New York
AS the dust settles after the US-Africa Leaders’ Summit that took place in early August in Washington, a clearer picture is emerging of what it achieved.
Some 45 Africa heads of state showed up as well as hundreds of business leaders from the continent. For several days, the US capital was abuzz with all things Africa. Barely a hotel in central Washington seemed to be without at least one presidential delegation among its guests.
Some had suggested that President Barack Obama’s decision not to hold a one-on-one meetings with each of the visiting heads of state would prove to be a diplomatic disaster. It wasn’t. There were some street protests but no significant disruption. Even the weather cooperated — it was hot but not stifling — and the anticipated traffic chaos failed to materialise.
Given the aim of the summit was to raise awareness among American businesses of the opportunities available in Africa and to create a forum in which US and African businesses and policymakers could meet, the event could be considered a success.
A flurry of deal announcements during and around the summit demonstrated that at least part of corporate America is taking Africa’s potential seriously. Estimates of the value of investments pledged during the summit vary widely and, surprisingly, President Obama’s own estimate of $14 billion (M149 billion) is not the highest.
Figures released later by the summit organisers assessed the total value of pledges at around $33 billion (M351 billion), including loans, credit guarantees, direct investments and joint ventures.
Among many of the participants in the summit, though, there is a clear consensus that the success or otherwise of the event will be measured not by the amount of money pledged during the weeklong blitz of conferences, dinners, breakfast briefings and side-events and but by the strength and durability of the relationships forged.
Alain Ebobisse, the global head of the International Finance Corporation’s InfraVentures group, says: “The summit created an unprecedented level of excitement about the business opportunities in sub-Saharan Africa. That’s positive — now that has to be translated to real projects on the ground and real financing commitments that could be allocated to projects.”
Jim Benintende, president for Middle East and Africa at auto company Ford, says the summit provided unrivaled opportunities to make and build relationships within Africa: “[We] were able to meet with so many different government delegations at a single event. It would have taken months to travel to and arrange the same kind of high level meetings throughout Africa.”
Perhaps more importantly, says Benintende, the unofficial meetings that took place on the fringes of the summit helped attendees make some useful connections.
The deals sealed in DC, though are not insignificant, as US Commerce Secretary Penny Pritzker, one of the co-organisers of the US-Africa Business Forum — a day-long event that immediately preceded the presidential summit — notes: The forum “was a catalytic event. We announced $14 billion in deals at the forum, which is a real recognition that there are tremendous opportunities in Africa. This is just the beginning of what we expect will come from bringing together African heads of state and government leaders, and American and African CEOs.”
One of the surprise winners during the summit was Power Africa, President Obama’s year-old initiative to the US private sector to invest in helping six African countries — Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania — make much-needed improvements to their electric power infrastructure. In the year since its inception, Power Africa had attracted as much criticism as praise, with sceptics questioning whether the investments pledged at the launch of the initiative would ever be delivered.
Another key criticism is that Power Africa is too limited to enable the US to reap diplomatic and commercial dividends from it.
None of that seems to have dented supporters’ enthusiasm for Power Africa. During his presentation at the US-Africa Business Forum, the World Bank’s president Jim Yong Kim announced, almost as an aside, that the multilateral lender would be committing an additional $5 billion (M53 billion) in loans to Power Africa.
The prior week, London-based emerging market banking giant Standard Chartered revealed that it would be more than doubling its commitment to Power Africa from $2 billion to $5 billion.
Global banking giant Citi also upped its commitment to Power Africa, pledging to “source $2.5 billion in incremental capital” for the initiative. As well as attracting money to the power sector in Africa, the chief executive of Citi EMEA, Jim Cowles, says: Power Africa “will accelerate the development of the local capital markets.”
Two giant private equity firms, and Carlyle, joined the fray with a commitment of up to $5 billion to invest alongside Africa’s richest man Aliko Dangote in power projects across sub-Saharan Africa.
Eliot Pence, a director at Washington D.C.-based strategy firm McLarty Associates, believes the Dangote deal is syptomatic of a key theme of the summit: the number of big announcements involving African multinationals. Citing Ghanaian financial services firm, Fidelity’s deal with IBM and an announcement that Transnet, South Africa’s state-owned port, rail and pipeline company would be buying new locomotives from General Electric, Pence says: “The big story isn’t America finds Africa. The big story is Africa finds America.”
Mr. Ebobisse agrees, to an extent: “Africans were certainly positively surprised about the increased interest from American business in the continent,” he says. “But it was really the American business realizing there are a lot of opportunities there. I saw a lot of American businesses saying, ‘OK, we’re taking this seriously now.’” – WSJ
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