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Arab News
27-03-2025
- Business
- Arab News
End of USAID should not mean the end of US support to Africa
Even when it comes to international aid and assistance, strategic geopolitical interests are at play. Secretary of State Marco Rubio this month announced the results of the review of programs carried out by the US Agency for International Development. It translated into 83 percent of aid being cut and the resulting impact on many African countries has reignited debates on the competition between the US and China on the continent and the heightened risk of humanitarian crises. Even if competition for influence in Africa is real, framing this under great power competition is a mistake. Indeed, both countries have taken a very different approach and this closure will probably not change China's plans, which are set in the long term. Moreover, USAID did not stop China from increasing its influence. However, this brings a potential new approach for US support — an approach that supports greater African responsibility and transparency. According to the Congressional Research Service, sub-Saharan Africa is the largest regional recipient of American foreign assistance. Over the past decade, the aid that the State Department and USAID have administered to Africa has been worth about $8 billion annually. Major recipients have included Nigeria, Mozambique, Tanzania, Uganda, Kenya and South Africa. In addition to direct US aid, African nations also receive assistance through other American agencies and Washington's contributions to multilateral organizations. This brings a potential new approach for US support — an approach that supports greater African responsibility and transparency Khaled Abou Zahr About 70 percent of American aid for Africa over the past decade supported health programs, primarily HIV/AIDS, with additional funding for agriculture, economic growth, security, the promotion of democracy and human rights, and education. Key multination initiatives like the US President's Emergency Plan for AIDS Relief, Feed the Future and Power Africa also support the region. Most aid is delivered through contractors, nongovernmental organizations and multilateral bodies, rather than direct government-to-government assistance. And this is probably one of the flaws that made USAID money less efficient. This situation is not specific to USAID; rather, it reflects how most foreign assistance programs and charities operate. It may come as a surprise, but a large portion of the funds cover administrative costs and running the projects, rather than directly supporting the core objectives. When it comes to cross-border programs, this burden is even higher. And so, in the end, positive change becomes less efficient and this was the case with USAID. This is why the US should not abandon Africa and give up on all its support. It should focus on bringing about real and positive changes while reinforcing African leadership. It is, to a certain extent, the same as Europe is going through with its security file. Africa deserves the generosity of the American people. Washington just needs to make sure it is well-allocated and executed. In short, it should be a reset, not a cancellation. This aid should not be motivated by ideological agendas. This is also what made USAID money less efficient. International aid should be aimed at solving real problems and curbing Africa's reliance on pure foreign aid. It is also an opportunity for African leaders to look for an approach that will build up their own economies. There are two main areas that need to be addressed: fighting poverty and empowering local management. Yet the urgency is on healthcare. Africa's predicament is that, despite its wealth in natural resources, which includes some of the world's largest minerals reserves, a variety of energy sources and large areas of arable land, it is still struck with extreme poverty. Competition between external nations in Africa is hence partly, if not mainly, about gaining control of the 30 percent of the planet's mineral reserves it homes. The significant deposits of gold, diamonds, platinum, copper and uranium, for example, have been a source of military confrontations for far too long. Africa deserves the generosity of the American people. Washington just needs to make sure it is well-allocated and executed Khaled Abou Zahr The same goes for its other resources. Indeed, Africa is also a major producer of oil and gas, with countries like Nigeria, Angola and Algeria leading in petroleum reserves, while North Africa, particularly Libya and Egypt, contributes heavily to gas production. Moreover, Africa has huge renewable energy potential and solar power could change the entire dynamic in the Sahara. While poverty and starvation still hit the continent brutally, we quickly forget that 60 percent of the world's uncultivated arable land is in Africa. It is already a leader in commodities like cocoa, coffee, tea and timber. The potential of fisheries makes Africa a resource powerhouse with immense economic potential. Unfortunately, while this all sounds good on paper, the reality is very different. The difference between theory and practice goes a long way. And so, we still need to question how foreign aid and its structure have impacted the continent's development and may have contributed to its ongoing dependence on such support. Moreover, while it has symbolically shifted the moral responsibility of progress from African leaders to Western powers, the reality is it has given the latter carte blanche to get their hands on vast resources in return for building just a few kilometers of road or a few wells. This is why, on a separate note, the Gulf Cooperation Council's approach has always been respected and accepted. This is why the end of USAID should not be synonymous with the end of US support to Africa. But any new program should be directed at helping Africa gain control of its own resources for its own development, not to prevent China or Russia from gaining ground but because it is the true spirit of US generosity and the right thing to do. This is how the US will make a true, long-term ally of Africa.
