President Obama at the US–Africa Leaders’ Summit

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US to help set up $100bn fund for African development

6 August 2014 | By Joe Quirke | 0 Comments

President Obama is expected to use his speech to the US–Africa Leaders’ Summit today to announce the formation of a $100bn fund to provide capital for industrial, infrastructure and energy projects.

Half of the money will be provided by the 40 African nations who are attending the gathering and half will come from the US, much of it from the private sector. The Obama administration said $900m worth of deals were expected to be concluded at the summit. 

The World Bank estimates that each year Africa spends about $50bn less than it should on energy and transport.

Dipuo Peters, South Africa’s transport minister, said: “There’ll always be a need for infrastructure funding. The terms and conditions still need to be worked out and that will determine South Africa’s response.”

South Africa is also looking for an extension of the African Growth and Opportunity Act, which gives preferential trade terms to African nations. South Africa’s exports to the US have more than doubled since 2000, when the act was implemented. 

One reason the US has invited most of Africa’s heads of state to Washington (the exceptions are Zimbabwe’s Robert Mugabe and Sudan’s Omar al-Bashir) is partly to try to counter China’s increasingly close association with the continent. 

Beijing has concluded a series of intergovernmental deals that have paved the way for investment in massive infrastructure and construction projects in return for Chinese access to the continent’s energy resources and raw materials. 

More than a million Chinese citizens are now living and working in Africa. Speaking to the Economist magazine last week, Obama said: “My advice to African leaders is to make sure that if, in fact, China is putting in roads and bridges, number one, that they're hiring African workers; number two, that the roads don't just lead from the mine to the port to Shanghai, but that there's an ability for the African governments to shape how this infrastructure is going to benefit them in the long term.”