ashleefreelon.weebly.com€¦ · web view6/8/2014 · wednesday, august 6, 2014 articles...
TRANSCRIPT
Wednesday, August 6, 2014
Articles Mentioning MCC
Dipnote
Blog Post
By Dana J. Hyde
Ghana - Investing in Africa's Future, Lifting People Out of Poverty
August 5, 2014
Democracy Speaks
Blog Post
By Mark Green
Ghana - Energy is Helping to Make Africa’s Promise into Reality
August 5, 2014
The Hill
Op-Ed
By former Rep. Jim Kolbe (R-Ariz.)
MCC - The Millenium Challenge Corporation is moving forward
August 6, 2014
The Hill
ALS - Obama announces $12B in new aid to Africa power sector
August 5, 2014
Reuters
Ghana - U.S. signs $500 mln pact to boost Ghana's energy sector
August 5, 2014
New York Times [see link below for video]
ALS - A Who’s Who of the U.S.-Africa Summit
August 6, 2014
Bloomberg TV [see link below for video]
ALS - Cretz: Not Too Late for U.S. Firms to Enter Africa
August 4, 2014
Washington Post
ALS - Obama announces more investment in Africa by U.S. firms during leaders’ summit
August 5, 2014
Politico
ALS - Barack Obama touts Africa deals in U.S. catch-up game
August 5, 2014
Center for Global Development
Ghana - Power Africa Gets a Boost with MCC’s Ghana Compact
August 6, 2014
Business Ghana
Ghana - Momentum gathering in Power Africa initiative across Africa
August 6, 2014
Citi FM
Ghana - U.S., Ghana sign compact to transform power sector
August 5, 2014
Ghana Broadcasting Corporation
Ghana - Ghana Signs New MCC Agreement Of $498 million to Help Improve Energy Sector
August 6, 2014
Ghana Web
Ghana - GAF’s $300M loan facility in limbo
August 6, 2014
TIME
ALS - Obama Hosts 51 African Leaders Amid Grumbling Over His Record
August 5, 2014
Spy Ghana
Ghana - Ghana’s Energy Woes To Be Over Soon
August 5, 2014
Foreign Policy
Op-Ed
By Gordon Adams
Africa – The Great Security Shift
August 5, 2014
Scientific American
Op-Ed
By Lisa Friedman and ClimateWire
Africa - Africa Needs Fossil Fuels to End Energy Apartheid
August 5, 2014
Voice of America
Ivory Coast - Ivory Coast: US-Africa Summit Platform to Attract Investors
August 5, 2014
The White House
AGOA - FACT SHEET: Investing in African Trade for our Common Future
August 4, 2014
The White House
Food Security - FACT SHEET: U.S.-African Cooperation on Food Security
August 4, 2014
The White House
Africa - FACT SHEET: Powering Africa: Increasing Access to Power in Sub-Saharan Africa
August 5, 2014
Reuters
Op-Ed
By Jeff Mason and Lesley Wroughton
POTUS - Shadowed by Bush, Obama seeks Africa legacy makeover
August 6, 2014
Christian Science Monitor
Op-Ed
By Mike Allison
El Salvador - El Salvador struggles to keep business investment at home
August 5, 2014
New Media
Storify for Ghana Power Compact Signing
https://storify.com/MCCgov/ghana-power-compact-signing
Articles of Interest
Al Jazeera
Op-Ed
By Nii Akuetteh
ALS - Obama's Africa summit: Why now?
Wall Street Journal
ALS - U.S., African Leaders Unveil Trade Deals at Summit
Washington Post
ALS - 2014 U.S.-Africa Leaders Summit
Wall Street Journal
Indonesia - Court Hears Prabowo Subianto's Challenge to Indonesia Election Results
Washington Post
Op-Ed
By Editorial Board
Immigration - Frustration over stalled immigration action doesn’t mean Obama can act unilaterally
Ghana Web
Ghana - Health Minister confident Ghana will never see Ebola
All Africa
Mozambique - President Guebuza Urges U.S. Companies to Invest
Zambian Watchdog
Zambia - Zambia in political crisis due to failed PF leadership- Chimbaka
Articles of Interest sent by DCO, DPE, A&F
Center for Democracy in the Americas
El Salvador - El Salvador Update
Thank you to Preston Winter in DCO for sending this along…
Articles Mentioning MCC – TEXT
Dipnote
Blog Post
By Dana J. Hyde
Ghana - Investing in Africa's Future, Lifting People Out of Poverty
The U.S.-Africa Leaders Summit is in full swing, and it couldn’t have come at a more opportune moment. Africa is on the rise. It has become the world’s fasting growing continent and a new center of global growth -- creating more opportunities for its people than ever before.
The United States has a deep interest in a peaceful and prosperous Africa, and the Millennium Challenge Corporation is excited to be playing a key role in helping African nations lift their people out of poverty.
The majority of MCC’s investments and partnerships over the past 10 years have been with African nations. Over the past ten years, MCC has invested nearly $6 billion in Africa -- more than 60 percent of its portfolio.
Because of these investments, more than 650,000 people have improved access to clean water, nearly 270,000 households have gained legal protections for their land, and almost 190,000 farmers have been trained.
But the numbers only tell part of the story. MCC selects partner countries that demonstrate a commitment to good governance, open markets, and investments in the well-being of their people. In doing so, MCC supports reform and solidifies relationships with countries that will serve as our allies and trading partners.
MCC recognizes that Africa’s success is good for Africa and good for America. It serves our shared security interests, increases prosperity for our countries and reflects a shared commitment to the dignity, well-being, and freedom of all people.
Today, MCC will be launching its newest and perhaps boldest investment to date -- a five-year, $498 million compact to transform the Ghanaian power sector, helping the country provide a safe, reliable and affordable source of power to households and businesses. This will grow its economy, create jobs, and empower Ghana to sustain its progress and growth.
The compact is the largest U.S. Government transaction to date under Power Africa, President Obama’s initiative to double access to electricity in sub-Saharan Africa. I will join Ghanaian President John Dramani Mahama and Secretary of State John Kerry to sign this landmark compact, which represents MCC’s new approach to delivering effective development assistance -- incentivizing policy and infrastructure reforms that enable and leverage billions more in private sector investment.
The compact takes a system-wide approach to transforming Ghana’s power sector. It invests in projects focused on distribution to make Ghana’s energy sector financially viable and capable of attracting private investment, and it funds initiatives supporting greater energy-efficiency and cleaner renewable energy.
By investing public funds to create policy and infrastructure reforms, the compact is expected to catalyze at least $4.6 billion in private energy investment and activity from American firms in the coming years.
These investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive. By encouraging entrepreneurship and supporting the productivity of Ghanaian businesses, these investments will help generate economic growth.
Today’s signing is a win-win for the people of Ghana and the people of the United States who believe in a peaceful and prosperous Africa. President Mahama and I are proud to sign this investment with Secretary Kerry as a demonstration of the kind of 21st century U.S.-Africa economic partnership this week’s Summit represents.
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Democracy Speaks
Blog Post
By Mark Green
Ghana - Energy is Helping to Make Africa’s Promise into Reality
This week, Washington is once again making history: Nearly 50 African leaders are gathering for the first ever U.S.-Africa Leaders Summit. It’s a great opportunity to discuss Africa’s role as a new center of global growth and, just as importantly, how that role has been propelled by concrete gains in democracy, health, education, good governance and economic development.
As a board member of the Millennium Challenge Corporation, a personal highlight of the summit took place Tuesday at the State Department when I witnessed the signing of the MCC’s new compact with the Government of Ghana. This new $498 million agreement will boost efforts to tackle the country’s energy challenges by embracing a system-wide approach to reforming that country’s power sector. The compact is based upon the common sense (which means all too rare) notion that the key to producing reliable, affordable energy in Africa is not to merely build new plants or new distribution capacity, but to reform and remove impediments to greater private sector investment in power production. From streamlining the permitting process, to developing a scheme for consumer energy prices to more accurately reflect actual production and distribution costs, the compact seeks to foster Ghana’s energy independence.
This new compact is the biggest transaction to date under the U.S. Government’s Power Africa initiative. Power Africa seeks to double access to power in sub-Saharan Africa. By investing in policy and infrastructure reforms, the Ghana compact will be an important boost in the drive to reach Power Africa’s goal. It will catalyze as much as $4.6 billion in private energy investment and activity from American firms in the coming years.
I am excited about the MCC-Ghana partnership to invest in energy. Energy powers economic growth, and that’s good for business development on so many levels.
