommunications, computers and information technology, and 

transportation sectors. U.S. firms competed against firms of other 

nationalities in sectors that included telecommunications and aerospace.

Figure 17: Nationality of Firms Competing for 11 Ghanaian Government Contracts for Goods and Services, 2002-2012

Notes: Data shown are for eleven Ghanaian government contracts for which U.S. firms requested 

Commerce advocacy assistance in August 2002 through February 2012. “Other firms” consists of 

firms that competed for the largest numbers of contracts. In addition to Chinese firms, firms from 

Germany, Ghana, France, and Israel competed with U.S. firms for the largest numbers of contracts. 

Chinese firms have reportedly followed Ghanaian hiring requirements and 

implemented quality construction projects in a timely manner. According 

to U.S. and Ghanaian officials, Ghana’s local content requirements 

regarding hiring of local labor limit the hiring of foreign workers, with 

exceptions made for some high-skilled areas such as engineering. Data 

available from Ghana’s Ministry of Roads and Highways on certain 

projects implemented by Chinese firms provide evidence that Ghanaian 

workers constitute the majority of workers hired by Chinese contractors 
Case Study of U.S. and Chinese Economic 

Engagement in Ghana

Page 28 GAO-13-280SP Sub-Saharan Africa Supplement 

for construction projects. Additionally, according to MCC data, Chinese 

contractors working on MCC-funded projects in Ghana hired seven local 

workers for every Chinese worker. Ghanaian officials who provided 

oversight of MCC-funded and other projects in Ghana did not report any 

concerns with Chinese contractors in regard to hiring local labor. 

Furthermore, officials said that large-scale construction projects 

implemented by Chinese firms were timely and met quality standards, 

and Chinese contractors were more accommodating of contract changes 

compared to other contractors. MCC officials said that the use of an 

engineering firm to supervise construction projects implemented by a 

Chinese firm was important to ensuring the quality of work completed.

The U.S. government’s grant commitments to Ghana exceeded China’s 

during the period 2006 through 2010. From 2001 to 2010, the United 

States committed about $1.6 billion in aid in the form of grants to Ghana, 

including nearly $1.3 billion beginning in 2006 (see fig. 18). The level and 

composition of U.S. aid has varied, with a sharp 1-year increase in 2007 

primarily due to funding from MCC for its $547 million, 5-year compact 

that focused on agriculture, transportation, and rural services projects.5

 

5

MCC compact funds are committed up front when compacts are signed with the partner 

country and obligated after a compact enters into force.

U.S. funding for health assistance generally increased from 2006 to 2010, 

primarily in the area of antimalaria assistance.

U.S. and Chinese 

Grants and Loans to 

Ghana

U.S. Government’s Grants 

to Ghana Exceeded 

China’s in Recent Years
Case Study of U.S. and Chinese Economic 

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Page 29 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 18: U.S. Development Assistance Committed to Ghana, 2001-2010

Note: Commitments are shown in nominal dollars by calendar year. 

China has not published information on its grant-based aid to Ghana. 

However, data published by the Ghanaian government indicate that 

China committed approximately $18 million in grants in 2007, 2008, and 

2011, mostly for the construction of Ghana’s Ministry of Foreign Affairs 

complex (see table 3).
Case Study of U.S. and Chinese Economic 

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Table 3: China’s Grant Commitments to Ghana, 2006-2011 

Dollars in millions

Types of projects

Year 

committed

Grants

committed 

Economic and technical cooperation 2007 $2.10

2008 1.26

Subtotal $3.36

Construction of Ministry of Foreign Affairs complex 2011 15.00

Total $18.36

Source: GAO analysis of data from Ghana’s Ministry of Finance and Economic Planning.

Notes: The Ghanaian government published data on China’s grant commitments in annual budget 

documents from 2006 through 2011. According to these documents, the published data are for 

commitments through the end of September for each year. 

From 2001 to 2011, the U.S. government committed approximately $1.1 

billion in loans and related financing to support exports of U.S. goods and 

services and U.S. firms’ investments in Ghana, as shown in figure 19. 

During this period, U.S. Ex-Im committed about $719 million (64 percent) 

in loans and other financing for U.S.-made products, including motor 

vehicles and cars, metal ore mining, and other machinery and equipment. 

OPIC committed about $399 million (36 percent) in loans and other 

financing for U.S. firms’ investments in areas such as medical equipment, 

home loans, and the petroleum and minerals sectors.