New York Times
07-03-2025
- Business
- New York Times
Fossil Fuels Are the Future, Energy Secretary Tells African Leaders
For the past two days, under the soft lights of chandeliers in a Marriott basement a block from the White House, energy ministers and tech founders from across Africa gathered to discuss how best to bring electricity to more than 600 million people on the continent who have none. Much of their hope, and fear, came from the whirlwind of change President Trump has brought to U.S. foreign policy, including the termination of Power Africa, a major initiative that had supported them for a decade. Was Mr. Trump abandoning them? Or might his promises of 'global energy dominance' be a boon? Attendees got at least a part of their answer on Friday morning. Chris Wright, the new administration's energy secretary, took the stage and gave an impassioned speech on how concerns over climate change should not prevent Africa from charging ahead with fossil fuel development. 'This government has no desire to tell you what you should do with your energy system,' he said. 'It's a paternalistic post-colonial attitude that I just can't stand.' His remarks came just weeks after the administration shuttered Power Africa, which had financed tens of millions of electricity connections since its start under President Barack Obama in 2013. Africa, like the rest of the world, faces an immensely consequential choice: exploit fossil fuels that contribute to global warming, or forge a new path with renewable energy. Mr. Wright said Africa simply needed more energy of all kinds, including and even especially coal, one of the most polluting fossil fuels. 'We've had years of Western countries shamelessly saying don't develop coal, coal is bad,' Mr. Wright said. 'That's just nonsense, 100 percent nonsense. Coal transformed our world and made it better.' And while Mr. Wright said climate change was a 'real, physical phenomenon,' he said it wouldn't make a list of his top 10 problems facing the world. Mr. Wright's appearance on Friday was met with roaring approval. His remarks were in line with what many African energy developers have been urging for years. They say the persistence of energy poverty is a blight on the continent's development, and Western skittishness to invest in energy projects, whether because of concerns over governance or greenhouse gas emissions, is akin to keeping Africa down. Africa's population is growing faster than current electrification rates. Officials often buck at the suggestion they should opt for clean-energy technologies to help fight climate change, instead of using their own abundant supplies of fossil fuels, given that their countries have contributed nearly nothing historically to the emissions that cause global warming. Other countries used fossil fuels for generations to build prosperity, the argument goes, so why shouldn't they? Other U.S. officials speaking at the summit said that, with Mr. Trump in office, the days of shying away from fossil fuel investment in favor of renewables were over. 'When we say 'all of the above,' you might ask, is that code for carbon? And yes, it is code for carbon,' said Troy Fitrell, a senior State Department official and former ambassador to Guinea. 'There are no restrictions anymore on what kind of energy we can promote.' African executives in their own speeches said that they hoped they would get more investment and fewer regulatory hurdles. 'We can't wait for three years, or even half that time,' to do environmental or social impact assessments on a project, said Akinwole Omoboriowo II, who leads Genesis Energy, a company focused on renewable energy. 'People are dying without the chance to watch TV,' he said, to a murmur of chuckles. 'I just think we should think about that.' Mr. Wright's remarks left major questions unanswered and did not detail how much or where the U.S. government would invest in African energy access. Would he seek to revive Power Africa but change its mandate? Might he bring its responsibilities under his own department? (Previously, Power Africa's budget fell under the U.S. Agency for International Development, which the Trump administration has all but eliminated.) What he did offer was a pro-Africa message at a time when his boss has unnerved Africans. Mr. Trump froze aid to South Africa last month and accused its government of using a new land law to discriminate against white citizens. Many African officials fear his administration will end the African Growth and Opportunity Act, a decades-old trade agreement that allows 32 African countries to send billions of dollars of goods to the United States duty-free. And in his speech to Congress on Tuesday, Mr. Trump made a dismissive mention of Lesotho, saying 'nobody has ever heard of' the country. Conspicuously missing from the gathering were representatives of the American agencies that had taken a lead on energy initiatives in Africa: U.S.A.I.D. and the U.S. International Development Finance Corporation, which Mr. Trump created in his first term but whose billions of dollars of investments are currently frozen. The meeting rooms were full of former Power Africa officials, however, and they questioned whether the Trump administration would muster much follow-through. 'The biggest question is whether the U.S. can be a credible partner when we've just dismantled our main mechanism for investing in African energy,' said Katie Auth, the former deputy director of Power Africa. She and others acknowledged that an increasing focus on low-carbon energy made the program a target for an administration that is hostile to what its officials often call the 'climate change alarm industry.' But Ms. Auth also noted that not only did Power Africa invest in gas, but that the plummeting cost of renewable energy technology has made those forms of power the fastest and cheapest to deploy in many African countries. 'I think they don't realize that Power Africa was never a climate initiative,' Ms. Auth said. 'It was driven by economic viability and driven by U.S. firms.' She added, 'If anything, this is the encapsulation of the kind of assistance this administration should want to do.' Planet-warming emissions aside, gas investment also collides with an additional hurdle: weak power grids. Building more gas-burning power plants would require building far more electrical transmission lines. That's a key difference with solar, which can be built on a much smaller scale locally, so it doesn't necessarily require huge, sprawling networks of power lines. Rosemary Oduor, a top official at Kenya Power and Lighting Company, the country's state-owned utility, described African grids as 'old trees growing heavy with fruit.' Without huge investment in their modernization, and without major subsidies, she said, bringing new power sources online might only make them more likely to fail.