With power, teachers can tutor students well into the evening, and schoolchildren can learn fundamental skills to prepare them for the future.
With power, hospitals can save lives, and health is key to a productive workforce.
With power, farmers can irrigate fields and cool storage facilities that will allow them to boost their productivity and safeguard the quality of their yields, leading to higher prices in the marketplace.
And power is the fuel of business. Companies need access to reliable electricity to compete, trade and increase their bottom lines. When the private sector can work, it creates more jobs. Reliable electricity also gives American companies greater confidence to invest in the emerging Ghanaian economy.
This partnership isn’t one-sided. Ghana has demonstrated a commitment to getting the sector in order for the long haul. The government agreed to implement tough policy and regulatory reforms needed to sustain the industry and attract private investors.
This shows a commitment to getting the sector in order for the long haul—a commitment that will ultimately benefit Ghana and the United States.
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The Hill
Op-Ed
By former Rep. Jim Kolbe (R-Ariz.)
MCC - The Millenium Challenge Corporation is moving forward
This week, leaders from almost 50 countries across Africa are in Washington, D.C., for a summit that seeks to strengthen ties between their countries and the United States. It is also a chance to take stock of a small government agency that, for ten years now, has played a key role in connecting the United States to Africans and African markets.
It has been a decade since I worked in Congress to pass the legislation creating the Millennium Challenge Corporation. MCC represented a new approach to foreign assistance, and not everyone was confident of its success. It was designed with the singular mission, to reducing poverty by creating economic growth, and the model of assistance included selectivity, a business-like approach to choosing investments, a willingness to put partner countries in the driver's seat of development choices and a rigorous commitment to transparency and accountability. The approach sounded good in concept– but would it work?
MCC has now invested nearly $10 billion in partner countries and improved the lives of millions of people across the world. At the same time, by partnering with countries that demonstrate a commitment to governing fairly, respecting the rule of law and fighting corruption, MCC has helped to spread core American values and build important alliances. Countries throughout the world are reforming institutions, changing laws and improving how they operate in order to try to qualify for MCC assistance. One academic study ranked MCC’s scorecard for evaluating potential partner countries as the most influential tool around for encouraging policy reform.
At a time when Congress is more divided than ever, MCC has won bipartisan support on Capitol Hill. And while it was created during the George W. Bush administration, it has been embraced by the Obama administration as an example of smart, effective assistance.
MCC has worked around the globe, much of that work has been in Africa. Early on, some wondered whether African countries would meet MCC’s qualification requirements. In fact, the agency now has roughly two-thirds of its portfolio in Africa. MCC has spent nearly $6 billion on the continent to build roads, expand power grids, train farmers and help secure land rights. All of this money is tracked and invested in projects that will foster the kind of growth needed for the continent to realize its true potential as a trading partner and investment opportunity for U.S. companies.
Of course, not every investment has worked out as planned. In Mali, for example, an investment had to be terminated early because of a coup. To its credit, however, MCC has been forthcoming about challenges and transparent in releasing results and sharing lessons learned.
MCC got to share in the summit spotlight Tuesday, when it signed a $498 million investment with Ghana that signals a potential new direction for the agency. While some previous investments have covered different sectors, the Ghana Power Compact, as it is called, will focus on a single sector, energy, and its goal is ambitious.
The five-year grant—the largest U.S. Government-funded transaction under Power Africa—will take a system-wide approach to transforming the country’s power sector to make it financially viable and capable of attracting private investments. It also funds initiatives supporting greater energy efficiency and cleaner renewable energy to protect the environment.
Critical to the project’s, and Ghana’s success, the Ghanaians are making critical reforms to the sector—reforms that are giving American and global businesses greater confidence to invest. By frontloading those reforms, MCC has helped incentivize the sound economic policies that the country needs to attract the private sector and ensure lasting economic growth. That means opportunities for U.S. companies. MCC expects its investment to catalyze more than $4 billion in additional investments in Ghana’s energy sector from American firms over the coming years.
MCC still has many unanswered questions to deal with. Will it continue to focus on its pool of high-performing countries or will it seek new partners? Will it seek new approaches, such as regional investments or programs with sub-national entities? And will the Ghana investment succeed? Those of us who care about smart development will be paying close attention this week and in the years ahead as MCC tries to answer those questions, but the bold moves in Ghana show the agency has an interesting future ahead.
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The Hill
ALS - Obama announces $12B in new aid to Africa power sector
President Obama unveiled $12 billion in new pledges from the private sector and government institutions on Tuesday to help strengthen Africa's electric power infrastructure.
The new commitments to Obama's Power Africa initiative, which the president launched last year, bring total funding of the program to more than $26 billion, according to a White House fact sheet. The initiative is meant to make sure the continent adds 30,000 megawatts of additional capacity and expand access to electricity to at least 60 million households and business.
On Tuesday, new investors included the World Bank, which will commit $5 billion in direct financing, guarantees, and advisory services to Power Africa. The Swedish government is also contributing to the energy program.
Additionally, Secretary of State John Kerry and Ghana President John Dramani Mahama participated in a signing with the Millennium Challenge Corporation over a contract that will help Ghana overhaul its power sector.
In the compact, the U.S. foreign aid agency committed $498 million over the next five years to build Ghana's electric power sector and boost investments. It's the largest U.S.-funded compact of the administration's Power Africa initiative.
“The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy-efficiency and cleaner renewable energy," the CEO of Millennium Challenge Corporation, Dana J. Hyde, said in a statement on Tuesday. "These investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive."
Ghana's president praised the compact as a show of cooperation between Ghana and the U.S., adding that it would benefit millions in his country.
More than 600 million Africans are without a reliable electricity supply, Kerry said on Tuesday. That's nearly twice the population of the U.S.
According to the World Bank while Africa has an increasing number of fossil fuels and renewable resources they are not evenly distributed, resulting in rolling blackouts across some 25 countries in sub-Saharan Africa.
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Reuters
Ghana - U.S. signs $500 mln pact to boost Ghana's energy sector
The United States will invest nearly $500 million to modernize Ghana's power sector in a bid to help it attract private sector investment and double energy access on the African continent, the State Department announced on Tuesday.
Secretary of State John Kerry and Ghanian President John Dramani Mahama signed the Ghana Power Compact, the largest U.S. government-funded transaction of the Obama administration's Power Africa program.
Heads of state of most African countries are in Washington this week for the U.S.-Africa Leaders Summit, which aims to showcase U.S. interest in the continent through a series of government-private partnership deals to boost trade and investment.
The Millennium Challenge Corporation (MCC), the U.S. government's independent foreign aid agency, will provide the funding to create a "self-sustaining energy sector in Ghana by reforming laws and regulations needed to transform the country's power sector," according to the State Department.
"This new compact with the MCC demonstrates the growing cooperation between Ghana and the United States. It will benefit millions of our people and contribute immensely to the achievement of my 'Energy For All' objective," said Mahama, referring to Ghana's national energy plan.
According to the U.S. Agency for International Development, Ghana has 2,719 megawatts (MW) of installed generation capacity, an inadequate amount to serve a population of about 25 million and a major constraint to economic growth.
The new pact is expected to draw more than $4 billion in private energy investment from U.S. and global energy firms, improving management of Ghana's power system and making the power procurement process more competitive.
Ghana will invest $37.4 million of its own money into the initiative.
With compacts the United States is also developing with Liberia and Tanzania, the MCC will have invested $1 billion in support of the Power Africa initiative, which has committed $7 billion in investments until 2018.
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Washington Post
ALS - Obama announces more investment in Africa by U.S. firms during leaders’ summit
President Obama announced Tuesday that private companies are providing an additional $12 billion in aid to the administration’s electrification program for Africa, while U.S. firms will invest more than $14 billion on the continent in sectors including banking, construction and information technology.
The new pledges — which came during a day-long program at the U.S.-Africa Leaders Summit focused on business opportunities, trade and development — reflect some of the most concrete outcomes of this week’s gathering of nearly 50 African heads of state and government in the District. Speaking to delegates at the Mandarin Oriental Hotel, Obama said that this willingness to help Africa grow — rather than simply extract resources — is “what America offers” the continent.
“The United States is determined to be a partner in Africa’s success, a good partner, an equal partner and a partner for the long term,” he said.
Now boasting more than $26 billion in commitments, Power Africa aims to add 30,000 megawatts of additional capacity and expand electricity access to at least 60 million households and businesses. World Bank President Jim Yong Kim said Tuesday that his institution will commit $5 billion in direct financing, investment guarantees and advisory services to Power Africa, while the Swedish government is also contributing to the initiative. The U.S. government is adding $300 million a year to the initiative, which began as a $7 billion, five-year federal program in June 2013.
