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Obama’s $7bn power plan for Africa

"We see this as the next phase in our development strategy and a real focal point in the president's agenda going forward," deputy national security adviser Ben Rhodes told reporters travelling with the president.

Obama is midway through a three-country tour of Africa and is due to give what aides bill as his fullest description of his vision for the US relationship with the continent on Sunday.

The president has chosen historically resonant locations for the address, and is due to speak at the University of Cape Town after touring the prison on Robben Island. Robert F Kennedy's 1966 speech at the university linked the struggles against apartheid and the US civil rights movement and was seen as giving encouragement to the movement.

The president will cite South Africa's long struggle to defeat apartheid and the US civil rights movement's success in overcoming racial inequality as models of movements that brought about change in the face of daunting obstacles, aides said. He will call on young Africans to summon similar energy to complete the work of those movements and to firmly establish economic growth, democratic government, and stable societies across the continent.

Obama has been faulted for lacking a grand programme to benefit Africa such as the HIV and Aids initiative launched by president George Bush or the broad reductions of trade barriers achieved by president Bill Clinton.

Many Africans have been disappointed at what they see as Obama's hands-off approach to the continent, noting that his first extended trip the continent has not come until his second term in office despite his African ancestry. Obama's father was a native of Kenya.

The president's aides say he has been held back by the need to wind down two wars and to right the US economy after the worst economic downturn since the Great Depression.

Despite severe US budget constraints, the power initiative could provide Obama with just such a signature programme.

'Darkness by night'

Experts agree that the lack of electricity is a tremendous hindrance to Africa's advancement.

"Africa is largely a continent of darkness by night," said an official at a multilateral agency who spoke on condition of anonymity. "Every which way you look at this, Africa is behind the curve and pays more."

Roughly two-thirds of sub-Saharan Africa lacks power, a level that rises as high as 85% in rural areas, White House aide Gayle Smith said.

Lack of power inhibits business investment, prevents children from studying after dark, and makes it harder to keep vaccines from spoiling in rural areas, she said.

The United States will initially work with Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania to develop electric power generation, officials said. It will also cooperate with Uganda and Mozambique on oil and gas management.

The programme will draw on a range of US government agencies to achieve its goals. For example, the US Overseas Private Investment Corporation will commit as much as $1.5-billion in finance and insurance to help US companies manage the risks associated with the projects.

Similarly, the US Export-Import Bank will make up to $5-billion available to support US exports to develop power projects, the officials said.

The private sector will also be involved. Officials said General Electric has committed to power generation projects in Tanzania and Ghana, officials added.

The president's trip has taken him to Senegal and South Africa and will wind up in Tanzania on Monday and Tuesday. Although concerns over the ailing health Mandela have overshadowed much of the trip, the president has sounded the theme of Africa's economic potential at every stop.

In keeping with that emphasis, Obama will also announce that he plans to hold a summit of sub-Saharan African leaders in Washington next year.

"It's something other countries have done," Rhodes said. "What we want to do is continue the kind of high-level engagement we've had on this trip."

No threat in China rivalry

The US does not feel threatened by the growth of trade and investment in Africa by China and other emerging powers, Obama said on Saturday.

Suggestions that he has allowed China to steal a march over the US in doing business with Africa have dogged Obama's trip, but he said the increased Chinese engagement was beneficial for all.

"I don't feel threatened by it. I feel it's a good thing," Obama told a news conference.

The more countries invest in Africa, the more the world's least developed continent can be integrated into the global economy, he said.

"I want everybody playing in Africa. The more the merrier."

China has greatly expanded its reach in Africa since the start of the new century. It overtook the United States as Africa's largest trading partner in 2009, a February report by the US Government Accountability Office (GAO) showed.

China's advantage in trade stems mostly from how much it sells to Africa. Chinese exports to the continent in 2011 were almost triple the level of US exports.

When it comes to investment flows, however, the picture is different. Data for 2007-2011 suggest US foreign investment flows to the region were larger than China's, the GAO said.

"China's role as an investor, aid donor and financier is not outsized," Johns Hopkins University China scholar Deborah Brautigam wrote recently.

"Although Western countries fret about China's growing role in Africa, the United States alone disbursed more official finance to African countries than China did in 2010."

Still, China's influence looms large over the continent, partly because it has been so aggressive in its courtship.

Beijing and Washington should be partners in Africa to foster development and peace, said an official Chinese commentary after Obama's made his remarks.

Obama's stops in South Africa and Tanzania mirror a visit in March by then newly named Chinese President Xi Jinping, which could be seen as rivalry between the two superpowers on the African continent, state-run news agency Xinhua said.

"This mentality belongs to the past. It results from the West's biased perception of China's role in Africa," Xinhua said. "It also misses the bigger picture in which Beijing and Washington, instead of being competitors undermining each other's efforts, can actually work as partners in promoting Africa's development."

In Pretoria on Saturday, Obama urged African nations to be tougher negotiators in accepting investments from abroad.

"You produce the raw materials, sold cheap and then all the way up the chain somebody else is making the money and creating the jobs and the value," he said.

"Make sure that whoever you're dealing with … you're getting a good deal that's benefiting the people here and that can help to spur on broad-based development." – Reuters

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