Russia Today
07-03-2025
- Business
- Russia Today
US pulls out of South Africa energy deal
The electrification of South Africa's informal settlements through a United States Agency for International Development (USAID)-driven Power Africa's five-year electrification initiative with 24 municipalities - part of an ambitious government plan for universal energy access by 2030 - is among the first projects to be shelved. This follows the US formally announcing it is cutting its Just Energy Transition (JET) partnerships with South Africa, a decision confirmed to the Presidency last week. The US has decided to withdraw from the Just Energy Transition Partnership (JETP), a coalition of 10 donor nations working to assist developing countries in transitioning from coal to cleaner energy sources, according to several sources involved in the partnership cited by Reuters. The JETP was first introduced during the United Nations (UN) climate talks in Glasgow, Scotland, in 2021, with South Africa, Indonesia, Vietnam, and Senegal named as the first recipients of loans, financial guarantees, and grants to support their shift away from coal. In a statement yesterday, the Just Energy Transition Project Management Unit (JET-PMU) in the Presidency confirmed the US's exit from the JETP with South Africa and its departure from the International Partners Group (IPG). The US's 2021 pledges to South Africa's JET Investment Plan (JET IP) comprised $56 million (R1 billion) in grant funds and $1bn in potential commercial investments by the US International Development Finance Corporation (DFC). No concessional loans were offered by the US to South Africa for the JET IP. Joanne Yawitch, head of the JET-PMU in the Presidency, said: 'The withdrawal of the US from the JETP reduces the current overall international JET pledges to South Africa from $13.8 billion to $12.8 billion, largely in respect of commercial investment potential.' She added that the JET-PMU is actively engaging with other grant-making organisations to source alternative funding for JET projects previously designated for support from the US grant funding. Additional sources confirmed the US had withdrawn from the JETP in Indonesia and South Africa, while two foreign officials in Vietnam, according to Reuters, verified the US was pulling out of the JETP there too. One official indicated the US was exiting all JETP programmes, including those in Indonesia. The decision will now likely mothball the investment commitments made by the DFC. The Power Africa programme, part of USAID's Impact on Electrifying South Africa's Informal Settlements, has already been initiated in the Kouga Local Municipality in the Eastern Cape. According to the JET-PMU, it has so far connected more than 700 informal dwellings to the grid and increased capacity availability for newly constructed low-income houses. This programme, in partnership with Denmark, the European Union, France, Germany, the Netherlands, and the UK, aims to support the South African government in meeting its decarbonisation commitments while delivering just outcomes for those affected by the energy transition. The US's commitment in support of JET has also funded activities in the Electricity, Mpumalanga Just Transition, Skills, and Municipalities portfolios of South Africa's JET Implementation Plan. Analysts said the withdrawal of the funding, which had been earmarked for various projects including green hydrogen, electricity infrastructure, and skills development, may also impact the overall momentum of South Africa's energy transition. The JETP was seen as a key catalyst for driving investment and innovation in the renewable energy sector. Despite the US's withdrawal, Yawitch said, 'South Africa remains steadfast in its commitment to achieving a just and equitable energy transition. All other IPG partners remain firmly committed to supporting South Africa's JET IP.' A source, who declined to be named, added that there is still significant finance available and the IPG remains fully committed to the partnership. 'The US's withdrawal may have broader implications for the global effort to address climate change, as the JETP was seen as a model for supporting developing countries in their transition to cleaner energy,' the source published by IOL
Yahoo
03-03-2025
- Business
- Yahoo
China won't ‘replace' USAID in Africa
The Trump administration's decision to freeze billions of dollars in foreign assistance creates an opportunity for China to strengthen its presence in Africa, but Beijing will not step in to replace the decades-old aid programs now coming to an end, say China-Africa analysts. Semafor spoke to nearly a dozen China-Africa analysts in recent days who said that China was set to position itself as a reliable partner in the face of the uncertainty unleashed by the US shuttering programs such as those run by the US Agency for International Development (USAID). But even then, few of the analysts thought there would be notable change in China's overall approach in Africa in the short to medium term. 'The idea that the dismantling of USAID opens the door wider for China in Africa is a misdirection,' said Hannah Ryder, CEO of Development Reimagined, a development consultancy. 