U.S. Government 

Committed Smaller 

Amounts of Loans for 

Ghana Than China Did in 

Recent Years
Case Study of U.S. and Chinese Economic 

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Figure 19: U.S. Government Loans and Related Financing Committed for U.S-Made 

Products and U.S. Firms’ Investments in Ghana, 2001-2011

Notes: Data shown are for nominal dollars by calendar year. In addition, these values are shown by 

calendar year, although U.S. Ex-Im and OPIC typically report data by fiscal year. 

a

OPIC may report data for some financing commitments, such as investment funds, only at the 

regional level. Data shown do not reflect OPIC investment funds for regional use in sub-Saharan 

Africa, possibly including Ghana. According to OPIC officials, because recipients of OPIC investment 

assistance may choose to invest in a set of countries, OPIC may initially lack information such as the 

countries where investments are made. In addition, according to OPIC officials, in countries with 

limited investment activity, business confidentiality agreements may prevent the disclosure of data 

that would reveal details of individual transactions. 

Comprehensive information on China’s loans to Ghana is not available, 

but according to data published by the government of Ghana, China 

committed, or agreed to, more than $3 billion in loans to Ghana between 

2006 and 2011. As shown in table 4, China’s loans were primarily for 

infrastructure construction, including a dam and other energy 

infrastructure; the installation of an electrification system; and 

communications technology. China committed its largest loan to Ghana in 

2011, when the China Development Bank signed an agreement with the 

Ghanaian government to provide $3 billion, largely for oil and gas 

infrastructure and transportation infrastructure, including a railway, ports, 

and harbors. Chinese firms and materials are to make up about 60 
Case Study of U.S. and Chinese Economic 

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Page 32 GAO-13-280SP Sub-Saharan Africa Supplement 

percent of the content used under this agreement, which will be bid 

competitively among Chinese firms, according to a Ghanaian official. 

Repayment of some Chinese loans is tied to natural resources, such as 

oil and cocoa.6

Table 4: China’s Loans Committed to Ghana, 2006-2011 

Dollars in millions

Types of projects

Year 

committed

Loans 

committed

Bui hydro electric project 2008 $68.04

2009 61.83

2010 54.96

Subtotal $184.83

Communication system for national security 2008 6.29 

2009 5.71 

2010 .74 

Subtotal $12.74

Economic and technical cooperation 2007 10.00 

2008 6.00 

2009 5.45

2010 .96

Subtotal $22.41

E-government project 2010 33.00 

Information and communication technology 2010 2.58 

National communication infrastructure 2007 3.80 

2008 4.58

2010 .62 

Subtotal $9.00

Supply of Installation of Self-Help Electrification Program 2008 12.30 

2009 11.18 

2010 2.07 

 

6

According to information published by the government of Ghana, the terms of China’s $3 

billion loan to Ghana indicate that a Chinese state-owned oil company will purchase crude 

oil from Ghana’s national petroleum company to support repayment of the loan. A 

Ghanaian ministry official said that oil also would be used as collateral on the loan. 

According to a World Bank report, cocoa exports make up part of the repayment of 

China’s loan for the construction of the Bui Dam in Ghana.
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Dollars in millions

Types of projects

Year 

committed

Loans 

committed

Subtotal $25.55

Support for fisheries sector 2008 18.00 

2009 21.27 

2010 23.40 

Subtotal $62.67

Various infrastructure development projectsa 2011 3,000.00 

Total $3,352.78 

Source: GAO analysis of data published by Ghana’s Ministry of Finance and Economic Planning.

Notes: The Ghanaian government published data on China’s loan commitments in annual budget 

documents from 2006 through 2011. Documents largely state that published data are for 

commitments through the end of September for that year. 

a

Available budget data did not include China’s $3 billion loan to Ghana signed in December 2011; 

however, we included this loan in our analysis because this financing represents China’s most 

significant loan package to Ghana. 

Data on the United States’ foreign direct investments in Ghana suggest 

that U.S. foreign direct investment flows exceeded China’s reported 

foreign direct investment flows in the most recent years for which 

comparable data are available.7

 

7

BEA has not released U.S. foreign direct investment flows to Ghana from 2007 to 2009 

for reasons of confidentiality.

In the 2-year period 2010 through 2011, 

U.S. cumulative foreign direct investment was $808 million; in the 5-year 

period 2007 through 2011, China’s reported cumulative foreign direct 

investment was $158 million (see fig. 20). According to experts, data on 

U.S. and Chinese 

Investments in Ghana
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China’s foreign direct investment are likely underreported,8 and according 

to BEA, data on U.S. foreign direct investment may also be 

underreported,9

 

8

According to experts, Chinese firms set up subsidiaries, in places such as Hong Kong 

and the British Virgin Islands, that can be used to make investments in sub-Saharan 

Africa. Such investments are not captured by China’s data on foreign direct investment 

and may be a significant source of underreporting. In addition, many small and mediumsized enterprises may not register their foreign direct investments, which therefore may 

not be reflected in China’s data. According to an International Monetary Fund (IMF) 

working paper, China’s foreign direct investment data also show inconsistencies between 

investment flows and changes in investment stock that are difficult to explain (see Montfort 

