US government pushes for further investment in Angola

jbdodane Angola citycentreThe Obama administration is pushing to boost U.S. investment in Angola as it moves forward with a continent-wide initiative to increase access to electricity

U.S. secretary of state John Kerry led the drive on a visit to Luanda that included a tour of General Electric oil services facilities at the capital's port.

"We’re standing in a place of enormous economic activity with great promise for future economic growth and development," Kerry said. "When I look out at the economic energy out here in the port in all these containers and these ships and the work that you’re doing, I am confident that Angola, working together as you are now, will be able to help contribute to an extraordinary journey in Africa as a whole, and we will provide greater opportunity to everybody."

Angolan foreign minister Georges Chikoti said he and secretary Kerry focused on the "positive growth" of U.S.-Angolan diplomatic and commercial ties.

"We touched on not only petroleum but other credits such as the recent $600mn credit given by the Exim bank so that we could buy more Boeing planes, and we look forward to greater economic relations and other relations in the future."
That credit is part of more aggressive U.S. funding for Africa that has grown from six per cent of the portfolio of the Overseas Private Investment Corporation (OPIC) to 25 per cent, now topping US$4bn.

"We’re working with everything from really big companies like General Electric, who are investing in everything from wind to biomass to medical facilities, all the way down to individual diaspora investors who are investing in one-room school buildings," stated OPIC CEO Elizabeth Littlefield.

With the number of African households with disposable income expected to double over the next ten years, she says the continent is "reaching that tipping point when people stop paying just for subsistence and start buying cell phones and televisions and refrigerators."

"You have more Africans getting educated in the US now and coming home rather than staying in the U.S.," Littlefield said, "an incredible number of super-dynamic young people equipped with hard, real-world skills educated abroad, coming back to try their hand at making money on the continent."

With total U.S.-Angola trade last year topping US$10bn, assistant U.S. Trade Representative for Africa Florie Liser stated Luanda is one of Washington's most important sub-Saharan partners.

"American exports to Angola are a strong example of how the Obama Administration is emphasizing trade as a key way to unlock economic opportunity, strengthen the middle class, and benefit our partners abroad," Liser said."We are charting a path forward that will strengthen our economic engagement and create jobs for Americans and Angolans alike."
Machinery and poultry top U.S. exports to Angola while Angolan exports to the U.S. continue to be dominated by more than US$8bn of crude oil. Investors say that and imbalance is partly the result of obstacles to obtaining permits and licenses in a country that the World Bank ranks as one of the world's most time-consuming countries to start a business.

OPIC CEO Littlefield says African governments are under pressure from other developing markets competing for foreign investors.

"You can make a beautiful show and get them to come in by performing well on some measures, but then you’ve got to stay on top of it and make sure that they’re treated well and have a good experience over the long run because investors that come in and then get frustrated are almost a worse advertisement than investors that don’t come in the first place."

On his week-long trip to Angola, Ethiopia, South Sudan, and the DR Congo, Kerry praised African Union efforts to highlight the corrosive impact of corruption, saying it is "a responsibility for citizens in Africa and in all nations to demand that public money is providing services for all, not lining the pockets of a few."
He says tackling corruption and illicit financial flows lifts government balance sheets and attracts greater investment.

"Transparency and accountability create a more competitive marketplace, one wheremideas and products are judged by the market and by their merits and not by back room deals or bribes," Kerry says. "That’s an environment where innovators and entrepreneurs can thrive."

It is that private sector investment that anchors the Obama administration's Power Africa initiative to add 10,000MW by 2018 with grid-connected utility-scale power for urban areas as well as off-grid, smaller-scale solutions for rural areas such as biomass, solar, and wind.

"For most of the world, electricity allows businesses to flourish, clinics to store vaccines, and students to study long after dark," says USAID administrator Rajiv Shah.

"But for more than two-thirds of the population of sub-Saharan Africa, these opportunities simply do not exist."

"The public-private partnerships created by this legislation will support Africa’s energy development, create jobs and strengthen its consumer base to be stronger trading partners with America," says National Rural Electric Cooperative Association CEO Jo Ann Emerson. "Access to safe, reliable, and affordable electricity for millions of Africans will remove barriers to economic development." 

Scott Stearns

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
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