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Billion dollar deals expected at Africa summit

Washington – The US will announce nearly $1bn in business deals, increase funding for peacekeeping and commit billions of dollars to expanding food and power programmes in Africa during a summit this week, development and US officials say.

US officials said the summit starting on Monday in Washington of nearly 50 African leaders hopes to showcase their interest in the fast-growing region through a series of government-private partnership deals to boost trade and investment.

The spread of the deadly Ebola virus in Liberia, Guinea and Sierra Leone is also a reminder of the vast development needs that persist in some of the region’s poorest countries despite rapid economic growth and investment.

China threat

Administration officials have played down questions over whether the summit is in response to China’s growing presence in the region. Instead, they have emphasised American interests go beyond Africa’s oil and minerals, where China is focused.

“You will see a series of announcements on agriculture and food, and power and energy,” Rajiv Shah, the administrator of the US Agency for International Development (USAid), told Reuters. “We will make big announcements that demonstrate these are big ambitions we can take on with our African partners and the private sector.”

Energy boost

Shah said there will be new support for Power Africa, a privately-funded programme launched by US President Barack Obama last year to install 10 000 megawatts of new generation capacity and connect 20 million new customers across Africa by 2018.

The programme had already met that goal after just one year, Shah said. “Next week we will announce a more than doubling of our aspirations,” he added.

Shah said while companies pledged $7bn to the programme last year, next week “we will be in excess of $20bn” in new investments. The World Bank is expected to make a major contribution toward the programme, according to Bank officials.

The programme is also likely to be expanded from the six nations – Ethiopia, Kenya, Ghana, Liberia, Nigeria and Tanzania – that currently benefit from Power Africa.

Food and farms

There will also be significant increases in private sector support for US-backed food and agricultural programmes in Africa, including the New Alliance for Food Security and Nutrition, development officials said.

The programme was launched in 2012 to bring together African governments, the private sector and donors to boost investment in agricultural production after a massive 2008/09 food price crisis, which sparked unrest in developing nations.

An announcement worth billions of dollars by a large US beverage company is expected to boost purchases from African farmers, according to one official, who declined to elaborate.

African growth act

The summit will include a business conference on Tuesday bringing together African leaders and American CEOs.

US commerce officials said close to $1bn in various business deals will be announced covering different sectors and involving several African countries.

Trade ministers will spend a day discussing ways to improve the US trade programme with Africa, known as the African Growth Opportunity Act, or Agoa, which gives African countries duty-free access to US markets. Agoa expires in September next year and will need congressional approval for renewal.

In other funding increases, the State Department is expected to announce a further $60m a year for peacekeeping training in six African countries, according to US officials.

Source – Fin24