Billions promised to Africa – here’s how it would be spent

IT is summit season in Africa. The US-Africa Leaders Summit is the second major meeting this year, following the EU-Africa summit in March, and comes hot on the heels of similar summits with France, Japan and Arab nations last year.

Later this year India will hold its second triennial summit with African leaders, as Beijing’s flagship Forum on China-Africa Co-operation waits in the wings for next year. 

These summits have recently been similar in that they are carefully wrapped in varying degrees of “co-operation” and “equal partnership” talk, but despite this the headlines are usually around the money and investment promised. 

We take a look at the numbers announced so far: (Quoted exchange rates reflect the time the deal was announced.)

1: United States, ($33-billion), August 2014

President Barack Obama has become the first American leader to convene a summit of such magnitude with African heads of state, with the US-Africa summit themed around investment, security and rights issues.

On Tuesday, Obama announced $33-billion in commitments, with American companies planning $14-billion worth of investments in Africa, and his Power Africa drawing an additional $12-billion in commitments to go with the initial $7-billion it had attracted.  

An official said the investments will span a range of industries, including construction, clean energy, banking and information technology.

While the US remains the largest source of investment on the continent, this has been largely in the oil and gas sector.

China’s trade with Africa overtook US volumes in 2009, and was estimated to have reached $210-billion last year; double that of its rival.

China and Europe have built stronger positions in infrastructure, manufacturing and trade, but the US is angling for big energy contracts, especially on the back of Obama’s $7-billion Power Africa plan.

Africans criticise US businesses as bound too deeply to old stereotypes and too risk-averse to plunge into business with them, even though the continent is growing faster than any other region on the globe.

2: European Union, ($39-billion), March 2014

The fourth EU-Africa summit in March struggled with the sideshows of who was not invited, including Zimbabwe President Robert Mugabe’s wife. South Africa president Jacob Zuma did not also attend in protest over the Mugabe saga.

However when the summit got down to business in Brussels some 50 African countries were represented, including 36 heads of state. The EU is far and away Africa’s biggest development partner, providing more than 140-billion euros ($187-billion) in aid between 2007 and 2013, including 18-billion euros in 2012 – nearly half the world’s aid to the continent.

The EU also had more bilateral trade with Africa than China did with Africa, at $321-billion last year, despite a decline in 2012. 

At the end of the summit officials announced they would offer 28-billion euros ($39-billion) in grants over six years to fund a range of projects, including peacekeeping, agriculture and development. Some of the cash would also promote regional integration.

3: France, (unquantified), December 2013

While no headline billions were announced when French president François Hollande met 40 African leaders in Paris in December 2013, analysts noted that the country had lost market share across the region, despite wielding significant influence on account of its security operations.  

The European power’s share of African trade has fallen from 10% to 4.7% over the last decade.

Hollande said France “must double trade with Africa” over the next five years, noting that this could add at least 200 000 jobs to the French economy. France’s current trade with Africa is 30-billon euros ($40-billion). 

Paris will also double aid to Africa from 10-billion euros ($13.6-billion) to 20-billion euros over the next five years.

The final communiqué zeroed in on integration, financial transparency, skills training, Economic Partnership Agreements. An Africa-France business meeting is also on the cards,  in addition to other major economic meetings.

4: Japan, ($32 billion), June 2013

The fifth Tokyo International Conference on African Development in June 2013 saw prime minister Shinzo Abe offer 3.2-trillion yen ($32-billion) in aid and investment to Africa over the next five years.

Of this, official development assistance (aid) was 1.4-trillion yen ($14-billion), with the balance being public and private resources. Some 200-billion yen would also be used to underwrite trade insurance, while 650-billion yen ($6.5 billion) would be allocated to infrastructure. Of note was that the cash would be used as African nations saw fit.  

Other areas would be scholarships for 1 000 African nationals over five years, and cash towards a Japanese-style healthcare plan. 

About 40 African heads of state and government officials attended the opening of the summit that is held every five years.

To follow up, Abe visited Africa in January, the first Japanese premier to do so in eight years, stopping at the AU headquarters in Ethiopia and in Cote d’Ivoire and Mozambique. 

Japan trades only 2.7% with Africa, compared to 13.5% for China.

5: China, ($20-billion), July 2012

The Fifth Ministerial Conference of the Forum on China-Africa Co-operation in July 2012 was, as expected, a spectacle.

Then-president Hu Jintao offered $20-billion in loans to African countries over three years, twice the amount pledged in the preceding three years. The new loans would mainly go into infrastructure, manufacturing and agriculture, he said.

In July this year, China released a new white paper on its foreign aid, the second such document in its history. Aid to Africa saw the largest increase since the previous document published in 2011, to reach 51.8% in 2012. 

Analysts have also noted that concessional loans now make up the majority of China’s aid financing, while zero-interest loans are down to single digits – 8.1% from close to 30% three years earlier.   

China is now Africa’s biggest trading partner, with 2013 trade figures of $211-billion.

China’s “cheque-book” model has, however, been coming in for criticism by those who see it as short-term and resource driven. But at the 2012 summit Hu said China firmly supported Africa’s chosen development path, a position that resonates with many on the continent. 

“We are certainly convinced that China’s intention is different to that of Europe, which to date continues to intend to influence African countries for their sole benefit,” South Africa president Jacob Zuma said.

 6: Arab-Africa, (unquantified), November 2013

The third Arab-Africa summit in Kuwait saw the host country announce $2-billion in development and investment on “easy terms”.

Kuwait is the largest investor from the Arab region in Africa. 

Saudi Arabia signed a clutch of economic deals with specific African countries that were valued at $140-million, as did other Arab countries. A lot of the cash will go into energy infrastructure development.

The oil-rich Gulf countries, which are mostly arid, appreciate Africa as a source of food and arable land.

It was agreed that the summit, held after every three years, will be hosted in Africa in 2016.

7: India, ($5 billion), May 2011

Ahead of the second-ever India-Africa summit this year, New Delhi will be looking to improve on its last deal with the region which saw then leader Manmohan Singh offer $5 billion.

This deal was mainly as lines of credit over the next three years. The amount was double the previous $2.15 billion. 

Singh also offered an additional $1-billion for new training institutions and country-specific infrastructure, leveraged on India’s “soft-power approach” model.

At Addis Ababa 15 African heads of state attended, with 45 countries represented, but New Delhi will look to improve on this, using its deep historical links with the continent as an effective bargaining card.

India imports 70% of its crude needs, and the International Energy Agency expects internal demand to double by 2030, while it has also been active in growing its food on African land.

The Asian country’s bilateral trade with Africa in 2013 reached $93-billion, up from $3-billion in 2001, beating projections of $70-billion by 2015.

Consultants McKinsey report that Indian companies should quadruple their revenues from Africa to $160-billion by 2025.

Twitter @LMAfrican


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