U.S. and Chinese trade in goods with Angola has risen dramatically, dominated by oil imports, with China’s trade surpassing the United States’. 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. as frozen poultry products. Figure 3 shows the trends and composition of U.S. and Chinese exports to Angola from 2001 through 2011. 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. 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. 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. 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. From 2001 to 2010, the U.S. government committed $804 million in grants to Angola, primarily for health and humanitarian assistance. 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. 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. 1), according to the Angolan Ministry of Finance and a U.S. official.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. 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. Consequently, a large number of Chinese work in Angola on these projects. 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. 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, 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, and according to the Bureau of Economic Analysis (BEA), data on U.S. foreign direct investments may also be underreported, 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. rules and regulations. 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.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. 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. 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. increased its imports of ores from 2001 to 2011 and also began importing crude oil in 2011. duty exemptions under China’s trade preferences for least developed countries. 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. 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). 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). 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. 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. telecommunications, computers and information technology, and transportation sectors. U.S. firms competed against firms of other nationalities in sectors that included telecommunications and aerospace. 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. U.S. funding for health assistance generally increased from 2006 to 2010, primarily in the area of antimalaria assistance. 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. 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. China’s foreign direct investment are likely underreported, and according to BEA, data on U.S. foreign direct investment may also be underreported, 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. operations.oil blocks. European and African firms operate the majority of the remaining oil blocks. 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. 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. 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). million, in part because of an increase in imports of apparel and clothing from $69 million in 2001 to $272 million in 2011. 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. 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.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. 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. 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. 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. 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. In contrast, U.S. 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. 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. 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. 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). 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. 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). Case Study of U.S. and Chinese Engagement in Kenya Case Study of U.S. and Chinese Engagement in Kenya Types of projects Nairobi eastern and northern bypass road project Subtotal Nairobi-Thika highway improvement project (one of three segments) 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, and according to BEA, data on U.S. foreign direct investments may be underreported, limiting precise comparisons of the United States’ and China’s investments. 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.

Summary: This supplemental report is a companion to Sub-Saharan Africa: Trends in U.S. and Chinese Economic Engagement (GAO-13-199). 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. 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 GAO-13-199 . 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 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.