U.S. Aid Projects Attracting Non-U.S. Investors In Africa

U.S. Aid Projects Attracting Non-U.S. Investors In Africa

In 2008, Tanzania received $698 million from the Millenium Challenge Corp., an independent U.S. foreign aid agency that helps lead the fight against global poverty,  according to a report in Washington Times. The goal was to build roads and other infrastructure in Tanzania.

No U.S. companies bid for these projects, which eventually were snapped up by Chinese firms.

“So (the Chinese) are using American money to build our roads and infrastructure,” said Liberata Mulamula, Tanzania’s envoy to the U.S.

China, Brazil, Germany and other global competitors are pursuing contracts worth billions of dollars and proposing investments in her country far more aggressively than U.S. firms, Mulamula told told editors and reporters at The Washington Times on Monday, according to the report.

She’s hoping President Barack Obama’s visit to Africa will change the perception that Tanzania suffers from civil war and terrorism.

“American companies have been quite reluctant to engage,” she said. “We have resources, oil, gas. Surprisingly, there is only one American company engaged in gas exploration.”

U.S. firm Exxon Mobil Corp. partnered with Norwegian oil group Statoil ASA and discovered a large deposit of natural gas off the coast of Tanzania.

Obama announced the Power Africa initiative aimed at doubling access to electricity in sub-Saharan Africa. The U.S. will commit more than $7 billion over the next five years to this effort. It’s an opportunity for U.S. companies, Mulamula said.

Meanwhile, China has a long-standing relationships in Africa including Tanzania and has steadily increased the size of its footprint on the continent, the report said. Chinese President Xi Jinping visited Tanzani in March.

The Chinese know the terrain, Mulamula said, however, Chinese companies rarely make actual investments. “They are not big investors yet,” she said.

Mulamula said the State Department bears some responsibility for scaring U.S. investors away from Tanzania. It issues “scary travel warnings, the kind of things which other governments don’t do, but the American administration is always quick and they don’t know what damage they are causing, not only to us but also to American investors.”

A State Department official said “travel warnings are part of our commitment to protect U.S. citizens traveling and residing abroad” and include factual information.