The African Energy Chamber (AEC), has described the call by US President Joe Biden for continued growth in partnerships with African economies as an avenue for the continent to counter the often-wrong preconceptions about investing in it.
According to the body, “We believe it is vital to engage U.S. companies and investors to, as Africa has some of the fastest-growing economies globally and possesses significant investment and development opportunities for U.S. firms. U.S. companies stand to play a significant role in the road to a lower-carbon future in the continent, and to continue leading some of the most important markets in the energy industry.”
From majors like Chevron, ExxonMobil and Kosmos Energy making significant discoveries and operating in multiple countries like Angola, Mozambique, Nigeria, Equatorial Guinea, Senegal, Ghana, and others, to large companies like General Electric, Halliburton, and hundreds of Houston and Oklahoma based companies, some U.S. companies have successfully developed some of the most important projects in the continent. One of the reasons behind their success is a deep and actual understanding of the risks involved and their mitigating factors, as well as a strong connection to the project country and its people.
“Africa, we believe offers a tremendous opportunity for US companies to invest and make returns that are far superior to market returns in many other investment destinations” said Jude Kearney, Chairman of the US-Africa Committee at the AEC. “We would therefore like to encourage more US companies to look beyond unjustified risk perceptions on Africa and actively pursue opportunities in Africa” Mr Kearney concluded.
In preparation for the upcoming U.S.-Africa Energy Forum organized by Energy, Capital & Power in partnership with the AEC, the AEC is pleased to announce the launch of its series “Changing the Risk Perception About Africa,” comprising of five articles on the following topics:
For the last six decades, every U.S. administration has created programs to provide guarantees, loans, and advice to U.S. companies desiring to enter the continent. Such programs have also provided funding, negotiation advice, and capacity-building for African countries to develop their economies. Some of such initiatives include the African Growth and Opportunity Act passed under the Bush Administration, President Obama’s Doing Business in Africa Campaign, Power Africa, and Trade Africa. Despite his infamous comments against the continent and his administration’s America First foreign policy, even President Trump’s administration launched Prosper Africa to increase U.S. – Africa trade and investment.
Despite these initiatives, trade and investment with sub-Saharan Africa have decreased in the past years. According to the Center for Strategic & International Studies, in 2020, the U.S. did approximately $32.6 billion worth of trade, down from $36.8 billion in 2019, representing less than 1per cent all U.S. trade in goods. Particularly U.S. involvement in energy and mineral resources falls short compared to Chinese involvement, making investments in the continent a matter of national security.
“We believe the forum is an excellent opportunity to address the stereotypes and misconceptions surrounding investments in Africa.”