Mlachila and Misa Takebe, “FDI from BRICs to LICs: Emerging Growth Driver?” IMF 

Working Paper, WP/11/178 [2011], 11). Finally, China does not define foreign direct 

investment when reporting its data. However, the types of data China reports for its 

foreign direct investments (e.g., equity investment data, reinvested earnings data) are 

similar to data reported for U.S. foreign direct investment. However, China’s reported 

foreign direct investment data represent official information published by the Chinese 

government and, despite their limitations, have been used in various reports, including 

those published by international organizations (e.g., the IMF), government agencies, 

academic experts, and other research institutions, to describe China’s foreign direct 

investment activities in Africa.

limiting precise comparisons of the United States’ and 

China’s investments. According to information from BEA, from 2006 

through 2011, the vast majority of U.S. foreign direct investment stock 

was in mining and activities related to the mining sector, with an average 

annual growth rate of 25 percent in mining investments during that period. 

This growth was a turnaround from the decline in U.S. foreign direct 

investment stock in mining from 2001 through 2005. Comparable 

information on China’s foreign direct investment in Ghana by sector is not 

available.

9

BEA noted that these data may not include investments in Sub-Saharan Africa by U.S. 

firms through subsidiaries in locations such as the Netherlands. According to BEA, U.S. 

foreign direct investment data are based on a 2009 benchmark survey that covers the 

value of all U.S. foreign direct investment, but these data may not reflect foreign direct 

investments by smaller firms. 
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Figure 20: Reported Flows of Foreign Direct Investment from the United States and 

China to Ghana, 2007-2011

Notes: Data are shown in nominal values. 

a

Data on U.S. foreign direct investment flows from 2007 through 2009 are confidential and have not 

been released. 

Data on the purchase of ownership interests in oil blocks in Ghana as of 

August 2012 indicate that U.S. firms are active in the petroleum sector but 

that Chinese firms are not (see fig. 21). Following a U.S. firm’s discovery 

of oil offshore in Ghana in 2007, commercial production began in late 

2010, and Ghana became an oil-exporting country in 2011. U.S. 

companies have operator roles in 2 of Ghana’s 17 oil blocks, with primary 

responsibility for operations such as drilling, maintenance, and complying 

with required rules and regulations. In addition, U.S. firms have 

purchased ownership interests in 4 oil blocks as nonoperators, where 

these firms have a minority stake and are not responsible for 
Case Study of U.S. and Chinese Economic 

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operations.10

Figure 21: Numbers and Types of U.S. and Chinese Firms’ Investments in Oil Blocks in Ghana, August 2012

Chinese firms do not operate or own any shares of Ghana’s 

oil blocks. European and African firms operate the majority of the 

remaining oil blocks.

a

In addition to U.S. firms, firms from Bermuda, Italy, Nigeria, and the United Kingdom, among others, 

operate Ghana’s 17 oil blocks. In one oil block, a U.S. firm had an operator role and another U.S. firm 

had a nonoperator role. 

 

10In one oil block in Ghana, one U.S. firm was in an operator role and another U.S. firm 

was in a nonoperator role.
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in Kenya 

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China’s total trade in goods with Kenya has increased since 2001 and 

has exceeded U.S. total trade since 2007 (see fig. 22). From 2001 to 

2011, total U.S. trade in goods fluctuated but changed relatively little 

overall, rising from nearly $711 million in 2001 to $844 million in 2011; 

although U.S. imports nearly tripled, U.S. exports declined by about 20 

percent. China’s total trade grew by a factor of 17 during this period, from 

nearly $145 million to approximately $2.4 billion, primarily because of the 

increase in Chinese exports to Kenya.

Figure 22: U.S. and Chinese Total Trade in Goods with Kenya, 2001-2011

Notes: Total trade is defined as imports plus exports. Trade data are shown in nominal dollars. 

Changes in value over time are due in part to changes in the prices of traded goods. For consistency 

with data reported by the IMF’s Direction of Trade Statistics and the World Trade Atlas, data for 

Chinese imports have been adjusted to exclude imports of a category of goods labeled “special 

transactions.” 

From 2001 through 2011, U.S. exports to Kenya decreased while 

Chinese exports rose, as shown in figure 23. Specifically, U.S. exports to 

Case Study of U.S. and Chinese Engagement 

in Kenya

U.S. and Chinese 

Trade with Kenya

China’s Trade in Goods 

with Kenya Has Increased
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 38 GAO-13-280SP Sub-Saharan Africa Supplement 

Kenya dropped from $574 million in 2001 to $447 million in 2011, 

primarily owing to a decline in U.S exports of machinery and transport 

equipment.1

Figure 23: U.S. and Chinese Exports of Goods to Kenya, 2001- 2011

Meanwhile, Chinese exports to Kenya in 2011 greatly 

exceeded the United States’, growing from nearly $139 million in 2001 to 

$2.4 billion in 2011. In 2011, China’s top exports included manufactured 

goods (e.g., woven fabrics and footwear), and machinery and transport 

equipment (e.g., transmission equipment and motorcycles).

