“We are also working together to attract additional private investment, and to secure financing for renewable-energy projects. In addition our commercial-law experts are creating a library of documents to help streamline the process for negotiating and closing agreements and transactions under Power Africa. In Abuja, we will hold a workshop to increase the use of these documents among utilities and regulators,” she added.
In June this year, just a year after Power Africa, the US has launched a new initiative called Beyond the Grid, which is designed to boost energy access in Africa, especially in areas lacking energy connections. Twenty-seven investors are committing over $1bn to small-scale and off-grid energy solutions.
“Beyond the Grid will help to expand the work the US government is already doing through Power Africa to bring electricity to citizens of sub-Saharan Africa,” said US Energy Secretary Ernest Moniz.
“With close to 600m people without access to modern-day electricity, it is clear that centralised grid access is not a comprehensive solution for these countries in one of the world’s least urban continents. But through solutions including off-grid and small-scale energy projects, we can bring electricity to these rural areas.”
The US is also driving forward other economic initiatives with Africa. One is the African Growth and Opportunity Act (AGOA). AGOA is an agreement that came into force under the Bill Clinton Presidency in 2000 and it has been maintained by subsequent presidents.
AGOA allows 6,400 sub-Saharan African products to enter the country tariff free. The objectives of AGOA are to expand US trade and investment with Africa, and encourage Africa’s economic growth and integration, as well as Africa’s integration into the world economy.
“We are pushing for the seamless renewal of the African Growth and Opportunity Act, of which Nigeria is the top beneficiary,” said Pritzker in May, adding that she hoped Nigeria would use AGOA as a tool through which to diversify its economy which is mainly focused around the oil industry.
The Commerce Secretary also announced that her department is increasing its human resources in Kenya, Ghana, Libya and Morocco.The commerce department is to open its very first offices in Mozambique, Angola, Ethiopia and Tanzania.
The US is also keen to push forward with its Presidential Ambassadors for Global Entrepreneurship campaign in Africa – a group of 11 high-profile US entrepreneurs who are promoting entrepreneurship worldwide. “Africa will be an ongoing focus for this high-profile group,” said Pritzker.
Natural resources drive US interest
US’s renewed interest in Africa, and the economic opportunities it offers, is ultimately down to the powerful economic growth that the region has started to enjoy. Africa is experiencing faster growth on that front than any other region in the world. It is set to enjoy over 5% growth in 2014.
More than a third of African countries have growth rates exceeding 6%, according to the African Development Bank. Africa’s middle class is also growing with 350m people in the region now earning up to $20 daily.
By 2012, the number of middle-income countries in Africa had reached 26 out of 54 countries. Based on data from 2001–2010, six of the 10 most rapidly growing economies in the world are in sub-Saharan Africa.
McKinsey Global Institute also predicts that African consumers in sectors ranging from tourism and financial services to telecoms will generate over five times as much revenue as natural resources by 2020, even though the latter is often seen as the exclusive driving factor of African wealth.