Tuesday’s announcements highlighted a dichotomy Africa now faces: Even as the administration touted the business opportunities beckoning there, experts and government officials say an adequate power supply remains the biggest obstacle to economic development.
More than 70 percent of Africans lack a reliable electricity supply. Power outages cost more than 5 percent of the gross domestic product in Malawi, Uganda and South Africa, according to Standard Bank, and between 1 and 5 percent of GDP in Senegal, Kenya and Tanzania.
Vera Songwe, a nonresident senior fellow in the Brookings Institution’s Africa Growth Initiative, noted that even rapidly expanding sectors, from Internet to mining and the service industry, are energy-intensive.
“So, for every place you turn on the continent, for production, we need power,” Songwe said.
Sen. Christopher A. Coons (D-Del.), who chairs the Senate Foreign Relations subcommittee on African affairs, said American chief executives have identified three primary obstacles to investment when it comes to Africa: “The physical infrastructure, the lack of transparency and the lack of electricity.”
“It’s really hard to refrigerate your products, to manufacture at any significant level, when you don’t have reliable electricity, and the vast majority of Africa does not have affordable, reliable electricity,” he added.
In a little more than a year since Obama launched the program during a visit to Africa, the initiative has spurred signed agreements that will generate 2,800 megawatts of electricity, while deals for an additional 5,000 megawatts are being negotiated.
The president called the response to the initiative overwhelming. “Today we’re raising the bar,” he said.
The administration has earmarked $1 billion of the program’s funds for off-grid and small-scale energy solutions over the next five years, which are overwhelmingly renewable. And Tuesday, Secretary of State John F. Kerry and Ghana President John Dramani Mahama oversaw the signing of a Millennium Challenge Corp. compact in which the independent U.S. foreign aid agency pledged to invest as much as $498 million over the next five years to help overhaul Ghana’s power sector.
At a breakfast meeting with reporters Monday, General Electric chief executive Jeffrey Immelt — whose company, along with Standard Bank, has a $350 million financing agreement for power projects in Africa — said the administration’s involvement has accelerated the pace of deals on the continent because it provides “a seal of approval” that reassures investors.
“Whenever the U.S. is even a small partner in a deal, it brings a lot of investors with it,” he said.
Still, lawmakers on Capitol Hill are pressing to institutionalize the initiative through legislation, a task that has become complicated in part because of the political debate on climate change. The administration funds Power Africa by taking money away from existing programs at the U.S. Agency for International Development, including ones supporting democracy and governance efforts on the continent.
House Foreign Affairs Committee Chairman Rep. Edward R. Royce (R-Calif.), whose bill to make the program permanent has passed the House by a wide margin, said the administration’s electrification effort “doesn’t have any real long-term strategy or oversight. Trying to get these projects up and running will take much longer than two years — longer than the administration’s clock.”
Coons, who has a companion bill in the Senate with Sen. Bob Corker (R-Tenn.), said the reason to pass legislation in both chambers is “to send signals to our African partners, to the markets and to American investors that this is a sustained, serious and long-term intervention to support the development of a modern electricity infrastructure and generating capacity across more than a few of our principal allies in Africa.”
While Coons said he remained optimistic it would reach the president’s desk by the end of the year, he cautioned, “Any bill that touches on energy, on power generation, has become very difficult to get passed in this Congress because of the issues around coal and climate change.”
Even in the absence of a permanent program, African and American corporate executives made it clear this week they are eager to strike deals to expand Africa’s power sector. During a panel with Immelt and former president Bill Clinton on Tuesday, Aliko Dangote, president and chief executive of the Dangote Group, a Lagos-based business conglomerate, announced a $5 billion deal with Blackstone to invest in power and power infrastructure in sub-Saharan Africa.
“With this, we will definitely close the gap,” Dangote said. “There’s quite a lot of gap. We know about the gap, and it’s there, and we’re going to be very serious and very aggressive, and the two organizations will really make it work.”
At that point Immelt piped in. “Just remember who sells power-generating equipment,” he said to laughs, prompting Clinton to quip, “I should have been your agent.”
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Politico
ALS - Barack Obama touts Africa deals in U.S. catch-up game
President Barack Obama announced on Tuesday that the U.S. government, World Bank and businesses will invest a combined $33 billion in Africa’s economy, showcasing America’s economic ties to a continent where trade and investment are increasingly dominated by China and Europe.
Obama said the United States will finance $7 billion in business exports and investments in Africa, while U.S. companies have inked $14 billion in deals with the continent.
And the World Bank, Sweden and private sources have pledged another $12 billion in funding for Obama’s Power Africa energy initiative, bringing the electrification program’s total funding to $26 billion.
The pledges were the highlight of Obama’s three-day U.S.-Africa Leaders Summit, which brought nearly 50 African heads of state to Washington this week.
In a speech at the summit’s business forum on Tuesday, Obama pointed to a “new Africa that’s emerging,” with an exploding middle class, developing manufacturing and retail sectors, the fastest-growing telecommunications market and the world’s youngest population.
But he said the United States’ trade with the entire continent is equal only to trade with Brazil. The three African countries that trade the most with America are South Africa, Nigeria and Angola, and that’s mostly tied to oil.
“We’ve got a lot of work to do. We have to do better — much better,” Obama said. “I want Africans buying more American products and I want Americans buying more African products.”
The forum also featured former President Bill Clinton, business executives and African leaders, all of whom pointed to an economic relationship with room to grow.
“We kind of gave Africa to the Europeans first and the Chinese later. Today [it] is wide open for us,” said Jeff Immelt, General Electric’s chief executive officer.
The business forum was aimed at making up ground lost to China, which surged past the United States to become Africa’s top trading partner in 2009 and has since gained more than twice the U.S. share of two-way trade there. European and Chinese officials have held similar summits in recent years, with a particular interest in Africa’s natural resources.
Obama pitched the United States as a different kind of partner. “We don’t simply want to extract mineral from the ground for our growth. We want to build genuine partnerships to create jobs and opportunity for all our peoples,” he said.
In that vein, the U.S. government is pumping more than $7 billion into efforts to increase exports and investment in Africa, the president said.
That includes $3 billion in Export-Import Bank financing to promote U.S. sales there. The bank will help General Electric sell about $560 million in locomotives to Transnet, South Africa’s largest freight transporter, the White House announced.
In addition, the government’s Millennium Challenge Corp. is devoting $2 billion to new compacts in Africa aimed at spurring private-sector growth and poverty reduction, including almost $500 million over the next five years to help Ghana’s energy sector.
The Overseas Private Investment Corp. is committing $1 billion to finance and insure business investments in Africa, and the Agriculture Department will guarantee $1 billion in agricultural exports to the continent over the next two years.
The $14 billion in business commitments include deals in sectors such as banking, construction, clean energy and information technology.
Immelt and executives from IBM, Marriott and other leading corporations unveiled the specifics at the daylong event, where U.S. officials touted the business opportunities on a continent that is home to six of the world’s 10 fastest-growing economies.
General Electric announced it will pump $2 billion into Africa by 2018 to develop the facilities and skills training it will need to land more infrastructure and energy contracts there.
IBM, meanwhile, said it has struck a $100 million deal to handle information technology for Fidelity Bank of Ghana.
Obama’s Power Africa initiative, which is aimed at helping 600 million sub-Saharan Africans gain access to electricity, got a boost as well when World Bank President Jim Yong Kim announced $5 billion in financing guarantees for the project. The private equity firm Blackstone Group and business conglomerate Dangote Industries also vowed to invest $5 billion into African energy projects over the next five years.
Obama also announced the U.S. was increasing its annual commitment to $300 million, which, combined with a $1 billion pledge from Sweden, brought the program’s total commitments to about $12 billion.
The forum heard several pitches on trade measures favored by the American business lobby, including extending the charter of the Export-Import Bank, which finances sales in developing markets like sub-Saharan Africa, past September and renewing the Africa Growth and Opportunity Act, which waives import tariffs on products from the continent, before its expiration date at the end of fiscal 2015.
Support for the Export-Import Bank came from former President Bill Clinton, who said he has “heard more ridiculous things about the Ex-Im Bank in the last six months than I have in my adult life” and rebuffed a push by conservatives to abolish it.
“Economics is not theology, and if you’re running a country, you’ve got to try to create an opportunity for all your businesses to be competitive,” Clinton said while moderating a forum panel.
