Or Will China, Russia, and Others Take Charge?
With billions literally at play, is the United States ready to invest in Africa’s oil and energy opportunities? So far, US companies and the government have dragged their feet. Perhaps it is due to political turmoil, or a lack of understanding of the money that is at stake? Maybe Americans don’t realize that China, Russia and others are swooping in and taking advantage of opportunities that they seem to be blind to. They may also be skeptical of partnering with African nations, leaders, and energy corporations. But with so much at stake, can the US really afford to waste time on the sidelines?
Russia, China, Africa and the United States
It is well-known that Russia and China are already working with Africa to form alliances needed for future prosperity. These countries are building infrastructure, negotiating deals, and making the needed investments in the future. The US is not being competitive despite the fact that they are positioned to gain the most.
The US Economic Engagement in Africa: Making Prosper Africa a Reality report recently stated that, “While other countries have ramped up their economic engagement with Africa via trade, investments, and private sector financing, the United States has remained, for the most part, disengaged. Though decades-long U.S. government initiatives in Africa are indicative of longstanding relations, the reality is that these initiatives have not been enough for the United States to compete in the changing development landscape.”
NJ Ayuk, the Executive Chairman of the African Energy Chamber has a practical approach and the answers in his book Billions at Play: The Future of African Energy and Doing Deals. He would like to see Africa and the US work together. “There is so much to gain by collaborating at this crucial time in history. Africa is rich in resources. By partnering with the U.S., we create cleaner, greener, cheaper energy sources, and create jobs, which has the potential to put those dollars back into the global economy, namely our partners in the US.”
Is the Investment in Africa Worth It?
To make money, one needs to invest money. Such is the case with Africa energy. The first step is investing in infrastructure. Roads, railroads and pipelines all need to be put in place. Ayuk estimates it to be a $700B investment. The US has always made such investments, but lately they have been overshadowed by China. Almost stealthily, China is moving in where the US should be.
USAID administrator Mark Green seems to think investing in Africa is worth it and expresses his belief in collaboration. In the American Enterprise Institute live stream conversation about private sector engagement late last year, he was quoted as saying, “In public-private partnerships, which USAID and others have done for a long time, [they] are largely about contractual grants, contracting. Now, we’ll still do contracting and grant-making. But what we’re really talking about with public sector engagement is true collaboration.”
Ayuk adds that “We need to look at Washington as a partner in investment and not just aid. If we create the jobs, the need for aid will be replaced with self-sufficient people.”
Green also said, “…when USAID was formed, all the capital flows going from the U.S. to, say, Africa, about 87 percent was traditional development assistance. Now, it’s below 10 percent. And the rest is large scale philanthropy, you know, almost call it family philanthropy. We see the good work of parishes and congregations and synagogues around the country. But the largest piece is commerce. America has commercial interest, investment interests, and investment relationships in the developing world; that’s a fundamental difference. And if we’re going to accomplish all of our goals, we have to tap into that.”
Billions at Play Is the Roadmap the US Needs
NJ Ayuk has a practical approach and the answers in his book Billions at Play: The Future of African Energy and Doing Deals, releasing October 22, 2019. To make the objectives succinct and outline the path to collaboration, Ayuk stands as a leader to join the US and Africa and ensure everyone is on the right path. Healthy and competitive economies are a big part of the equation.
Ayuk says, “If African governments, businesses, and organizations manage Africa’s oil and gas revenues wisely, we can make meaningful changes across the continent, and this will benefit both our nations.”
In his book, Ayuk also stresses that Africa needs companies that are willing to share knowledge, technology and best practices, and businesses that are willing to form positive relationships in areas where they work. This partnering is key to success.
Why Is It Taking So Long?
This isn’t a new development. As a matter of fact, in December of 2018 the Trump administration started the African policy for primacy and partnerships. At that point in time, the outlook was quite hopeful that the administration would promote US business development on the African continent. The goal was to inspire Africa to choose the US instead of Russia and China regarding commercial and political relationships.
At the time, then ambassador John Bolton announced the Prosperity, Security and Stability strategy on December 13, 2018 and it was centered around the idea of advancing prosperity by ,“advancing U.S. trade and commercial ties with nations across the region to benefit both the United States and Africa; security, through countering the threat from radical Islamic terrorism and violent conflict; and stability, through foreign aid, while ensuring that U.S. taxpayer dollars for aid are used efficiently.”
Has the instability on the US political scene affected opportunities for growth? Hopefully the focus will shift again so that all involved can be prosperous. Now is the time for the US to become more proactively involved before it is too late.
Billions at Play is available to pre-order on Amazon Kindle now for the introductory price of $3.99 USD.
Let Go of the Past
Despite the fact that African markets hold great potential for growth for the US, particularly in the private sector for businesses and investing, the continent is dealing with a bad reputation from its past. However, that reputation is no longer valid.
According to the US Economic Engagement in Africa: Making Prosper Africa a Reality report by the Center for Strategic and International Studies, “Despite evidence of the significant economic opportunities present in the region, Africa has been mischaracterized by the American media as a continent of despair, and U.S. engagement with Africa has, for the most part, been a foreign assistance relationship.”
When Americans think about investing in Africa, thoughts of corruption, concerns about adversely impacting the environment, issues with public-private partnerships and the difficulties in making sure the people of Africa are truly being helped, come to mind. But the future is built on trust, collaboration and accountability.
Ayuk advocates for trust and transparency. “Transparency is no longer a catch phrase. It’s the future of doing business. Trust in people and the community means more gets done.”
Ayuk is realistic and knows American investment comes with the requirement to keep everyone involved accountable. Governments in Africa understand now, more than ever, that they must cooperate and create synergy to have success. There is amazing opportunities for American business to get in now and help Africa grow and prosper, contribute to the infrastructure, which ultimately grows U.S. investment and secures a place in a prosperous future for all.
Build for the Future because Billions Are at Play
As one of the leading energy attorneys in Africa, NJ Ayuk’s optimistic outlook on making Africa more equitable is what everyone needs. He says, “Africa is rich in resources. By partnering with the U.S., we create cleaner, greener, cheaper energy sources, and create jobs, which has the potential to put those dollars back into the global economy, namely our partners in the US.”
NJ Ayuk also makes the case for the petroleum industry having the power to support and transform emerging economies in Billions at Play. Africa is more than capable to learn from itself. The role of natural gas in Africa’s energy future, effective and sustainable investment strategies, strategic oil and gas revenue management and, the role of women in the African petroleum sector, are all key factors addressed in the book.