US President Barack Obama’s ‘Doing Business in Africa’ campaign, aimed at increasing US investment in Africa, is gaining momentum ahead of an August Summit with African leaders.
Senior Obama administration officials, however, said while the US’ commitment to engage in business is clear, achieving the desired goals would require serious groundwork.
“America’s commitment to this issue is clear,” said Ernest Moniz, the US Energy Secretary. “I hope our discussions can begin to answer…basic questions. What has to happen for US private business to increase their investments in Africa’s energy sector?”
Secretary Moniz, who met 30 ministers of energy from across Africa during an Energy Ministerial meeting in Addis Ababa, Ethiopia, 3-4 June, called for a review of potential obstacles to energy financing in Africa.
The US official said addressing the shortfalls and creating a system to enable US government agencies and African governments to work together will break the barriers.
Ethiopian Prime Minister Hailemariam Desalegn, currently constructing electricity projects with an installed capacity of 8,400 Megawatts, said Ethiopia had experienced the energy investment challenges.
“The private sector has not shown interests in power projects due to low returns…there is still long-term perceived risk associated with private sector investment in the energy sector. This dialogue will accelerate the opportunities available in Africa’s energy sector,” Hailemariam said.
African countries require US$300 billion worth of investments in the energy sector alone, the kind of investment that Moniz said would require the private sector.
“We have had discussions on how to attract large investments. The emphasis is on the importance of regional solutions especially on the use of the natural gas and how it could help the regional economies,” Moniz said at the conclusion of the US-Africa Energy ministerial talks.
African Union (AU) regional energy and infrastructure plan is focused on developing nine major electricity generation projects, and includes four power transmission lines across Eastern and Southern Africa and a West African gas pipeline originating from Nigeria and extending far north to Algeria.
The combined portfolio of the projects under the AU flagship Programme for Infrastructure Development (PIDA) is estimated at US$40 billion, according to the AU Department of Energy.
President Obama, whose election caused excitement in Africa in 2008, is set to host 50 African heads of state for the First US-African Leaders Summit 5-6 Aug. in Washington.
During Secretary Moniz’s visit, the US Export-Import Bank (Ex-Im Bank) announced US$1.1 billion to finance US exports to Africa in the first seven months of 2014 fiscal year.
Ex-Im Bank President Fred Hochberg, who attended the Ministerial meeting, said the funds would help to create and sustain jobs by increasing American exports to Africa.
Ex-Im Bank executives said they expected to approve more loans to benefit small-business exporters of spare parts, consumer goods and other products.