Tuesday’s forum also gave other obscure U.S. agencies like the Overseas Private Investment Corp. a chance to tout their roles financing several new deals.
Still, many of the more than 300 government officials and business executives in attendance acknowledged that the United States needs to catch up, with Clinton noting,“This is probably something we should’ve done a long time ago.”
Rosa Whitaker, a former assistant U.S. trade representative for Africa, called the summit “a defining moment in U.S.-Africa relations.”
“It really provides an opportunity for President Obama to really solidify his legacy on Africa, which he really couldn’t do in his first term,” Whitaker said. “Africa has been in America’s blind spot for too long.”
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Center for Global Development
Ghana - Power Africa Gets a Boost with MCC’s Ghana Compact
Yesterday, the Government of Ghana signed its second compact with the Millennium Challenge Corporation (MCC). The compact will provide up to $498m to help transform Ghana’s power sector. The Ghana compact is noteworthy for its focus, its link to Power Africa, its potential to catalyze private investment, and its unique (for MCC) structure to incentivize policy reforms. There are, however, some unknowns at this point about the link between some proposed investments and MCC’s commitment to results. We should applaud the signing of the Ghana compact, but it’s what MCC and the Ghanaian government do next that will help maximize its bang-for-the-buck.
What’s Exciting about the Ghana Compact:
· It’s focused. The Ghana compact focuses on one sector: energy. Early MCC compacts tended to be diffuse (Morocco’s first compact had over 30 distinct activities!) which contributed to implementation challenges. MCC’s recent move toward more streamlined compacts holds good prospects for easier coordination and smoother implementation.
· It’s the largest Power Africa transaction to date. Power Africa is the Obama Administration’s commitment to double access to electricity on the continent, using multiple interagency tools. MCC is also working on compacts with Liberia and Tanzania, other Power Africa focus countries, and they promise to be big too ($400-$450 million). But Ghana is the first.
· It leverages additional resources. Per MCC’s approach to second compacts, in which partner governments are expected to contribute funds toward the completion of compact objectives, the Ghanaian government is contributing $37 million. In addition, the compact’s investments and the government’s accompanying policy reforms are expected to catalyze over $4 billion in private investment from US and other businesses.
· Incentives for policy reform are built into the compact in a different way. A substantial portion of the available funds ($190 million) are conditioned on the Ghanaian government completing three agreed upon energy sector policy reforms within the first two years of the compact. While this conditionality approach doesn’t fit within the pay-for-performance framework of Cash on Delivery aid that MCC said it was potentially interested in exploring, it is a new(ish) approach for MCC (all compacts contain some element of pre-agreed policy reform requirements, just not with a second tranche so explicitly riding on them) and it will be interesting to see how it pans out.
The Unknowns I Have Questions About:
· The potential of some projects to achieve cost-effective results is still unknown. One of the key things that sets MCC apart from other donors is its use of cost-benefit analysis to identify projects that can reduce poverty and generate growth in a cost effective way. MCC’s general rule is that a proposed project must have an economic rate of return (ERR) above 10%. While most of the Ghana compact’s projects have sufficiently high ERRs, some projects’ ERRs haven’t been calculated yet. Wisely, MCC states that for one such project—focused on turning around the Northern Electricity Distribution Company (NEDCo), worth up to $54 million—it will fund investments beyond an initial $5 million in technical assistance only if activities with acceptable rates of return are identified. The bigger unknown relates to the potential $190 million second tranche of funds conditioned on policy reforms. MCC and Ghana have not yet identified the possible activities these funds would support. However, MCC has committed to spending this money if the Ghanaian government fulfills its policy reform end of the bargain, apparently regardless of whether it is possible to identify activities with acceptable rates of return when the time comes. MCC expects such activities to exist based on the economic analysis done for the currently planned work, but at this point, over 40% of the compact’s potential program funds are reserved for unknown activities with unknown rates of return.
· MCC’s commitment to learn from an “experimental” project is unknown. The compact’s $10m Access project will experimentally test the most cost effective approaches to eliminating the constraints of small businesses in getting access to electricity. Because the project will involve untested activities there was an insufficient evidence base to calculate an ERR. This kind of exception to MCC’s ERR requirement may make sense on a limited basis and for small value projects (which this is) in order for the agency to innovate and experiment, but these exceptions must be accompanied by rigorous evaluations to help inform future funding decisions. At this point, however, MCC says they are intending to explore the opportunity for rigorous evaluations and will see if the design can accommodate one. I wouldn’t expect a fully fleshed-out evaluation design at this point, of course, but I was looking for more firm signals from MCC that it will undertake a rigorous evaluation.
Given These Unknowns, Here’s What I Hope to See As the Compact Gets Ready to “Enter into Force” and As Implementation Begins:
1. Published ERRs for all activities whose rates of return are currently undetermined, including for the activities associated with the second tranche funding, if these funds go through;
2. An evaluation plan that commits to learning from the experimental Access project;
3. Public tracking of the Ghanaian government’s progress in meeting the policy conditions necessary to secure the second tranche of funding;
4. Willingness, on the part of MCC, to de-obligate funds, if:
a. It is not possible to identify activities with high enough ERRs to reach the full $54m value of the NEDCo Financial and Operational Turnaround project; and/or
b. The Ghanaian government does not meet its agreed-upon policy conditions for the second tranche of funds.
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Business Ghana
Ghana - Momentum gathering in Power Africa initiative across Africa
Standard Bank Group, Africa's largest lender by assets, has renewed its commitment to the Power Africa Initiative
Standard Bank Group,Africa's largest lender by assets, has renewed its commitment to the Power Africa Initiative, a multi-stakeholder project driven by US President Barack Obama, which aims to double access to power in Africa by significantly accelerating investment in the sector over the next five years. The US government has committed more than US$7 billion dollars in financial support to Power Africa over five years.
Power Africa aims to add more than 10 000 megawatts of cleaner, more efficient electricity generating capacity, and in the process electrifying at least 20 million new households and commercial entities with on-grid, mini-grid, and off-grid solutions. The six initial partner countries - Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania - have set ambitious goals to boost their power generating capacity with the ultimate aim of enhancing energy security, decreasing poverty and fostering economic growth.
"We are seeing an increasing pipeline of power projects across sub-Saharan Africa," said Mr Sim Tshabalala, Chief Executive of Standard Bank Group."In 2013 we committed to arrange funding of at least $150m of debt in the near term across the Power Africa countries, while more recently that amount has risen to over $400m, principally in Kenya and Nigeria, with smaller transactions in Ghana and Tanzania."
Standard Bank is using its extensive balance sheet and on-the-ground presence across 20 markets across sub Saharan Africa to help finance projects under the Power Africa initiative while at the same time actively leading the policy reform process required to facilitate increased private sector investment in Africa's power sector. The bank expects more than $1bn in commercial projects to be realised across the six Power Africa partner countries by 2018, and as much as $5bn when one includes the rest of sub-Saharan Africa.
"Standard Bank will strive to arrange or underwrite at least half of the debt required for these projects," said Mr Tshabalala. "As such, our commitment to Power Africa is to help fund an additional $600m of debt in the Power Africa countries through 2018, taking our total since joining the initiative a year ago to $1bn, and another $2bn across the rest of sub-Saharan Africa over the same timescale."
The Ghana Power Compact (GPC) is the largest US Government transaction to date under the Power Africa banner. The GPC takes a system-wide approach to Ghana's energy challenges with six projects across three areas: distribution, generation and access to energy.
The GPC also supports Ghana's efforts to mitigate climate change by funding major energy-efficiency initiatives and improving the investment climate for renewable energy. At the heart of the GPC is a strong commitment from the Government of Ghana to change the laws and regulations needed to transform its power sector and put it on a path to profitability and sustainability.
The Millennium Challenge Corporation (MCC) will invest up to $498m over the next five years, to support the transformation of Ghana's energy sector, helping the country provide a safe, reliable source of power to households and businesses. The Government of Ghana will contribute an additional $37m, bringing the total investment to $535m. This initial investment is expected to catalyse at least $4.6bn in additional private sector energy investment and activity from American firms in the coming years.
"Ghana is one of Africa's most dynamic and exciting economies and the GPC will make a significant contribution towards putting the country on a sustainable long-term economic growth path," said Mr Tshabalala. "Standard Bank will use its presence in Ghana and the rest of the continent to further support the Power Africa Initiative as well as other power projects across the continent."
