Obama to unveil $17 billion in US corporate investments in Africa

Former New York mayor Michael R. Bloomberg speaks during the US-Africa Business Forum on the sidelines of the US-Africa Leaders Summit in Washington, DC, on August 5, 2014. US companies are planning US$14 billion worth of investments in Africa, a Whi
Former New York mayor Michael R. Bloomberg speaks during the US-Africa Business Forum on the sidelines of the US-Africa Leaders Summit in Washington, DC, on August 5, 2014. US companies are planning US$14 billion worth of investments in Africa, a White House official said Tuesday as Washington seeks to strengthen commercial ties during the historic US-Africa Leaders Summit. With the United States seeking to counter the Chinese and European trade dominance in Africa, a White House official said the investments will span a range of industries, including construction, clean energy, banking, information technology, and others. -- PHOTO: AFP 

WASHINGTON (REUTERS) – US companies pledged new investment in Africa on Tuesday as part of US$14 billion (S$17.5 billion) in construction, clean energy, banking, and information technology projects to be unveiled by US President Barack Obama at an event showcasing US economic interest in the fast-growing region.

Business leaders told the US-Africa Business Forum they wanted to seize opportunities in the region, home to six of the world’s 10 fastest growing economies, although some said they may have been 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 General Electric chief executive Jeff Immelt, who on Monday announced a US$2 billion investment in infrastructure and worker skills.

The forum, part of a three-day Africa summit in Washington, will allow dozens of African heads of state to mingle with US and African executives and spotlight projects to improve infrastructure, finance, supply chains and energy security.

Dangote Group president Aliko Dangote, announcing plans to invest US$5 billion in energy projects in sub-Saharan Africa jointly with Blackstone Group funds, said nothing worked if there was no power.

The group counts cement making, flour milling and sugar refining among its activities.

Mr Dangote called for US export credit agency, the Export Import Bank, to remain open, praising its support for African companies buying US goods.

The World Bank forecasts Africa’s economic growth will accelerate to more than 5 per cent in 2015 and 2016 but estimates one in three Africans, or 600 million people, need electricity.

World Bank President Jim Kim announced US$5 billion in financing and investment guarantees for Power Africa, a privately funded programme to install 10,000 megawatts of new generation capacity and connect 20 million new customers across Africa by 2018.

Walmart chief executive Doug McMillon said the retailer had faith that regional governments would work to ensure a secure business environment and rule of law.

Walmart’s US$2.6 billion investment in the region in 2011, when it bought a majority stake in local Massmart Holdings, was “just the beginning,” he said.

Walmart believes “the whole region, not just South Africa, but sub-Saharan Africa, including Nigeria and Kenya and so many countries around the continent, are going to do the right things to create the right rules, create transparency, some of those infrastructure investments so that the whole thing works.”

More than 90 US companies are slated to participate including Chevron, Citigroup, Ford Motor, Lockheed Martin, Marriott International and Morgan Stanley.

Many already have a foothold in Africa.

Mr Obama will take part in a discussion with corporate chief executives and government leaders at the event, and will unveil the total pledged in new investment.

“These investments will deepen US economic engagement in Africa, fuelling growth that will support broader African prosperity and emerging markets for US businesses, which will support jobs in both the United States and Africa,” a White House official said on Monday, in a preview of Mr Obama’s remarks.

Former New York mayor Michael Bloomberg and former US president Bill Clinton also attended the event.

US Commerce Secretary Penny Pritzker welcomed financial commitments by US firms.

“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,” she said

“Make no mistake: our economic and commercial partnership is a two-way street. Goods and services exports from the United States to African markets support roughly 250,000 jobs here at home.”