{"id":6245,"date":"2013-06-27T07:14:55","date_gmt":"2013-06-27T07:14:55","guid":{"rendered":"http:\/\/praag.org\/?p=6245"},"modified":"2013-06-27T07:26:35","modified_gmt":"2013-06-27T07:26:35","slug":"obamas-power-trip-to-africa","status":"publish","type":"post","link":"https:\/\/praag.org\/?p=6245","title":{"rendered":"Obama’s ‘power trip’ to Africa"},"content":{"rendered":"
\"pylons\"<\/a>Mr Obama is arriving in Africa this time with a few tricks up his sleeve. He will announce the creation of a new fund, Power Africa, to support the development of electricity infrastructure with a mix of state and private investment as well as initiatives to promote trade. His trip coincides with talks in Addis Ababa on renewing the Clinton era African Growth and Opportunity Act, which gave thousands of African products duty-free access to the US.<\/div>\n

Nearly 600 million Africans face energy poverty, the in\u00adability to cook with modern cooking fuels and a lack of mini\u00admum lighting for productive activities at sunset. \u00a0This energy gap impacts a variety of health, education and economic outcomes:\u00a0 Vaccines cannot be properly refrigerated, girls are pulled out of school to collect firewood, and small businesses cannot expand because of energy limitations.<\/p>\n

As the Obama team considers a policy legacy for Africa during its second term starting in 2013, advisors believe a strong U.S. commitment to close the energy poverty gap in Africa can benefit the global economy.<\/p>\n

With strategic interventions, the U.S. could address this energy poverty gap while at the same time create markets and increase investments for American businesses.\u00a0 If the White House leverages private investment by rationalizing U.S. government tools, such as the Overseas Private Investment Corporation, and engages proactively with African environmental powers, the U.S. could make a significant contribution to accomplishing this achievable goal.<\/p>\n

For the past couple of decades, U.S. companies have piled into Asia to reach new consumers. Now companies such as General Electric<\/span> Co., General Motors<\/span> Co. and Procter & Gamble<\/span> Co. are expanding in the long-neglected frontier market of Africa.<\/p>\n

GE on Friday signed an agreement to build a 400-megawatt gas-fired power plant in Tanzania. The East African country, where U.S. President Barack Obama<\/span> plans to visit next week, is one of many on the continent that is seeking more electricity to meet growing demand from businesses and consumers.<\/p>\n

Meanwhile, P&G is investing more than $150 million in its South African factories to expand the supply of its diapers and other products in southern and eastern Africa. And GM in October plans to start selling newly licensed Isuzu trucks in Kenya, Nigeria and Angola.<\/p>\n

Until recently, most U.S. companies concentrated investment in the continent’s biggest economies, such as South Africa and Nigeria, or those with mineral wealth, like Angola. But as they seek new consumers, U.S. companies are branching out across the continent.<\/p>\n

“People are finding that there are opportunities beyond the biggest markets in Africa, and part of it is because year-after-year growth in Africa has been stronger than on almost any other continent,” says Clay Lowery, a vice president at Rock Creek Global Advisors, an economic-policy consulting firm in Washington.<\/p>\n

By 2018, five of the world’s fastest-growing economies will be in sub-Saharan Africa, according to the International Monetary Fund. U.S. companies invested $48.5 billion in Africa in the decade through 2011, according to the United Nations Conference on Trade and Development, more than companies from any other nation did. But China and India are catching up, pumping billions of dollars into Africa in each of the past few years.<\/p>\n

President Obama’s visit to Senegal, South Africa and Tanzania beginning Wednesday is expected to bolster efforts to burrow into the continent’s smaller, more fragmented markets.<\/p>\n

U.S. officials for years have urged American corporations to pursue opportunities in Africa to keep pace with the Chinese, Indian and Brazilian companies already here. On a trip to Senegal last August, then-Secretary of State Hillary Clinton<\/span> touted U.S. businesses’ “sustainable partnerships in Africa that add value rather than extract it,” a thinly veiled reference to Chinese companies, which largely are focused on resource-related investments to support China’s economy.<\/p>\n

U.S. corporations aren’t strangers to Africa. Companies including Coca-Cola<\/span> Co. and Exxon Mobil<\/span> Corp. have long invested on the continent and have been expanding. Since 2000, the U.S. African Growth and Opportunity Act has boosted African manufacturers, allowing them to export clothing to the U.S. duty free.<\/p>\n

But many U.S. companies are only now waking up to Africa’s new consumer class, a byproduct of steady growth and more stable governments.<\/p>\n

Stronger commercial relationships, some analysts say, could strengthen diplomatic ties with many African countries, as happened in China, India and elsewhere in Asia.<\/p>\n

“We were never focused on Africa in any way,” says Witney Schneidman, a former U.S. diplomat and now a senior adviser for Africa for law firm Covington & Burling LLP. “Are corporates the agents of change?”<\/p>\n

Africa is far from being the next Asia, however. The continent has a sixth of the world’s population but fuels less than 3% of the global economy. Africa also received less than 3% of global foreign direct investment in 2011, according to the U.N.<\/p>\n

But the continent is growing fast from its low base. The IMF projects that sub-Saharan Africa’s economy will expand 5.6% this year, compared with 3.6% world-wide. The African Development Bank estimates that the continent’s emerging middle class may already be 300 million strong. – FT\/WSJ\/Brookings<\/p>\n

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Mr Obama is arriving in Africa this time with a few tricks up his sleeve. He will announce the creation of a new fund, Power Africa, to support the development of electricity infrastructure with a mix of state and private investment as well as initiatives to promote trade. His trip coincides with talks in Addis … Continue reading “Obama’s ‘power trip’ to Africa”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":6246,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,3,4,10],"tags":[90,3527],"class_list":["post-6245","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-and-finance","category-news","category-south-africa","category-united-states","tag-obama","tag-power-africa"],"cc_featured_image_caption":{"caption_text":false,"source_text":false,"source_url":false},"jetpack_featured_media_url":"https:\/\/praag.org\/wp-content\/uploads\/2013\/06\/pylons.jpg","_links":{"self":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/6245","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6245"}],"version-history":[{"count":3,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/6245\/revisions"}],"predecessor-version":[{"id":6248,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/6245\/revisions\/6248"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/media\/6246"}],"wp:attachment":[{"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6245"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6245"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6245"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}