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Citi FM
Ghana - U.S., Ghana sign compact to transform power sector
The Millennium Challenge Corporation signed the largest U.S. Government-funded transaction of President Obama’s Power Africa initiative—designed to double access to power on the African continent—with the Government of Ghana.
The Ghana Power Compact invests up to $498.2 million to support the transformation of Ghana’s electricity sector and stimulate private investment. Secretary of State John Kerry and President John Dramani Mahama of Ghana spoke at the compact’s signing ceremony, which was held during the U.S.-Africa Leaders Summit at the U.S. State Department in Washington, D.C.
The five-year compact is designed to create a self-sustaining energy sector in Ghana by reforming laws and regulations needed to transform the country’s power sector. The Ghana Power Compact is expected to catalyze more than $4 billion in private energy investment and activity from American and global energy firms in the coming years.
The compact will support improved management of Ghana’s entire power system, providing a more robust framework for private investment as well as a more competitive process for the procurement of power from independent producers. It will address challenges in distribution, generation and access to energy in Ghana. Ghana will invest $37.4 million of its own funds in the initiative making the compact a total investment of up to $535.6 million.
“MCC’s Ghana Power Compact takes a system-wide approach to transforming Ghana’s energy sector. The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy-efficiency and cleaner renewable energy. These investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive,” said Dana J. Hyde, MCC’s chief executive officer.
MCC will make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path, help the utility meet current electricity needs and upgrade infrastructure to reduce outages and improve service. A second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the compact.
“This new Compact with the MCC demonstrates the growing cooperation between Ghana and the USA. It will benefit millions of our people and contribute immensely to the achievement of my ‘Energy For All’ objective,” said John Dramani Mahama, Ghana’s president.
Thousands of micro-, small- and medium-sized businesses in Ghana, many operated by women, do not have legal access to electricity. The MCC compact will also provide funds to reduce the barriers to legal connections for these enterprises.
For Power Africa’s first, five-year phase, through 2018, the U.S. Government has committed more than $7 billion in financial support and loan guarantees, in addition to the expertise of 12 U.S. Government agencies. With the compacts it is developing with Liberia and Tanzania, MCC ultimately plans to invest about $1 billion to support Power Africa.
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Ghana Broadcasting Corporation
Ghana - Ghana Signs New MCC Agreement Of $498 million to Help Improve Energy Sector
Ghana has signed the Millennium Challenge Compact (MCC) of $498 million at the U.S.- Africa Leaders Summit at the U.S. State Department in Washington D.C on Tuesday.
The Minister of Finance Seth Terkper and the MCC Chief Executive Dana J. Hyde signed the new Compact agreement between the two countries.
President John Dramani Mahama speaking ahead of the signing said the new compact will help in improving Ghana's energy sector.
The five-year compact is designed to create a self-sustaining energy sector in Ghana by reforming laws and regulations needed to transform the country’s power sector.
The Ghana Power Compact is expected to catalyze more than $4 billion in private energy investment and activity from American and global energy firms in the coming years.
The compact will support improved management of Ghana’s entire power system, providing a more robust framework for private investment as well as a more competitive process for the procurement of power from independent producers.
It will address challenges in distribution, generation and access to energy in Ghana. Ghana will invest $37.4 million of its own funds in the initiative making the compact a total investment of up to $535.6 million.
“MCC’s Ghana Power Compact takes a system-wide approach to transforming Ghana’s energy sector.
The compact invests in projects focused on distribution to make the country’s power utility financially viable and capable of attracting private investment while it also funds initiatives supporting greater energy-efficiency and cleaner renewable energy.
Dana J. Hyde, said these investments will provide Ghanaian homes, schools and hospitals with the access to the reliable electricity they need to thrive.
MCC will make an initial investment of up to $308.2 million, including funding to put the Electricity Company of Ghana, the country’s main distribution company, on a sustainable path, help the utility meet current electricity needs and upgrade infrastructure to reduce outages and improve service.
A second tranche of up to $190 million in funds will be made available if Ghana accomplishes a set of reform targets set forth in the compact.
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Ghana Web
Ghana - GAF’s $300M loan facility in limbo
The $300 million loan facility approved by Parliament for the Ghana Armed Forces (GAF) is in limbo following sweeping economic sanctions placed on Russia by the European Union (UN) and the United States for their involvement in the Ukraine crisis.
Parliament after much opposition from the Minority in Parliament approved the $300 million loan facility being sourced from Russian bank, VTB Bank.
However, due to the conflict situation in eastern Ukraine, which is believed to be supported by Russia, EU governments have imposed sanctions on Russia, targeted at state-owned banks.
President Barack Obama joined the EU by cutting off three large banks, VTB Bank, Bank of Moscow and the Russian Agricultural Bank from the US economy.
This means that VTB Bank will in the interim be unable to fulfill its part of the deal by releasing the money to Ghana.
The loan will be used to secure arms for the nation’s security personnel who are on peacekeeping duties in Mali and Sudan.
The Minority vehemently opposed the approval of the loan, stating concerns ranging from due diligence, value for money and the position of the Attorney General regarding the loan among others.
A member of the finance committee of Parliament, Dr. Mark Osei Asibey Yeboah on Citi Fm's Eyewitness News disclosed that because Ghana has never had any dealing with VTB Bank; the Russian bank expected to pay the loan facility.
“When we asked for a due diligence report from the Bank of Ghana, it was inconclusive. The Bank of Ghana said they couldn’t vouch for the ability of VTB to fully conclude this deal,” he said.
The Member of Parliament (MP) for New Juabeng South said he feared Ghana’s involvement with Russia will have both political and financial risks.
He asked, “will they be able to fully conclude this deal?”
President John Mahama is in the US to sign an agreement between Ghana and the US government’s Millennium Challenge Corporation (MCC) for the release of 498 million dollars of the second compact of the Millennium Challenge Corporate.
Dr. Asibey Yeboah however believes if US discovers Ghana’s involvement with a state-owned bank in Russia on which there are sanctions, “there could be implications for us [Ghana].”
He stated that the $498 million will be released in tranches “so in the coming months, if the US sees that we are going ahead with such an agreement, will they hold on to some of these monies?”
According to him, the VTB Bank was not going to be able to pay the full amount agreed on and with the current sanctions, the bank could be cash-strapped therefore, in the coming months, it will be revealed whether the loan agreement will still hold or be aborted.
“If they don’t have the funds, certainly they cannot disburse…they were part lenders, and other lenders were going to give us the rest so now that they have faced some challenges… I will not be surprised if they write to Ministry and government that they are pulling out,” he remarked.
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TIME
ALS - Obama Hosts 51 African Leaders Amid Grumbling Over His Record
Putting aside Gaza, Iraq and other distractions, Obama focuses on legacy
Barack Obama came to office representing the hopes and dreams of an entire continent. His father, after all, came to America not in the cargo hold of a slave ship hundreds of years ago, but on an academic scholarship from his native Kenya in 1954: for many on the African continent, Obama was the cousin who’d made it big in America. His election was a symbol of hope, and that maybe help was on the way.
Obama stroked those expectations and rapture with the reissuing of his book in 2005, Dreams from My Father, and with a triumphal African tour in 2006, which sparked the first speculation that he might make a bid for the White House. But in his first term in office, Obama visited Africa only once, stopping at the tail end of his first international trip in Cairo deliver his speech launching “A New Beginning” with the Arab world and spending 24-hours in Ghana where he outlined the four themes upon which, he said, the future of Africa would depend: democracy, opportunity, health and the peaceful resolution of conflict.
Those four “pillars,” as he called them, went all but neglected for the next four years as Obama’s attention swung from domestic priorities like health care reform to crises in Syria, Ukraine and Iraq. So, now, as Obama turns an eye to legacy, he is hosting 51 African leaders at the White House this week for a summit. But legacy requires achievement, and Obama has left much undone in Africa.
To be fair, Obama had a tough act to follow. His predecessor George W. Bush created the Millennium Challenge Corporation to boost foreign aid and the Presidents’ Emergency Plan for AIDS Relief, or PEPFAR, where he invested $15 billion for AIDS drugs—a program universally credited for bringing down AIDS deaths in Africa. Bush also had a security vision for Africa, establishing military bases and a joint African command. He helped create an autonomous government in South Sudan in 2005 to stop the genocide in Darfur. And Bush expanded a free trade agreement created under Bill Clinton called the African Growth and Opportunity Act, or AGOA.