Note: Export data are shown in nominal dollars. 

In contrast to exports, U.S. imports of goods from Kenya exceeded 

Chinese imports in 2001 through 2011. U.S. and Chinese imports of 

goods differed in size and composition, as shown in figure 24. U.S. 

imports nearly tripled from 2001 to 2011, from $137 million to $397 

 

1

U.S. exports of machinery and transport equipment declined from $469 million in 2001 to 

$110 million in 2011. This category includes exports of aircraft and related equipment, 

which dropped from $413 million in 2001 to $6 million in 2011.
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in Kenya 

Page 39 GAO-13-280SP Sub-Saharan Africa Supplement 

million, in part because of an increase in imports of apparel and clothing 

from $69 million in 2001 to $272 million in 2011.

Figure 24: U.S. and Chinese Imports of Goods from Kenya, 2001-2011

Note: Import data are shown in nominal dollars. 

Under AGOA, the U.S. trade preference program, textiles, apparel, 

leather, and footwear constituted nearly 96 percent of U.S. imports from 

Kenya from 2001 to 2011 (see fig. 25).2

 

2

From 2001 to 2011, approximately $2.4 billion in U.S. imports from Kenya—

approximately 75 percent of total U.S. imports from the country in that period— had tariffs 

eliminated under AGOA and GSP combined.

AGOA’s “third-country fabric 

provision” has enabled Kenya to generally increase its apparel exports, 

according to U.S. and Kenyan officials, and Kenya has become one of the 

largest exporters of nonpetroleum goods to the United States. U.S. and 

Kenyan officials pointed to the positive employment effects in Kenya 

associated with apparel exports under AGOA. However, they also noted 

AGOA’s limited success in enabling Kenya and other sub-Saharan 

African countries to manufacture textiles and fabrics, which form the input 

for apparel manufacturing. Kenya and Ghana obtain fabrics mostly from
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 40 GAO-13-280SP Sub-Saharan Africa Supplement 

China and other Asian countries to manufacture apparel for export to the 

United States, according to U.S. officials in these countries. As a result, 

Chinese exports of textile and fabrics to Kenya also increased during this 

period, from $40 million in 2001 to $347 million in 2011. Meanwhile, 

Chinese imports from Kenya were less than U.S. imports but grew at a 

faster rate, from nearly $6 million in 2001 to almost $60 million in 2011. 

Top Chinese imports in 2011 included iron ore, leather, scrap metal, and 

tea.

Figure 25: U.S. Imports of Goods from Kenya under AGOA, 2001-2011

Notes: Data are shown in nominal dollars. U.S. imports of goods represented as “all other,” ranging 

from a low of approximately $35,000 in 2003 to a high of nearly $1.13 million in 2011, are not visible. 
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 41 GAO-13-280SP Sub-Saharan Africa Supplement 

From 2006 through 2011, total U.S. trade in services with Kenya 

averaged about $899 million annually. U.S. imports of services, not 

including travel and passenger fares, averaged about $281 million per 

year, and U.S. exports of services averaged about $618 million per year.3

The largest sector for U.S. imports of services was business, 

professional, and technical services. The largest sectors for U.S. exports 

of services were business, professional, and technical services; 

education; and travel and passenger fares. Comparable country-level 

data on China’s trade in services in Kenya are not available.

Chinese firms are competing with U.S. firms in Kenya’s information- and 

communication-technology sector. Additionally, counterfeits manufactured 

by Chinese firms adversely affect U.S. firms’ sales and reputation in 

Kenya. However, U.S. and Chinese firms largely do not compete in 

similar sectors in Kenya for donor-funded and host-government contracts.

Chinese firms are competing with U.S. firms in Kenya’s information- and 

communication-technology sector, but it is not clear whether this 

competition directly affects U.S.-made exports to these countries, 

according to officials of U.S. agencies and U.S. firms operating in Kenya. 

