During his June African trip, President Obama announced a $7-billion American investment in energy projects in sub-Saharan Africa, but critics say that is not enough if the U.S. wants to be a real player in the region’s energy future.
Obama said the program is not about American altruism. “If prosperity is broadly shared here in Africa, that middle class will be an enormous market for our goods,” he said on June 30.
Critics argue, however, that the initial investment of $7 billion may not help the African economy as promised, pointing to the White House’s own admission in a fact sheet that “sub-Saharan Africa will require more than $300 billion in investment to achieve universal electricity access by 2030.”
Aniket Shah, a strategist at Investec, an asset management firm that deals with U.S.-African investments, called the initial venture a “drop in the bucket.”
“It’s an order of magnitude problem,” Shah said. “Are there enough projects to put this money through?”
Some potential investors may lack confidence that their money will have a both impact and a return on investment.
Jay Ireland, CEO of GE’s Africa division, said the initial investments, even if not paid back, are needed to lay the groundwork for an economic presence.
“There are plenty of projects but no money,” Ireland said. “It’s worth the risk. If you want to have development, you have to have the infrastructure for it.”