Under Obama—or, perhaps better said, the Republican cost-cutting Congress—Millennium Challenge funding has remained flat and PEPFAR has been cut from $6.63 billion to $6.42 bullion in fiscal 2013 and is expected to face another $50 million in cuts this year. South Sudan, whose independence America celebrated in 2011, fell into civil war this year after the U.S. neglected to appoint a special envoy for more than six months. And AGOA’s renewal remains stalled before a Congress full of members who want to rewrite it, or potentially kill it, much like the Export Import Bank, which finances most U.S. business on the continent.
While Obama did help intervene with NATO in Libya and sent special forces to Uganda in 2011 to hunt down the warlord Joseph Kony, who has yet to be found, Obama has otherwise taken a hands off approach militarily in Africa. In Somalia, he sent in seal team that took out an al-shabab leader but only after that group’s terrorist attack against a high-end Nairobi shopping mall attack, which killed 67 people from 13 countries. He declined to send troops into Mali with France but provided air support, but only after a terrorist attack on a gas plant in neighboring Algeria claimed the lives of three Americans.
“There were tremendous expectations,” says Carl LeVan, an African studies professor at American University, who has just written a book on Nigeria. “There were big expectations from some of the big emerging African players on the continent. What has emerge over time is an appreciation of the American presidency as a complex organization that speaks on behalf of a big country and not just one man.”
Obama second term African record has been better. Last year, he toured the continent with hundreds of business leaders in tow, touting American investment. His second national security adviser, Susan Rice, is largely credited with the U.S. intervention in Libya and has a long history with the continent, which she views as a priority. Ahead of that tour, Obama launched Power Africa, a $7 billion program to provide power to 20 million sub-Saharan Africans. He also started the Young Leaders’ initiative, which provides scholarships for young Africans to top U.S. universities.
Obama emphasizes how America’s innovation has helped Africa skip several steps of development. He points to the broad use of smart phones across the continent as evidence of how American innovation allowed Africa to skip poles and wires and still bring, not just phone service, but online global banking and Internet connectivity to the most rural of communities. America, he argued to The Economist last week, is “better than just about anybody else” at such applications of technology.
But America is no long Africa’s largest patron. As the U.S. is pivoting to Asia, Asia is pivoting to Africa. China’s investments in Africa surpassed those of the U.S. in 2010 and are now five times as big—$15 billion to U.S.’s $3 billion. China’s investment in the raw-resource laden continent is expected to reach as high as $400 billion over the next half century. While, Obama says “the more the merrier,” as he told The Economist, “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.”
To that end, Obama has a distinctly American message for African leaders. He has seized upon the conference to underline the power of democracy for emerging nations. It is not by accident that he invited so many former African leaders: a message to Africa’s many aging dictators that it’s okay to step aside and give someone else a chance. Obama has proven that he isn’t Africa’s savior, and there’s only so much he can do. “If there is any lesson regarding development and stability that has been consistent since the end of World War II and the colonial era,” says Anthony Cordesman, a top conflict analyst at the Center for Strategic and International Studies, “it is that we can only really help those states that are helping themselves.”
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Spy Ghana
Ghana - Ghana’s Energy Woes To Be Over Soon
Ghana’s energy woes may be over sooner than expected as the country is set to benefit from a $498 million investment earmarked to boost the production and supply of energy in the country.
The investment, which is the second compact under the auspices of the US government’s bilateral foreign aid agency, Millennium Challenge Corporation will be the second for Ghana after an earlier $547 million received to construct the N1 Highway popularly known as the George Walker Bush Highway as well guinea worm eradication projects in parts of Northern Ghana among other developmental projects.
President of Ghana, John Dramani Mahama who is currently in the US state of Washington to attend the US-African Leaders Summit will together with US Secretary of State, John Kerry witness the signing of the agreement later on Tuesday. The second compact is to tackle the challenge of inadequate and unreliable power supply that has bedeviled the country’s energy sector.
Meanwhile, Ghana’s Energy Minister Hon. Emmanuel Armah Kofi Buah has expressed optimism the investment will enable Ghana overcome its energy woes.
Ghana is among the over 40 countries in the world to benefit from the MCC’s monetary investment.
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Foreign Policy
Op-Ed
By Gordon Adams
Africa – The Great Security Shift
The White House is hosting a major summit of African leaders this week. Elected and unelected heads of state and officials from nearly 50 African countries are in Washington, D.C., to discuss the future of the U.S. relationship with Africa.
The sad part about this meeting is that the administration's Africa policy is gaining visibility and attention not so much because of progress in African economic development but because of heightened U.S. attention to security issues in that continent.
The single-mindedness of the administration's focus on terrorism and security has dragged the United States, and especially the U.S. military, into the internal security affairs of a growing number of African countries, from the 14 countries involved in the Trans-Sahara Counterterrorism Partnership (TSCTP) program to Somalia, Kenya, Uganda, Cameroon, Niger, Liberia, and now Nigeria.
It seems like the United States cares most about Africa when administrations perceive that U.S. security interests may be at stake. We really pay attention when we think terrorists and insurgents are paying attention. When that happens, the "security assistance" mavens take over, applying those models so carefully (and unsuccessfully) crafted in Iraq and Afghanistan. Army trainers, private contractors, Special Operations forces, and even the National Guard swoop in to spiff up the indigenous militaries and security forces of selected African countries.
It is a dangerous model of engagement, one that could well lead to policy and operational failure, to a weakening of our civilian engagement in Africa, to serious destabilization of governance in a number of countries, and to a "blowback" that will actually compromise U.S. national security and our credibility in Africa.
The United States has been involved in Africa for some time, though the continent's former imperial powers, especially France, have been more deeply engaged. More recently, China has become a major player, with growing investments and foreign assistance. The history of U.S. engagement in Africa has been, in fact, quite complex, revolving principally around development assistance and the provision of food and humanitarian relief. We have also had a somewhat sordid history of providing political and military support to some of Africa's more distasteful dictators in some countries, ranging from Mengistu Haile Mariam in Ethiopia to Mobutu Sese Seko, who ruled Zaire for 32 years.
U.S. development and social assistance in Africa has traditionally been the responsibility of USAID. When I was associate director at the Office of Management and Budget (OMB) in the 1990s, the Clinton administration set aside more than $700 million a year for African economic development, health, education, and many other programs. But it was not very effective assistance, if the purpose was economic and social development.
First, the assistance was smaller than it seems, as it was scattered over 50 countries, meaning less than $100 million a year for any one of them. Some, like Ghana, were countries that showed signs of economic progress and growth, while others, like Congo (formerly Zaire) were systematic economic and social basket cases. Second, USAID scattered its assistance like fairy dust through a large number of activities -- from health clinics to wells, to crops, to schools, and beyond, meaning the total for any one country was spread so thin it could hardly have had a significant impact.
The Obama administration is doubtlessly pointing out at the summit this week that it has upped the African ante in development assistance.
According to USAID data (extracted for this piece by my Stimson Center colleague John Cappel), U.S. development assistance to sub-Saharan Africa averaged roughly $675 million a year during the Bush years, but had risen to an average of over $1.13 billion a year through fiscal year 2012. Moreover, the Millennium Challenge Corporation (a 2004 Bush initiative) has signed "compacts" or "threshold agreements" with 19 African countries, through which it will provide another $5.3 billion in foreign economic assistance to Africa. The most significant U.S. social investment in Africa is the $5 billion a year the State Department oversees to fight and control AIDS, the bulk of it spent in Africa.
These economic and social investments appear to be working. Economic growth rates in many African countries, according to the World Bank, have accelerated in recent years, reaching annual growth rates over 6 percent in 2013 in such countries as Burkina Faso, the Democratic Republic of the Congo, the Ivory Coast, Ethiopia, Ghana, Mauritania, Mozambique, Sierra Leone, and Tanzania.
It is not clear, however, that official development assistance is the cause of this growth. Billions of public dollars spent on African development over the past 45 years by the United States, Europe, and international institutions like the World Bank did little or nothing to accelerate economic growth in the continent. A more important source of growth might be the "discovery" of Africa by foreign investors (who began to pour private capital into the continent early in this century). According to the Hudson Institute's Index of Global Philanthropy and Remittances, in 2013, private capital flows from the United States to the developing world were 3.5 times larger than official U.S. development assistance. (The index does not provide data by recipient country or continent, however.) According to the International Business Times, private equity investment in African countries has been growing rapidly in 2014, faster than such investment in Latin America, China, or India.
