Obama’s ‘Power Africa’ a Sweet Deal for GE, Not Sub-Saharan Africa

July 6th, 2013 - by admin

Michael Gerson / Herald Tribune & Sarah Lazare / Common Dreams & Lauren McCauley / Common Dreams – 2013-07-06 02:00:27


Expanding Africa’s Access to Electricity is Obama’s Bright Idea
Michael Gerson / Herald Tribune

WASHINGTON (July 2, 2013) — Before his current trip, President Obama’s Africa strategy was known for inattention at the highest level. Former Chinese President Hu Jintao made five extensive visits to Africa as head of state. Obama spent 20 hours in sub-Saharan Africa in 2009. The intense affection of a continent seemed unrequited, and foreign policy experts wondered if American emphasis on the region had been consciously downgraded.

This is one of those rare cases, however, in which the reality has often been better than the rhetoric (or lack of it).

The Obama administration midwifed the birth of a new country, South Sudan. It has pushed for greater transparency in both American aid and in global extractive industries. It has renewed an emphasis on agricultural productivity through its Feed the Future initiative. In a difficult fiscal environment, it has fought to preserve overall aid budgets (though the recent cuts to PEPFAR, the president’s emergency plan for AIDS relief, have been disturbing).

In all this, Obama has lacked a creative, signature initiative of his own. Until his speech in Cape Town, South Africa. Depending on its implementation and future scale, Power Africa — aimed at doubling access to electricity across the continent — could be a major strategic and moral advance.

Economic Success
Africa is an untold (though uneven) economic success story. A combination of greater stability, economic reform, high commodity prices, improved health and a demographic dividend of working-age adults has produced some of the fastest economic growth in the world. Since 2000, trade between the United States and Africa has more than tripled.

But anyone who has traveled to Lagos or Monrovia has seen the main obstacles to the next stage of African development: bad roads, poor sanitation and (especially) unreliable or nonexistent power. Seven in 10 people in sub-Saharan Africa have no access to electricity. Manufacturers run costly, dirty diesel generators and often operate at a fraction of capacity. Economists estimate a 2 percent to 5 percent yearly drag on economic output. It is difficult to be productive in the dark.

It is also difficult for children to do their homework at night, or for clinics to store vaccines or blood without reliable refrigeration, or for municipalities to run the pumps necessary for clean water and sanitation. Women and girls have an especially hard time of it: carrying firewood for long distances on their heads or backs, cooking with stoves that produce toxic fumes, giving birth in health facilities without lighting. Energy poverty is not merely economic; it is expressed in deforestation, respiratory illness, and maternal and child mortality.

It is also tragically unnecessary. Nigeria’s rolling blackouts take place in a country with large natural gas reserves. During the past five years, there have been more than 60 major finds of potential fuel supplies on the African continent.

The administration’s Power Africa initiative is designed to encourage electricity access for 20 million households in six focus countries (Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania).

Limited Scale
It is strong on technical assistance to governments, immediate deliverables and cooperation with the private sector. General Electric and other major companies have made serious commitments to bring thousands of megawatts online.

The program is weaker in its current, limited scale. To ensure universal power access by 2030 would require about $18 billion in yearly energy investments.

The administration’s effort involves $7 billion over five years. It will eventually be necessary to employ the Overseas Private Investment Corporation (OPIC) more aggressively to drive, finance and insure a large-scale mix of renewable and nonrenewable energy projects. (OPIC actually makes money on such deals, returning funds to the Treasury each year.)

A recently introduced bill in Congress — The Electrify Africa Act — seeks to do just that. Reps. Ed Royce, R-Calif., and Eliot Engel, D-N.Y., set a power generation goal twice as large as the administration’s. They also demonstrate the bipartisan appeal of market-oriented development policy. There is every reason for Republicans to support efforts that encourage economic independence, strengthen trading partners and compete with Chinese influence in a vital region.

