US To Double Electricity Access In Africa: What’s In It For Uncle Sam?

by John Johnston on 07/02/2013

in Business,Politics,Technology

Rural Kenya

On a tour of countries in Africa this week, President Obama has announced a new Power Africa initiative that aims to double access to electricity in sub-Saharan Africa.

Obama has stated that it’s unacceptable to the United Sates that over two-thirds of the population is still without electricity, and in rural areas 85% of people do not have access. These are indeed shocking stats for those of us living in more technologically developed countries, and that situation does need to be addressed. However, we all know that nations do not just commit billions and billions of dollars in funding without aiming for some sort of return on investment – especially when there are huge levels of public debt still in their domestic economic systems. That’s just the way the world works. So, all due altruism taken into account and put aside for a moment, what else might be in it for Uncle Sam and other Western interests in Africa?

Africa currently has some of the fastest growing economies in the world. The Power Africa initiative calls for over $7 billion in U.S. funds over five years to help build new power plants in six African nations, which will bring power to over 20 million households and businesses. It’s no secret that it’s also intended as a way to help U.S. corporations get a foot in the door of Africa. The government intends to partner with the private sector, which has already committed over $9 billion to investment funding. 7 companies are listed on the Power Africa fact sheet as development partners, including General Electric. According to the White House it will require around $300 billion in investments for sub-Saharan Africa to achieve full access to electricity by 2030.

Obama has also said that the initiative will support clean energy. At the same time, it is acknowledged in the White House statement that Africa has vast reserves of oil and gas, as well as good potential for geothermal, hydro, wind and solar.

Down the bottom of the fact sheet, in the “Transparent Natural Resource Management” section, it is stated that, “recent discoveries of oil and gas in sub-Saharan Africa will play a critical role in defining the region’s prospects for economic growth and stability, as well as contributing to broader near-term global energy security”. It is also maintained that existing infrastructure in the region is inadequate. The Power Africa initiative aims to “work in collaboration with partner countries to ensure the path forward on oil and gas development maximizes the benefits to the people of Africa, while ensuring that development proceeds in a timely, financially sound, inclusive, transparent and environmentally sustainable manner”.

Apart from the obvious issues with the environmental sustainability of exploiting vast, new oil and gas reserves, I’m sure we all hope that all these new developments, including electricity developments, do actually maximize the benefits to the people of Africa, and don’t turn out to be a contemporary form of colonization.

This is a criticism that has been levelled at other recent commercial developments in Africa, including the buying up of cheap, fertile farmland by big institutional investors and governments. In a world with an expected population of 9 billion (now over 7 billion) within a few decades, that previously economically undervalued and unindustrialized farmland in Africa is set to become highly valuable and profitable. It has been said that developments have been executed in a way that the people of Africa may not see the maximum economic benefits.

Of America’s other ambitions in Africa, despite the history of America’s recent concerns with extremist groups in Africa, Obama has said that he rejects “this notion that we want to somehow expand our military reach”. He cited America’s end of the war in Iraq and the plan to end the war in Afghanistan as evidence of this. In relation to terrorism, Obama has also acknowledged that terrorist groups are “doing great harm in Africa and in the Middle East and in South Asia”, and that “the problem has metastasized”.

Another obvious factor in America’s interest in Africa is the fact that rival China has been investing significantly throughout Africa in recent years, including in farmland and communications infrastructure. China has reportedly moved ahead of the United States as Africa’s biggest trading partner. However, CNN reports that Obama has publicly applauded China’s investment in Africa, saying he is “not threatened by it”.

Obama has suggested that Africa’s increased integration into the global economy will benefit everyone, with the potential creation of new jobs and opportunities. He has urged African leaders to make sure that those who invest in Africa and its vast natural resources benefit Africans in terms of jobs and other assets.

Image CC licensed by CIAT: Rural Kenya


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