The U.S. government has launched Connect Africa, a program that will invest more than $1 billion in projects to improve transportation, communications and value chains across the continent.
The U.S. government will carry out the initiative through its development finance branch, the Overseas Private Investment Corporation. Over the next three years, OPIC plans to finance projects with companies in Zambia, Rwanda, South Africa, Kenya and Uganda.
Speaking at a news conference in Kampala this week, OPIC Chief Executive Officer Ray Washburne explained how the investments would help economic expansion in Africa.
The initiative will “give us additional capability, including equity investment in the projects. And so we are very aggressively looking throughout Africa,” Washburne said. Putting capital into projects shows "that the U.S. is committed to this region. In addition to that, we also want to be a multiplier for jobs.”
Early this month, OPIC committed $100 million in financing to a cellular communications company that will upgrade and expand telecommunication networks in Uganda, Gambia, Sierra Leone and the Democratic Republic of the Congo.
In Uganda, OPIC will invest $58 million in projects that include a hydropower plant.
Washburne stressed that by focusing on connectivity, the U.S. is not just helping to build means for economic development but is also laying the foundation for future trade partners, including women.
Women trying to grow their businesses “need access to capital,” Washburne said. “Having access to a bank account has been very difficult in the past," he added, but banking via mobile phones opens up possibilities — "especially in the smaller villages for women, because now their bank account is in their pocket.”
However, the Ugandan government recently imposed a tax on the use of mobile money applications. Washburne said he could not comment on local government laws.
The $1 billion in financing is small compared with the $60 billion that China has promised to invest in Africa.
Asked to compare the U.S. presence in Africa to China's, Washburne said “other countries” focus more on infrastructure, while the U.S. is focusing its investments on consumers and small or medium-size businesses, to help people further down the economic food chain.