A senior official at a large U.S. information- and communicationtechnology firm noted that Chinese firms are innovating and adapting 

quickly to local markets. For example, a Chinese firm in this sector has 

established one of the largest training centers in Kenya. Moreover, this 

official noted that in contrast to the U.S. government, the Chinese 

government and European governments are more active in combining 

 

3

Data on U.S imports of travel and passenger fares to Kenya are unavailable and are not 

included in the estimates for total U.S. trade in services and imports of services. However, 

given that Kenya received more U.S. travelers than Ghana in 2010, according to the 

Kenyan Ministry of Tourism and U.S. Department of Homeland Security, we estimate that 

U.S. imports from Kenya of travel and passenger fares in 2006 through 2010 likely 

equaled or exceeded this category of U.S. imports from Ghana, which averaged $350 

million per year during that period. From 2006 to 2011, annual U.S. imports averaged 

approximately $50 million to $200 million per year from Kenya for business, professional, 

and technical services. During the same period, annual U.S. exports to Kenya averaged 

around $50 million to $200 million for business, professional, and technical services, $176 

million for education services, and $109 million for travel and passenger fares. To 

calculate total trade, imports, and exports to Kenya, we used the higher value when 

ranges of estimates were provided for service sectors such as business, professional, and 

technical services. Our estimates are based on underlying tabulations from BEA and other 

sources and on our analysis of BEA’s survey data. 

U.S. Trade in Services with 

Kenya Is Estimated at 

Nearly $1 Billion Annually, 

but Comparable Data on 

China’s Trade in Services 

Are Not Available

U.S. and Chinese Firms 

Compete in Some Sectors 

but Generally Not for 

Donor-Funded and HostGovernment Contracts

Competition in Informationand CommunicationTechnology Sector
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 42 GAO-13-280SP Sub-Saharan Africa Supplement 

government and business interests to take advantage of large 

telecommunications projects in countries such as Kenya. Trade data 

indicate that China’s exports of telecommunications equipment to Kenya 

rose from $0.5 million in 2001 to $122 million in 2011. However, it is 

unclear whether direct competition from Chinese firms affects U.S.-made 

exports, in part because multinational corporations headquartered in the 

United States operate globally. For example, according to a 

representative of a U.S. firm that manufactures telecommunications 

equipment, most of its products are manufactured outside the United 

States and therefore competition from Chinese telecommunications firms 

in Kenya does not affect U.S.-made exports.

Counterfeit goods and related products from China have adversely 

affected U.S. firms’ sales and reputation in Kenya.4 According to a 2012 

study by the Kenyan Association of Manufacturers, counterfeit goods 

primarily from China, especially in the energy, electronic, and electrical 

components sector, have negatively affected the sales and reputation of 

U.S. firms and others with operations in Kenya.5

 

4

According to a March 2012 draft report by the Kenyan Association of Manufacturers, 

counterfeiting includes the violation of trademarks, industrial designs, geographical 

indications, copyright, and related rights. Kenyan Association of Manufacturers, The Study 

to Determine Severity of the Counterfeit Problem In Kenya as It Affects Industries and 

Impact of Proliferation of Counterfeit Products from Other EAC Partner States And Far 

East Countries Into the Kenyan Market, draft report (March 2012).

For example, according 

to a representative of a U.S. firm that manufactures dry-cell batteries in 

Kenya, the influx of counterfeit and substandard products, mainly from 

China, caused the U.S. firm’s business to decline, and over time the firm 

has decreased the number of its employees in Kenya from 800 to 300. 

Furthermore, according to the former head of the U.S. firm’s East Africa 

division, prior to competition from Chinese products, the U.S. firm’s 

market share of carbon zinc batteries was about 80 percent. However, by 

May 2011, Chinese products controlled 60 percent of the market. This 

official also noted that in some cases, Chinese products, although of 

poorer quality, mimicked the U.S. firm’s product branding and color 

schemes. Although the U.S. firm successfully litigated in Kenyan courts 

against this trademark infraction, according to this official the penalty was 

5

The Kenyan Association of Manufacturers report also notes that manufacturers in Kenya 

lose more than $40 million annually because of counterfeit products. According to 

manufacturers interviewed for the report, about 30 percent of electrical components and 

electronics (such as motors and generators, switchgears, and batteries) sold in Kenya are 

counterfeits and are primarily from China. 

Impact of Counterfeits from 

China
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 43 GAO-13-280SP Sub-Saharan Africa Supplement 

too lenient to have a deterrent effect on the Chinese manufacturers of 

counterfeits. Trade data indicate that China’s exports of batteries 

(including rechargeable batteries and parts) increased from $15 million in 

2001 to $48 million in 2011. To combat Chinese counterfeits, the U.S. 

embassy in Kenya has sponsored several public-education programs, 

and the U.S. government is providing technical assistance to Kenya’s 

Anti-Counterfeit Agency, established in 2010. However, corruption in 

Kenya, as well as the Kenyan government’s lack of willingness to take 

appropriate actions, have significantly impeded the fight against 

counterfeits, according to U.S. firms and the Kenyan private sector.6

U.S. and Chinese firms largely do not compete with each other in similar 

sectors in Kenya for donor-funded and Kenyan government contracts, 

including contracts for the provision of goods and services. According to 

data on World Bank-funded projects in Kenya for which U.S. and Chinese 

firms won contracts between 2001 and 2011, Chinese firms won a larger 

share of contract dollars and were primarily active in providing medical 

equipment and construction services and materials.7

 

6

Although Kenya established an anticounterfeit agency in 2010, a representative for U.S. 

firms in Kenya and Kenyan officials noted that the agency has been underresourced and 

is unable to take necessary actions against counterfeits.