But it is clear that increased government assistance and private investment have not eliminated security problems in Africa. From Boko Haram to Saharan terrorists, to coups in Mali, to the uneasiness of Somalia, to ethnic conflict in Kenya, to the endless Congo wars, to the search for Joseph Kony, Africa has been perpetually insecure, marked by coups, inter-ethnic conflict, and, today, extremist insurgencies. And the United States has become a major player in the continent in the last few years, driven by the broader U.S. policy of tackling extremist insurgents and terrorist organizations on a global scale -- meaning that not only has U.S. engagement in Africa expanded, but its role there has taken on an increasingly military character.
One can measure some of this expansion in dollar terms. While economic and social assistance has been strong, Cappel and I calculate that between 2005 and 2012, the United States also spent nearly $15 billion on security sector programs in Africa. The bulk ($11.8 billion) of that has been U.S. contributions to U.N. peacekeeping operations in Africa, principally in Sudan, South Sudan, and the Democratic Republic of the Congo. But there has also been a rising fiscal tide of State Department-funded spending to train African militaries and security forces for peacekeeping duties, law enforcement, counternarcotics operations, counterterror operations, and to underwrite the expenses of African regional peacekeepers in Somalia, among other places.
Beyond these measurable security dollars on the State Department side, however, there has also been considerable expansion of direct U.S. military engagement in Africa, funded in the defense budget. This expansion includes the creation of the Africa Command in 2008, the Combined Joint Task Force -- Horn of Africa engagement of the Special Operations Forces, a somewhat secret U.S. military presence in Somalia, the Trans-Sahara program noted above, the special training of elite anti-terror forces in Mali, Mauritania, Niger, and Libya, the deployment of U.S. surveillance drones in Niger, and advising the Nigerian military as they tangle (or don't tangle) with Boko Haram. In fact, as of 2014, the United States had "boots on the ground" in 13 African countries, and advisors and/or private contractors doing training in even more. The cost of these military programs has not been disclosed, but in the interests of transparency and congressional oversight, both the programs and their budgets need more sunshine.
The gradual transition of responsibility for the U.S. investment and direct engagement in African security from State to the Pentagon and the Special Operations forces in particular is reinforced by President Obama's announcement in June that he wants to create a $5 billion Counterterrorism Partnerships Fund, most of which will be implemented by the military services. As I wrote recently, this program was announced before it had content, and most of the work of defining and implementing that content will fall to the Pentagon. This not only leaves the State Department, which has traditionally had budget and policy responsibility for security assistance programs, in the dust, but puts more of a military stamp on U.S. engagement. (As I argue in my forthcoming co-authored book, the imbalance of the Defense Department and State in our global security engagement, and the growing role of the U.S. military are going to be a bad investment.)
There is precious little evidence that the U.S. military is competent to train another military in counterinsurgency and counterterror operations, especially when it comes to such "hearts and minds" activities as economic and social engagement in another country. But the process of engaging deeply with the security forces of another country contains an even deeper risk than that of mere failure.
The money, equipment, training, counseling, intelligence, and operating support the United States provides in Africa will only be reinforcing the militaries as institutions in their countries. These militaries already have, at best, a mixed history of corruption, political domination, and seizure of power. And U.S. military investments provide these militaries with additional arms and operational training, making it even more difficult for civilian governments to restrain the military's assertion of political power.
This deeper issue is a central one in Africa, and the one payoff of all the U.S. investment that we should put above all others -- above development, above social services, above stronger security forces -- is the issue of "governance." Governance is what this summit should be about, above all else. Supporting governance in Africa might be discussed this week, but it is a goal only weakly reflected in U.S. assistance programs in Africa.
It is clear that governance is a central issue in Africa. According to Foreign Policy and the Fund for Peace's most recent index of "fragile states," of the 25 most fragile states in the world in 2013, 17 are in Africa, and the five most fragile (on "very high alert," according to the index) are all in Africa: South Sudan, Somalia, the Central African Republic, the Democratic Republic of the Congo, and Sudan.
The World Bank has already discovered that governance is the key to economic development. And it is absolutely critical to real, long-term security. Without capable governance, the pursuit of security disappears into corruption, coups, and insurgencies, as has happened all too often in various African countries. Strengthening the military, internal security forces, or the police without strengthening the civilian state is on its face an investment that will fail.
For all of its supposedly rich experience in nation-building in Iraq and Afghanistan, the political results in those two countries make it clear that the U.S. military has no core competence in the field. Sadly, it is equally clear that neither the State Department nor USAID have greater expertise, nor that they have put support of governance at the heart of U.S. engagement in Africa. The words are there, but the civilian policies, programs, institutions, funds, and trained personnel are not there yet.
USAID devotes most of its programs and funding to development and health, not to governance. The State Department does not train foreign service officers in the art of governance or in how to help another country work through governance issues. As I wrote recently, the State Department needs to use its current Quadrennial Diplomacy and Development Review (QDDR) to step up to the challenge of reforming the foreign service, its approach to security assistance, and its budgeting to become more effective in this domain.
And yet governance is central to development, to adequate social services, and to security. Chris Holshek with the Alliance for Peacebuilding, who has worked on the military side of security sector assistance, argues -- rightly, in my view -- that the goal of security is "human security," a much broader agenda than well-trained militaries or cops. But bringing reality to that vision of security depends on having a capable government in place that can actually raise resources and target them on social needs.
What does this mean? It means U.S. foreign assistance that is targeted at helping strengthen governments that are efficient (don't spend needlessly), effective (actually deliver "the goods" to the people), accountable (the public is able to change the government and effectively alter unacceptable policies), responsive (the government responds to the public and its representatives), and free of corruption. This is not something that yet exists in the vast majority of African countries but is something that is essential if they are to grow economically, bring well-being to their citizens, and achieve real security.
Creating such a capacity where government is weak and corruption is rampant -- true of many African countries -- is damnably difficult to achieve. It is clearly "mission impossible" for an outside entity like the U.S. military, as Iraq and Afghanistan amply reveal. In fact, $25 billion for the Iraqi military and nearly $50 billion for the Afghan military have, if anything, only amplified corruption in both states.
The summit this week offers an opportunity to change direction. Rather than beefing up our military engagement in the continent, we should be beefing up our investment in governance and in cooperation with a lot of other countries and international institutions. The White House may miss this opportunity. Its focus for the summit is on "how to encourage progress in key areas that Africans define as critical for the future of the continent: expanding trade and investment ties, engaging young African leaders, promoting inclusive sustainable development, expanding cooperation on peace and security, and gaining a better future for Africa's next generation."
All of these depend on strengthening governance, and the administration needs to start building U.S. capacity to undertake this mission and embed its foreign and military assistance programs in an overall strategy to strengthen governance.
I have one small suggestion for a step that might help. President George W. Bush created the Millennium Challenge Corporation to link the provision of U.S. economic development dollars to a recipient country's willingness to deliver on human services, the reduction of corruption, and other measures of good governance.
What if, in the same way, we took some of the billions of military assistance dollars we spend today and created a fund for security assistance, where decisions were not driven by a fight with terrorists or support for a favorite strongman in Africa? Instead, what if we linked providing help on the security front to a recipient country's measuring up to yardsticks of good governance, both broadly and with respect to civilian control over its security forces.
It would be only a start, but I think a good start, toward embedding U.S. economic, humanitarian, and military assistance funding and policies in a broader strategy that could provide real, long-term security to African countries. It would put that strategy in the hands of U.S. civilians, who ought to be running our engagement processes, anyway. And it would be a real legacy for the administration to leave behind, not three days of conference rhetoric and a goodbye.
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Scientific American
Op-Ed
By Lisa Friedman and ClimateWire
Africa - Africa Needs Fossil Fuels to End Energy Apartheid
Renewable energy is in Africa's future. But coal and natural gas is the future for the power-starved continent.
That message from energy ministers as part of the U.S.-Africa Leaders Summit yesterday came as officials also emphasized how deeply threatened the region is by climate change. But on a continent where 600 million people still lack access to basic energy services, one leader after another said tapping into new power—clean or dirty—is their top priority.
"Africa is hugely in darkness," said Chinedu Ositadinma Nebo, Nigeria's minister of power. "Whatever we can do to get Africa from a place of darkness to a place of light ... I think we should encourage that to happen."
The three-day summit, sponsored by the Obama administration, is aimed at fostering economic ties and investment between the United States and Africa, and energy access is at the forefront of that mission.
With countries like Tanzania, Uganda and Mozambique home to major new oil and gas finds, the prospect of massive new investments in Africa's power sector has sparked debate between those who say the continent has a right to use whatever resources it has and those who are pushing it to avoid high emissions growth for the sake of the planet.