Encouraging energy production also appeals to the way that Africans increasingly view themselves — not as the objects of compassion but as the generators of wealth. In 1961, Kenya had about the same GDP as South Korea. After a long detour, many African nations now hope to take the economic path of East Asia or Brazil. That journey can only be undertaken in the light.

Copyright 2013 HeraldTribune.com — All rights reserved.

Obama’s ‘Power Africa’ a Sweet Deal for GE, Not Sub-Saharan Africa
Large multinationals to make a killing from aid dollars pumped into private markets

Sarah Lazare / Common Dreams

(July 3, 2013) — Following his recent trip to Africa, President Obama has been lauding his new ‘Power Africa’ program, which he claims will funnel money and resources to “double access to power in sub-Saharan Africa.”

Yet, the money the US government is throwing at the program will in fact be pumped into US-based multinational corporations.

General Electric is slated to receive billions of dollars in power deals and open access to Africa’s energy markets as a result of ‘Power Africa.’

As the White House fact sheet on ‘Power Africa’ points out, the continent has “vast reserves of oil and gas.” The new deal means open season for companies like GE.

Jeff Immelt, the CEO of GE, is a former chair of the president’s Council on Jobs and Effectiveness and accompanied the president on his trip to Africa.

President Obama, who announced the initiative Sunday during his visit to South Africa, insists that he is interested in ‘partnering’ with African nations. Yet the new deal circumvents the people and governments of sub-Saharan Africa and invests directly in private corporations.

Critics charge that the ‘Power Africa’ plan is part of US efforts to exert geopolitical control of the region and expand resource extraction, in tandem with the expansion of US military bases and outposts across the country, accelerated with the 2007 creation of AFRICOM.

Alexander O’Riordan, writer for All Africa, argues:
At an estimated 100 trillion cubic feet, the market value of Mozambique’s gas alone is in the region of R3.5 trillion. Tanzania has discovered enormous gas and potential oil; Uganda and Kenya as well as Somalia also have potentially vast and lucrative reserves.

Energy is not just money it is also a geo-political strategic asset; who gets to buy the energy and more importantly process the energy decides where that energy will be sold. It is worth keeping in mind that with energy being a depletable, finite resource, who sells it first gets to sell it cheapest… the longer you wait the more valuable it becomes.

Western interest in Africa’s energy sector is about a lot more than getting light-bulbs into African households.

African Women’s Development Fund declared at a May meeting of the African Region of the World Economic Forum that development and ‘aid’ rooted in private markets is deeply flawed:
We remain skeptical that real progress for Africa’s one billion people — the majority of whom are women–will change radically through policies centered unremittingly on markets and profits, and based predominantly on the extraction of mineral resources. African people’s needs and interests — particularly those of women — are not part of this narrow economic vision.

Plan to Enrich Corporations with Climate Aid for Poor Thwarted… For Now
US-led group sought to treat the UN’s Global Climate Fund like a bank, speculating with climate funds

Lauren McCauley / Common Dreams

(July 3, 2013) — The United States and a coalition of rich nations were rejected — at least for the time being — in an attempt to funnel aid money directly to international corporations, bypassing the governments of the countries necessitating the aid.

According to papers seen by the Guardian newspaper, following a United Nations’ board meeting regarding the fledgling Green Climate Fund, the 24-person board voted down a proposal by the US, United Kingdom and Australia for the GCF to bypass the governments of poor, host countries by directly awarding aid funds to international companies.

“They also lobbied hard for the fund to be able to act like an autonomous bank, taking risks, guaranteeing loans, having its own governing body and even being able to speculate with climate funds,” reports the Guardian.

Instead, the board ruled to allow a “powerful private sector advisory group and an investment committee,” which, the reporting adds, “suggests that rich countries will continue to try to control the funds.”

Developing nations have lobbied the United Nations for the GCF aid money to be provided in the form of grants and not loans, and to the public rather than the private sector.

“We want to make sure the GCF does not become an institution dominated by multinational corporations and Wall Street investors that would leave critical, yet unprofitable, priorities by the wayside,” said Karen Orenstein, of Friends of the Earth.

Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.