In contrast, U.S. 

firms won a significantly smaller share of overall contract dollars for World 

Bank–funded projects in Kenya and were primarily active in consulting 

services, such as providing management and technical advice and 

supervising construction. Figure 26 compares World Bank-funded 

contracts won by firms from the United States, China, and other 

countries.

7

Services provided by U.S. firms under World Bank–funded contracts represent a small 

fraction (less than 1 percent) of annual U.S. trade in service exports to Kenya. However, 

World Bank contracts represent one of the few instances where data are available for 

examination of potential competition between U.S. and Chinese firms. According to the 

World Bank, the data include only contracts reviewed by World Bank staff prior to award, 

which constitute about 40 percent of total World Bank investment lending. The nationality 

of a firm reflects the country where it is registered, although the firm’s parent may be 

headquartered in another country.

General Absence of 

Competition for Donor-Funded 

and Host-Government 

Contracts
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 44 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 26: World Bank–Funded Contracts Won by Firms from the United States, China, and Other Countries in Kenya, 2001-

2011

Notes: According to the World Bank, the data shown include only contracts reviewed by World Bank 

staff prior to award. In general, these types of contracts constitute about 40 percent of total World 

Bank investment lending. In addition, the nationality of a firm reflects the country in which it is 

registered, although the firm’s parent may be headquartered in another country. 

a

Other contracts primarily include goods such as medical equipment and products, transportation 

equipment, and water supply and sewerage equipment. 

b

Firms from at least 27 other countries won World Bank contracts, with firms from Kenya and the 

United Kingdom winning the most contracts. 

Officials from the Kenyan government and NGOs generally viewed 

Chinese firms’ implementation of construction projects positively, because 

their projects were completed in a timely manner and were of better 

quality than those implemented by local Kenyan companies. According to 

Kenyan Ministry of Roads officials, Chinese contractors generally met 

standards for road construction, in part because the contracts included 

adequate supervision by third parties. Moreover, strong application of 

local-content rules in Kenya has restricted the number of Chinese 

workers and led to Chinese contractors’ hiring more local workers, 

according to U.S. and Kenyan government officials. In addition, according 

to U.S. officials and other donors, Chinese firms’ business practices, such 

as housing workers near project sites and maintaining long work days, 

contribute to keeping construction costs low. Finally, the presence of 

Chinese firms, even on projects funded by other donors, has helped 

create a positive image for China in Kenya, according to U.S. and Kenyan 

officials. By contrast, the United States may get less publicity despite its 

large aid commitment, because it does not fund infrastructure projects in 
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 45 GAO-13-280SP Sub-Saharan Africa Supplement 

Kenya, according to a U.S. official. Figure 27 shows a newly built highway 

and signage for the Chinese state-owned firm that constructed the road in 

Nairobi, Kenya.

Figure 27: Photos of Newly Built Road and Signage for Chinese Contractor That Built Road Section in Nairobi, Kenya

Commerce data on U.S. firms bidding on host-government contracts 

provide some evidence that European firms were U.S. firms’ primary 

competitors for host-government contracts. From August 2002 to 

February 2012, U.S. firms requested assistance from Commerce’s 

Advocacy Center in competing for 28 Kenyan government contracts for 

goods and services. Chinese firms competed on 4 of these contracts, for 

oil and gas, medical equipment, healthcare, and computers and 

information technology equipment (see fig. 28). French, British, and Dutch 

firms competed with U.S. firms for more contracts and in more sectors, 

including aerospace, oil and gas, energy and power, and services, than 

did Chinese firms.
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 46 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 28: Nationality of Firms Competing for 28 Kenyan Government Contracts for Goods and Services, 2002–2012

Note: Data shown are for 28 Kenyan government contracts for which U.S. firms requested Commerce 

advocacy assistance in August 2002 through February 2012. Firms from France, the United Kingdom, 

the Netherlands, South Africa, and Germany competed with U.S. firms for the largest numbers of 

contracts. 
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 47 GAO-13-280SP Sub-Saharan Africa Supplement 

The U.S. government committed more grant assistance to Kenya than 

China did in 2009 and 2010. From 2001 to 2010, the United States 

committed almost $4 billion in aid to Kenya, including about $1.7 billion 

beginning in 2009, predominantly in the form of grants (see fig. 29).8

 

8

According to U.S. aid data reported to OECD, concessional loans comprised about 0.1 

percent of U.S. aid to Kenya from 2001 through 2010. The United States has not 

committed any loans as aid to Kenya since 2008. 

