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The East African : Aug 11th 2014
The EastAfrican NEWS AUGUST 9-15,2014 9 $33b in trade deals with an eye on China A geothermal well in Kenya. The country will use its allocation of the pledged US assistance in exploring this clean energy to boost power supply; Left: US President Barack Obama (left) applauds with African leaders during a group photo at the US-Africa Leaders Summit at the US State Department in Washington, DC. Obama said that the US wants to expand help for Africa to fight threats that span borders like extremist groups and disease. Picture: File and AFP its trade volumes with the continent jump from $11 billion in 2000, to more than $210 billion in 2013. Positive future ties In one of the panel discus- WHERE PLEDGED FUNDING WILL BE USED What will it take Kenya to realise the dream of being an oil-exporting country? It needs approximately $16 billion for oil exploration operations in three years, when it hopes to export its first barrel. Tanzania is already producing gas. What are its future plans? It plans to present new natural gas rules to parliament in November aimed at helping the country benefit more from its natural resources. What exactly ails the energy industry in East Africa and with what effects? Energy remains a major concern for the region as demand grows threatening the available supply across the region. Power shortage is blamed for the 11 power outages experienced in a month. Sector allocation of US Economic Assistance (US$ Millions) Peace & Security Governance Health Education Economic Growth FY 2014 FY 2015 Request 91 79.9 150 5015 410 877 273 4915 241 988 gas hit Africa badly in the wake of the financial crisis. Oil consumption in the US declined from 20.7 million barrels per day in 2008 to 18.9 million in 2013, and oil prices fell from $140 per barrel to $98 per barrel. Dwindling trade These price shocks have seen US trade in goods with Africa, which is mostly tied to oil, dwindling from $125 billion in 2011 to $99 billion in 2012 and $85 billion in 2013. It is expected to further decline to well below $80 billion this year. China, shielded from the fi- nancial crisis, supplanted the US as Africa’s biggest tradinpartner in 2009, and has seen success of Obama Powe≥ Af≥ica initiative across Africa as part of Obama’s Power Africa initiative. Citi operates in over 40 countries in Africa with offices in 16 countries, including in key markets such as Nigeria, Ghana, Kenya, Tanzania and South Africa. Dangote Group signed an agreement to jointly invest $5 billion in energy projects in sub-Saharan Africa with Blackstone Group funds. The US government has committed more than $7 billion in financial support and loan guarantees to the Obama initiative over the next five years. General Electric announced a $2 billion investment toward infrastructure, training and supply-chain development. GE, which says Africa is its “most promising growth region,” generated $5.2 billion in revenue on the continent in 2013. “The US government and the World Bank Group are working now on specific tasks and milestones that could help to achieve one quarter of Power Africa’s goal of generating 10,000MW of new power in sub-Saharan Africa,” said Dr Jim Yong Kim, the World Bank Group president. Africa needs $300 billion funding for power projects but the beneficiaries may have to review laws governing the sector if they hope to compete favourably for the money with Nigeria and South Africa, which have standardised terms for investors in power projects. The World Bank estimates that one in three Africans, or 600 million people, lack access to electricity. sions at the summit, Rwanda’s President Paul Kagame said he was optimistic that even though the US is coming late onto the scene, its renewed partnership with Africa could “bypass the relationship between Africa and Europe, and between Africa and China.” The EU, China and Japan have been holding similar gatherings every three to five years. To make up ground lost to China, President Obama’s guests at the Summit indicated a radical shift in his administration’s approach to Africa. By inviting all African leaders except the presidents of Zimbabwe, Sudan, Central African Republic, Eritrea and Western Sahara; Washington was implicitly saying trade, and not governance, was high on its Africa agenda. According to Michael Bloomb- erg, the former mayor of New York, sometimes it does not make economic sense to isolate countries from the world stage to influence their behaviour. “America boycotted Cuba. The Cuban people are worse off today than they were 45 years ago. If we had traded with Cuba, the Cuban population’s lives would have been overwhelmingly better,” he said in one of the summit’s side events. While Chinese assistance has been in the areas of infrastructure and trade, the priority area of US assistance to Africa has been health, which accounts for 80 per cent of its total aid to the continent. However, this is slowly chang- ing, with the US now focusing more on trade, peace and security.
Aug 4th 2014
Aug 18th 2014