This past March was a busy month in Washington for Africa related events. Covington participated in a number of business focused summits and congressional hearings touched on U.S. – Africa public policy and its impact on the commercial relationship.
In early March, Covington’s Washington office hosted the Corporate Council on Africa’s (CCA) Annual Board Meeting.
One of the leading associations focused on cultivating commercial linkages between the United States and Africa, the CCA’s board meeting brought together nearly 50 corporate members to formulate policy objectives that would eventually be shared with senior leadership in the Trump Administration. The timing of these recommendations are ideal as the Administration is still in the early stages of identifying and evaluating the efficacy of particular programs. Adding weight to the recommendations is the fact they are coming from an organization whose membership consists of some of the largest American multinational corporations, such as Caterpillar and Hess Corporation, who recognize and appreciate the potential of Africa for their overall bottom line.
The Powering Africa Summit also took place in early March. Focused on “Increasing Private Sector Competitiveness in Africa’s Energy Sector,” the Summit included government participants from the U.S. and Africa and representatives from various power providers, financial institutions, law firms, and engineering and construction companies. Plenaries ranged from topics such as “Energy Economics for Gas IPPs” to “Blending of Public and Private Financing for Clean Energy Projects.” Away from the public stage was where more of the substantive issues were discussed. Smartly organized, the private sidebars allowed select participants to take country specific deep-dives with some of the continent’s leading officials. One roundtable that stood out was with the government of South Africa.
Senior leadership from the South African Ministry of Energy and the Office of the President shared the government’s intent to announce later this year a second bid window for the coal-based independent power producer (IPP) procurement program. Coal is strategic for South Africa. Since coal mines are abundant throughout the country, the government expects bidders to utilize the readily available deposits to address the country’s large energy shortfall. In order to incentivize financing and minimize environmental concerns, the delegation shared a desire for “clean” and other smart coal technologies. With an anticipated 1,600 MW available for bidding, expect strong interest in this upcoming procurement from a number of the world’s leading energy producers.
Towards the latter-half of March we also saw various congressional hearings touch on Africa’s economic potential and why it should continue to be a focus for U.S. policy makers.
Africa’s sustained economic growth, improved social development, and growing entrepreneur class are unlocking the continent’s potential for international investment and trade, raising its geostrategic importance to the U.S. while also attracting international competition for access, influence, and trade.”
The above quote would be expected from a senior official at the Department of Commerce or the Office of the U.S. Trade Representatives. It is noteworthy since it came from General Thomas Waldhauser, the top military official of U.S. Africa Command, in his annual posture hearing before the Senate Armed Services Committee.
General Waldhauser dedicated a portion of his written testimony to comment on the continent’s economic and trade dynamics sharing that, “Africa links directly to U.S. strategic interests as the continent strives for inclusion in the rules-based international order. Just as the U.S. pursues strategic interests in Africa, international competitors, including China and Russia, are doing the same.” The General’s astute economic observations, at a time when he’s primarily responsible for lines of effort to counter al-Shaabab or Boko Haram, only impresses on the public the potential and competition for access into Africa’s economic markets.
At the end of March, the House Foreign Affairs Committee held a hearing on “Budget, Diplomacy and Development” that examined President Trump’s proposed cut to the international affairs account. The general sentiment, shared on both sides of the aisle, was the adverse impact the proposed budget would have on America’s strategic foreign policy priorities, such as combatting terrorism and promoting rule of law. As the Chairman of the Committee, Rep. Ed Royce, sharply said “we shouldn’t be cutting to the bone.”
There were a handful of references to Africa throughout the hearing. Aside from lauding the U.S. intervention in the Ebola crisis and other humanitarian efforts, Members discussed the need to continue trade capacity building efforts between the United States and Africa.
Rep. Ted Yoho, a Republican from Florida, articulated the “benefits of bringing electricity and power to the people” as a means of “empower[ing] the people” and changing the country’s dynamic by developing a trade partnership rather than an aid dependent relationship. He explained that “coming from a strong conservative side, to stand up for global food security and Electrify Africa wasn’t real popular in my district,” but by sharing the similarities to rural electrification efforts in the United States in the early 1900s people began to appreciate the long-term benefits of this assistance.
As we look to April’s upcoming events, such as the World Bank and International Monetary Fund Spring Meetings, expect Africa – particularly the economic relationship – to continue to be a focus for policy makers in Washington.