The 

level of U.S. aid to Kenya generally increased from 2001 through 2010, 

largely because of an increase in funding in the health sector through 

initiatives such as the President’s Emergency Plan for AIDS Relief and 

the President’s Malaria Initiative as well as an increase in humanitarian 

assistance, primarily food aid. U.S. health programs in Kenya are among 

the largest U.S. government health portfolios globally, according to the 

Department of State.

United States’ and 

China’s Grants and 

Loans to Kenya

U.S. Grants to Kenya 

Exceed China’s in Recent 

Years
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 48 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 29: U.S. Development Assistance Committed to Kenya, 2001-2010

Note: Import data are reported in nominal dollars. 

China does not publish data on its grants to countries, but Kenyan 

government documents indicate that China committed almost $39 million 

in grants from July 2009 through June 2012, (see table 5).9

 

9

The Kenyan government reported China’s grant commitments for the Kenyan fiscal year 

(July-June). 

Most of 

China’s grants were for infrastructure such as roads, a hospital, and a 

sports center. China also committed assistance for emergency food aid in 

Kenya’s fiscal year 2009/2010.
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 49 GAO-13-280SP Sub-Saharan Africa Supplement 

Table 5: China’s Grants Committed to Kenya, July 2009–June 2012

Types of projects

Year 

committeda Grants 

committed 

Renovation of Kasarani sports center 2009/2010 $2,927,970 

2010/2011 12,016,970 

Subtotal $14,944,940 

Construction of hospital in Eastlands 2009/2010 7,092,419 

2010/2011 1,037,388 

Subtotal $8,129,807 

Gambogi-Serem road 2009/2010 651,877 

2010/2011 606,305 

2011/2012 4,505,242 

Subtotal $5,763,424 

Rehabilitation of Nairobi roads and street lighting 

project

2009/2010 3,259,384 

Social economic recovery and reconstruction 2009/2010 2,933,445 

Emergency food aid 2009/2010 3,146,609 

Maize flour processing project 2009/2010 749,111 

Total $38,926,720 

Source: GAO analysis of Government of Kenya data.

a

Grant commitments are shown for Kenyan fiscal years (July-June). 

The U.S. government committed about $896 million in loans and related 

financing, such as loan guarantees and insurance, between 2001 and 

2011, primarily to support the export of U.S.-made aerospace products 

and parts and for U.S. investments in geothermal power and other 

sectors in Kenya (see fig. 30).10

 

10From 2001 to 2011, OPIC authorized about $363 million, more than half of which was 

authorized in 2011 for investment in a geothermal power plant. During this period, U.S. 

Ex-Im authorized about $533 million, with about 90 percent of those funds authorized for 

aerospace products and parts. 

U.S. Government 

Committed Loans for U.S. 

Exports and Investments 

in Various Sectors, while 

China Committed Loans 

Mainly for Infrastructure 

Construction
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 50 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 30: U.S. Government Loans and Related Financing Committed for U.S.-made 

Products and U.S. Firms’ Investments in Kenya, 2001-2011

Notes: Data are shown in nominal dollars by calendar year. In addition, these values are shown by 

calendar year, although U.S. Ex-Im and OPIC typically report data by fiscal year. 

a

OPIC may report data for some financing commitments, such as investment funds, only at the 

regional level. Data shown do not reflect OPIC investment funds for regional use in sub-Saharan 

Africa, possibly including Kenya. According to OPIC officials, because recipients of OPIC investment 

assistance may choose to invest in a set of countries, OPIC may initially lack information such as the 

countries where investments are made. In addition, according to OPIC officials, in countries with 

limited investment activity, business confidentiality agreements may prevent the disclosure of data 

that would reveal details of individual transactions. 

China authorized about $480 million in loans from July 2009 to June 

2012, primarily for infrastructure such as roads, geothermal wells, and 

power distribution (see table 6). China also committed funds for an egovernment initiative, upgrading of equipment at universities and training 

institutes, rural telecommunication development, and purchase of other 

equipment. As a result of its recent funding, China has become one of the 

top donors to Kenya in the last 5 years, primarily providing highly 

concessional loans, according to a senior official at Kenya’s Ministry of 

Finance.
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 51 GAO-13-280SP Sub-Saharan Africa Supplement 

Table 6: China’s Loans for Projects in Kenya, July 2009–June 2012 

Types of projects

Year 

committeda Loans 

committed 

Nairobi eastern and northern bypass road project 2009/2010 $26,075,070 

2010/2011 54,567,474 

2011/2012 24,778,831 

Subtotal $105,421,375 

Nairobi-Thika highway improvement project (one of 

three segments)

