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US-Africa summit garners over $17 billion in investment pledges

Wednesday, 6 August 2014 - 9:00am IST | Place: Washington | Agency: Reuters
  • Reuters

African leaders on Tuesday called for a deeper economic relationship with the United States, hailing investment pledges totaling more than $17 billion at a Washington summit as a fresh step in the right direction.

US and African companies and the World Bank pledged new investment in construction, energy and information technology projects in Africa at the US-Africa Business Forum, including several joint ventures between US and African partners.

"The United States is determined to be a partner in Africa's success," President Barack Obama said in a speech at the forum. "A good partner, an equal partner, and a partner for the long term."

The US president also urged African officials to create conditions to support foreign investment and growth. "Capital is one thing, development programs and projects are one thing, but rule of law, regulatory reforms, good governance, those things matter even more," he said.

African leaders said they were optimistic of becoming full partners in a relationship worth an estimated $85 billion a year in trade flows, as US business leaders eyed opportunities in the region, home to six of the world's 10 fastest-growing economies - even if they might be late to the party.

"We gave it to the Europeans first and to the Chinese later, but today it's wide open for us," said the chief executive of General Electric Co, Jeff Immelt, who on Monday announced $2 billion to boost infrastructure, worker skills and access to energy.

Tanzanian President Jakaya Kikwete said Africa wanted to move away from a relationship of "aid donor and aid recipient" to one of investment and trade. Kikwete told the forum that with Obama and senior officials encouraging the business community "to take Africa seriously, I think this time we will make it."

More than 90 US companies participated in the forum, part of a three-day summit which has brought almost 50 African leaders to the US capital, including Chevron Corp Citigroup Inc, Ford Motor Co, Lockheed Martin Corp, Marriott International Inc and Morgan Stanley.

Many already have a foothold in the region, which is expected to have a larger work force than China or India by 2040 and boasts the world's fastest-growing middle class, supporting demand for consumable goods.

The Coca-Cola Co African bottling partners in new manufacturing lines and equipment, as well as safe water access programs, over six years, and the chief executive of IBM, Ginni Rometty, said the IT giant would plow more than $2 billion into the region over seven years.

Still, Aliko Dangote, the president of Nigeria's Dangote Group, whose operations include cement making, flour milling and sugar refining, said nothing works without adequate power.

Dangote signed an agreement to jointly invest $5 billion in energy projects in sub-Saharan Africa with Blackstone Group funds, also calling for the US Export-Import Bank to remain open to support African companies buying US goods.

The World Bank, which committed $5 billion to support electricity generation, estimates that one in three Africans, or 600 million people, lack access to electricity despite rapid economic growth expected to top 5 percent in 2015 and 2016.

Obama took part in a discussion with corporate chief executives and government leaders at the event, also attended by US Commerce Secretary Penny Pritzker as well as former President Bill Clinton and former New York Mayor Michael Bloomberg.

"These deals and investments demonstrate that the time is ripe to work together as partners, in a spirit of mutual understanding and respect - to raise living standards in all of our nations and to address the challenges that impede our ability to develop closer economic bonds," Pritzker said.

African telecoms billionaire Mo Ibrahim encouraged US businesses to invest in Africa and make money, but also said they should "pay their taxes."




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