An event sponsored by General Electric Co. on the sidelines of the summit outlined the opportunities and the challenges of Africa's energy future: Demand for African oil and gas, currently concentrated in five countries, is declining rapidly due to America's natural gas boom.
At the same time, African gas production is expected to double in the next two decades, and the continent, according to the International Energy Agency, needs $400 billion in that time to provide power to the full half of the population that is without it.
"We need 20 times more power than we have today, and by the time we get there, we're going to need 30 times the amount of power we need today," said Ashish Thakkar, CEO of the Mara Group, an African conglomerate.
Clean energy is certainly part of that equation.
Battling 'energy apartheid'
Ghana's president, John Dramani Mahama, noted that through a new multimillion-dollar compact with the Millennium Challenge Corp. to modernize the sector, his country is on its way to becoming an energy hub for the African continent.
Ghana is poised to double its 2,800 megawatts of capacity in the next five years, and 10 percent of that will be composed of solar energy. Mahama said he won't rule out coal but argued that Africa must work to leapfrog the dirty power that brought modernization to the West.
"Climate change is real, and Africa stands to suffer the most," he said. "We can't take the same paradigm that America did or Europe did or even China did. We need to look at the conditions of the day and develop according to those conditions."
Meanwhile, the artist known as Akon, the Senegalese Grammy-winning singer and producer, has a new initiative. It is "Akon Lighting Africa," and he hopes to bring electricity to 1 million households by the end of 2014. He called on investors to take advantage of the continent's most freely available resource: the sun.
"Africa will never run out of sun. Our energy is right there in front of us. Why not use it?" he said.
And yet the message from most countries as well as the World Bank was unequivocal: For Africa to succeed, fossil fuels must be in the mix.
"Energy apartheid" is the way World Bank President Jim Kim described the continent's vast absence of power. Fixing that, he said, demands pragmatism.
Coal and hydroelectric power
"If some people have taken a position where we say no coal, no nuclear, no hydro, then we're really not serious," he said. Big hydropower, in particular, demands new acceptance, he said, arguing that the multilateral donor agency has learned lessons from past disastrous projects and is much better-equipped to work with indigenous communities and others affected by new dams.
"Anything that will give you 40 gigawatts of installed capacity and take billions of tons of carbon out of the air, you have to figure out how to make that work," Kim said.
Under Kim's leadership, the World Bank has made fighting climate change a top priority, and Kim himself has traveled the globe, urging heads of state to take seriously the threat rising greenhouse gas emissions pose to the gains poor countries have made. And while the bank has imposed new restrictions on coal loans, it also has staved off demands from environmental groups to phase out fossil fuels altogether.
Yesterday, Kim said the agency must balance climate concerns with a moral mandate to help provide for basic power needs.
"We're very serious about climate change. We're also very serious about African people's right for energy. For us, it means we have to work extremely hard in moving forward on hydroelectric power. But in certain places where the only option is coal, we have said that we're going to have to look at that, and look at that seriously. But we hope that we're not going to have to look at it," he said.
Kim argued that wind, solar and other renewable sources are not yet able to provide the baseload Africa needs to enable industrial capacity.
"The minute it gets there, we will be the first to celebrate. But it's not there yet," he said. African leaders were even more direct in their assertion that using coal is a right and a necessity.
'We will just go ahead'
"I think Africa should be allowed to develop its coal potential. This is very critical. There are so many areas in Africa that will help to generate power for the over 60 percent of Africans that have no access to energy at all," said Nigeria's Nebo.
His own country is working on a "very robust" renewable energy plan that calls for an increase in solar, wind and hydro production. But Nebo also called for nuclear and "clean coal" technologies to help nations minimize pollution.
"So please, I think it is important that we let Africa be and let Africa use our resources," he said.
Tanzanian Minister of Power Sospeter Muhongo agreed. His country, he said, is on the cusp of becoming a middle-income nation and aims to grow its gross domestic product about 9 percent annually. To do that, coal reserves and Tanzania's 50.5 trillion geologic feet of natural gas are critical.
"We in Africa, we should not be in the discussion of whether we should use coal or not. In my country of Tanzania, we are going to use our natural resources because we have reserves which go beyond 5 billion tons," Muhongo said.
He pointed out that the industrialization of the West was fueled with coal and argued that Europe is "going back to coal." Meanwhile, he said, the greenhouse gas emissions of African nations are "completely negligible" compared to other countries.
"We will start intensifying the utilization of coal," he said, adding, to the applause of executives, "Why shouldn't we use coal when there are other countries where their CO2 per capita is so high? ... We will just go ahead."
In another part of town, at an administration-sponsored working group on climate change and food security, Secretary of State John Kerry warned that carbon pollution and rising global temperatures pose a dire threat to agriculture in Africa and put his weight behind international negotiations toward a new global climate agreement, expected to be signed in Paris in 2015, that will call on all nations to rein in emissions.
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Voice of America
Ivory Coast - Ivory Coast: US-Africa Summit Platform to Attract Investors
Ivory Coast’s Commerce minister says the ongoing U.S.-Africa summit presents the administration a unique opportunity to attract American businesses to the West African country as part of the administration’s economic recovery efforts.
Jean-Louis Billon said the administration in Yamoussoukro is encouraging strong public-private partnership and is implementing measures that will ensure a business-friendly climate to attract investors in a bid to diversify the country’s economy.
“We want to diversify our economy [and attract] investment to our country. So far we have a lot of French companies and European also [a] few US companies. It will be good for us to attract more and more US investors,” said Billon.
TRADE AGREEMENT
The Africa Growth and Opportunity Agreement (AGOA) will expire next year, but the U.S. Congress is set to begin discussions on the possible re-authorization of the trade agreement. Ivory Coast is one of the largest beneficiaries of AGOA.
Billon said he is hopeful that the trade agreement will be re-authorized.
“We are here also for the renewal of the AGOA…we want a better AGOA for the next 15 years. This is good for my country and any other African country,” said Billon. “We [are meeting] with US cooperate companies, institutions and the Millennium Challenge [Corporation] that we are trying to get for our economy.”
Billon says the prospects of the administration’s post-conflict economic recovery agenda looks promising.
“The figures talk for us. In 2012 we had 9.6 percent economic growth in the country and in 2013 we had above 9 percent also and we intend to finish in the same range in 2014 and we are aiming [at] double digit growth for 2015,” said Billon. “So just after such crisis we are one of the top [countries] with economic growth on the continent.”
Critics say the government has yet to improve the lives of citizens in spite of the impressive economic growth figures the administration braggs about. They cited lack of jobs and high cost of living among other concerns that they say the administration has yet to address.
Billon says the government is working hard to improve citizens’ lives.
“The biggest challenge for us is to create a sound sustainable economy with millions of jobs,” he said.
Corruption
Ivory Coast is recovering from the 2011 conflict following the presidential election dispute. Many Ivorians say the government has yet to root out graft and nepotism which they contend undermines the country’s moral fabric.
Billon says the administration is making efforts to combat corruption.
“It’s a challenge for us. A country in crisis is a fragile country with bad habits installed and it is always difficult to get rid of them after such a long term of bad habits,” said Billon. “But, we acknowledge that we have this problem and we [are taking] the steps to fight it. We are working towards more transparency, the rule of law, and we are going to take sanctions when it happens. That’s the only way we can solve this problem.”
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The White House
AGOA - FACT SHEET: Investing in African Trade for our Common Future
Increased regional and international trade has been one of the drivers of Africa’s extraordinary average annual GDP growth rate of 5.1 percent over the last decade. President Obama and his Administration are committed to sustaining and accelerating this growth through a comprehensive strategy to realize the potential of a renewed African Growth and Opportunity Act (AGOA). This strategy includes the following key elements:
· Renew and Update AGOA to Increase Market Access Opportunities for Africa
· Find Synergies through Aligning Assistance
· Improve Infrastructure to Enhance Competitiveness
· Strengthen Trade Capacity Building, Value Added Production, and Supply Chains to Increase AGOA Utilization
· Create New Markets for Africa
Duty free access to the U.S. market under AGOA over the last 14 years has contributed to Africa’s economic success, as exports from sub-Saharan Africa to the United States more than doubled and non-oil / non-mineral exports have increased fourfold. The application of AGOA’s eligibility criteria and engagement with African governments under the President’s Trade Africa initiative have reinforced broader U.S. and African efforts to promote good governance and improve the business environment in a number of countries, helping develop their competitiveness as an investment destination. To fully realize AGOA’s promise the Administration is committed to renewing and improving AGOA, to further engaging on trade and investment facilitating policies, and to continuing and expanding the broad range of trade capacity building s