2010/2011 57,053,326 

2011/2012 45,052,420 

Subtotal $102,105,746 

Drilling of Olkaria IV geothermal wells 2010/2011 52,797,063 

2011/2012 36,041,936 

Subtotal $88,838,999 

Kenya power and distribution system modernization 

project

2009/2010 7,483,545 

2010/2011 18,189,158 

2011/2012 46,178,731 

Subtotal $71,851,434 

Kenya e-government 2009/2010 16,900,197 

2010/2011 7,275,663 

2011/2012 1,312,152 

Subtotal $25,488,012 

Enterprise messaging and collaboration system 2011/2012 43,700,848 

Rehabilitation and upgrading of equipment in 

universities and technical training institutes

2011/2012 27,819,870 

Procurement for equipment 2009/2010 17,767,813 

Kenya rural telecommunication development program 2009/2010 54,992 

Total $483,049,089 

Source: GAO analysis of Kenyan government data.

a

Loan commitments are shown for each Kenyan fiscal year (July–June). 
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 52 GAO-13-280SP Sub-Saharan Africa Supplement 

From 2007 through 2011, cumulative U.S. foreign direct investment flows 

were $12 million, while China’s reported foreign direct investment flows 

totaled about $230 million (see fig. 31). According to experts, data on 

China’s foreign direct investments are generally underreported,11 and 

according to BEA, data on U.S. foreign direct investments may be 

underreported,12

 

11According to experts, Chinese firms set up subsidiaries, in places such as Hong Kong 

and the British Virgin Islands, that can be used to make investments in sub-Saharan 

Africa. Such investments are not captured by China’s data on foreign direct investment 

and may be a significant source of underreporting. In addition, many small and mediumsized enterprises may not register their foreign direct investments, which therefore may 

not be reflected in China’s data. According to an International Monetary Fund (IMF) 

working paper, China’s foreign direct investment data also show inconsistencies between 

investment flows and changes in investment stock that are difficult to explain (see Montfort 

Mlachila and Misa Takebe, “FDI from BRICs to LICs: Emerging Growth Driver?” IMF 

Working Paper, WP/11/178 [2011], 11). Finally, China does not define foreign direct 

investment when reporting its data. However, the types of data China reports for its 

foreign direct investments (e.g., equity investment data, reinvested earnings data) are 

similar to data reported for U.S. foreign direct investment. Moreover, China’s reported 

foreign direct investment data represent official information published by the Chinese 

government and, despite their limitations, have been used in various reports, including 

those published by international organizations (e.g., the IMF), government agencies, 

academic experts, and other research institutions, to describe China’s foreign direct 

investment activities in Africa.

limiting precise comparisons of the United States’ and 

China’s investments.

12BEA noted that these data may not include investments in Sub-Saharan Africa by U.S. 

firms through subsidiaries in locations such as the Netherlands. According to BEA, U.S. 

foreign direct investment data are based on a 2009 benchmark survey that covers the 

value of all U.S. foreign direct investment, but these data may not reflect foreign direct 

investments by smaller firms. 

U.S. and Chinese 

Investments in Kenya
Case Study of U.S. and Chinese Engagement 

in Kenya 

Page 53 GAO-13-280SP Sub-Saharan Africa Supplement 

Figure 31: Reported Flows of Foreign Direct Investment from the United States and 

China to Kenya, 2007-2011

Note: Data are shown in nominal values. 

From 2006 through 2011, according to BEA, the majority of U.S. foreign 

direct investment stock in Kenya was in finance and insurance and grew 

at an average annual rate of 20 percent. Growth in finance and insurance 

investments was primarily driven by investment in banks. Manufacturing, 

led by chemicals and transportation-equipment manufacturing, was the 

second largest sector but declined at an average annual rate of 3 percent 

during this period. Sectoral data for China’s foreign direct investment 

stock in Kenya were not available.
Appendix I: GAO Contact and Staff 

Acknowledgments

Page 54 GAO-13-280SP Sub-Saharan Africa Supplement 

David Gootnick, (202) 512-3149 or gootnickd@gao.gov

In addition to the contact named above, Celia Thomas (Assistant 

Director), Fang He, Farhanaz Kermalli, and Mona Sehgal made key 

contributions to this report. Gezahegne Bekele, Ming Chen, Lynn 

Cothern, David Dornisch, Mark Dowling, Philip Farah, Etana Finkler, 

Bruce Kutnick, Reid Lowe, Marc Molino, Mary Moutsos, and Jeremy 

Sebest provided technical assistance.

Appendix I: GAO Contact and Staff 

Acknowledgments 

Contact

Staff 

Acknowledgments

(320958)
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