It’s easy to joke about the USA’s new Power Africa/Electrify Africa initiatives being a reboot of the Milton Friedman/Jeff Sachs “Shock Therapy”. The one that did such damage…I mean wonders…in Russia and other emerging economies.
Here’s why it might not be so funny: the USA is about to make control of African oil/gas and military operations the core of its new Africa policy, and that oil/gas is coming from the same countries whose resources China wants to monopolize.
A Powerful Headache
With nearly 600 million Africans without electricity, this legislation, originally offered in the 113th Congress, will leverage public and private sector resources to extend electricity access throughout Africa, to help 50 million Africans with first-time access to electricity and to add 20,000 megawatts of electricity to the grid by 2020. Source: Corker, Cardin Reintroduce Electrify Africa Bill
The Power Africa initiative has the goal of creating 10,000–30,000 Megawatts of electrical capacity by 2020 (yes, five years from now). Presumably any effort to meet that 20k MW goal will involve some combination of nuclear, oil and gas. (To put things in perspective, the largest nuclear plant in the USA has a capacity of 3,937 Megawatts).
It’s ludicrous that the U.S. is going to mastermind the generation of 10–30k MW using primarily green/renewable energy (unless you count nuclear). American companies do *not* lead in green/renewable energy. That’s not our forte.
Neither is successfully handling African economic and foreign policy.
America’s only significant import from Africa countries is oil and the USA has been divesting itself of African oil/gas for years. There has *never* been a strong U.S. position in African countries unless you count religious missionaries and the Aid Industry. The economic, political and military involvement never mattered much outside of North Africa, which has always been grouped together with the Middle East as far as policy makers are concerned.
Perhaps that’s why U.S. government interventions in Africa are rarely successful, aside from humanitarian aid (an astonishing mix of helping and harming at the same time) and anti-AIDS/HIV programs like PEPFAR.
* Backing the ouster of Qaddafi leading into the current Libyan civil war and the attempted overthrow of the Malian government
* Backing the South Sudanese secession from Sudan, leading into the current South Sudanese civil war
* Failing to capture Lord’s Resistance Army leader Joseph Kony
Costs and Benefits
Not to fear though, because the primary U.S. private sector partner in Partner Africa is General Electric. They’re going to get a lot of U.S. government money, on and off the books.
General Electric will be perhaps the biggest beneficiary of that $7 billion in U.S. taxpayer funds that Obama says will underwrite Power Africa[…] G.E. CEO Jeffrey Immelt, who until early this year chaired the president’s Council on Jobs and Effectiveness, is accompanying Obama on his Africa trade mission. Immelt will clearly appreciate a financial backstop from Uncle Sam.”
Source: Obama’s ‘Power Africa’ Plan Greases Billions In Deals For General Electric
One can be certain that G.E. is taking the lead on this incredibly sensitive political-economic issue because of their unshakable ethics. Never mind that whole “oil for food” deal they made with Saddam Hussein’s government in Iraq.
The infrastructure needed to construct and feed those plants is huge. Not to mention the extraction and processing of the fuel. We’re talking huge companies. A casual estimate is $300 billion, and since the estimates for massive projects are virtually always low-balled, one can only imagine what the real costs will be.
The ostensible beneficiaries — the citizens of African countries partnered with Power Africa — certainly can’t foot the bill. Perhaps their governments will take our more million dollar loans from the IMF or the World Bank, and then use that money to pay U.S. companies for their services.
High Tension Wires
Huge contracts. Huge government involvement. Not to mention huge security operations. Those are three “Huges” that make me nervous when we’re talking about massive U.S. government intervention in African countries.
The track record isn’t great. The major conflicts underway in African countries are almost entirely driven by political/military elites fighting over resource wealth (gold, petroleum, et al.).
Yet USAID and the Obama Administration describes Power Africa as an initiative to “build local capacity”. Sounds about as “local” as the U.S. Department of Africa defines “organic”, i.e. “it means whatever the hell the policy makers want it to mean.”
Where is the fuel going to come from? It’s not like the USA going to export its own oil/gas to the African continent. The suppliers will be resource-rich African countries like Libya, Nigeria, Angola and South Sudan. All of those places have either oligarchic-authoritarian governments, militant insurgencies, or both.
Now combine all that with the ongoing U.S. military buildup on the African continent as detailed by journalists like Nick Turse and plenty of local observers in African countries.
Oh and this is all on the continent upon which rests the newly announced American “pivot to Asia”. China imports 23% of its oil from African countries. Minerals make up about 80% of China’s annual $166 billion trade with African countries.
What you get is a U.S. Africa policy that is based on extractive resources, authoritarian governments and military force in competition with the USA’s main military rival, on a continent where the USA has weak strategic footing.
What could possibly go wrong?