'They don't give aid in that way, so they can't 'replace' USAID.' Eric Olander, editor of China Global South Project, agreed: 'It absolutely is an opportunity for China but not in the obvious ways.' He said it is more likely that China steps up with headline-grabbing moves as it did with the provision of vaccines in some African countries early during the COVID-19 pandemic. While China has spent tens of billions of dollars through trade and infrastructure project loans in Africa over the last decade it spends significantly less on aid. Around half of its $3 billion aid budget is deployed on the continent. USAID managed a budget of up to $50 billion last year, running nearly 6,000 humanitarian, health, and developmental projects around the world. It has had a significant impact on African economic development projects, such as Power Africa and Prosper Africa, many of which are now either paused or completely shut due to the funding freeze imposed by US President Donald Trump's executive order in January. USAID is expected to slash its staff of 10,000 to about 300 with just about a dozen workers left to focus on Africa within the US State Department. China's presence in Africa, which has ramped up over the last two decades, has traditionally focused on trade, technology, infrastructure, and security rather than humanitarian aid or health, said Ronak Gopaldas, an analyst with Cape Town-based Signal Risk. 'But Trump's America First approach will create some geopolitical opportunities for China to step into a leadership void in Africa,' he noted. Olander said any moves by China would not be on a comparable scale to the US' traditional efforts. Last month China and South Korea sent $4 million to the Africa Centres for Disease Control to help plug some of the immediate health funding gaps left by the US aid freeze. But that number was set against cuts of $115 million by the US from its previous pledge of $500 million. 'We shouldn't expect to see the Chinese try to match USAID because they don't have the infrastructure to do that and it's not in their diplomatic DNA to run large aid programs.' There has been plenty of speculation in recent months about how the expected 'transactional' nature of a Trump 2.0 administration would play out in Africa. If you want some idea of how that might work, look no further than how the Chinese have operated on the continent for the last 20 years. Their emphasis has always been on dealmaking, transactional partnerships, and 'win-win' agreements. Africa has been an important setting for Chinese global economic expansion. Even as the US focused on building legacy infrastructure systems for delivering vital humanitarian and health programs, China was busy building actual physical infrastructure of bridges and roads. Both were always needed across most African countries, and it could be argued — despite the misleading talk of Chinese debt traps — that the last 10 to 15 years has been a fertile period for African governments hoping to develop with US humanitarian aid and Chinese infrastructure support. Sanjeev Gupta, a veteran development finance consultant who has partnered with Chinese companies on projects across the continent, said African governments have a deeper relationship with China than many realize. 'China has a much more elevated game with a nuanced understanding of the terrain in a way that the US does not,' said Gupta. However, that deeper relationship could evolve into a dependency if the US leaves the field for China in many countries, notes W. Gyude Moore, a non-resident fellow at the Center for Global Development in Washington. 'Every state seeks to diversify its partnerships to prevent a dangerous dependence on a single actor,' he said, noting China is already Africa's largest trade partner and bilateral creditor. 'The US withdrawal only increases China's importance making it arguably the only game in town.' Even if China had ambitions to fill in the aid funding gaps left by a US exit, it might not be able to do so given its own economic challenges and growing domestic concern about spending abroad, said Atlantic Council's Alexander Tripp. 'It's unclear if China has the capability and capacity to do what the US traditionally has done,' he told Semafor. Tripp pointed to a few 'soft power' pushes by China including the 'Peace Ark,' a Chinese hospital ship that docked in South Africa last year and that Chinese leaders have 'been eager' to highlight. 'But initiatives like this are more one-offs.' If the US employs a more transactional approach with Africa it could result in more strategic projects like the Lobito Corridor, a project inaugurated by the Biden administration in Angola last year, particularly as the race for rare minerals needed for electric vehicles and green energy projects accelerates. That could see the US take on China in a sector in which the Asian giant currently leads, especially in the processing of these rare earth metals.
Yahoo
30-01-2025
- Business
- Yahoo
Trump's aid freeze upends lifesaving global climate and energy initiatives
The Trump administration's freeze of foreign aid funding has brought lifesaving work on climate adaptation and clean energy in dozens of countries to a 'screeching halt,' humanitarian officials told Semafor. Trump ordered a 90-day pause to all foreign aid programs last week, which has upended a wide range of humanitarian and development programs backed by agencies such as USAID. Among the programs affected are Power Africa, which supports energy access across the continent (USAID was absent from a major summit on African energy issues in Tanzania this week), aid for rebuilding Ukraine's devastated energy system, and basic humanitarian support in most of the world's most climate-vulnerable countries. USAID's most recent climate mission statement says the agency aims to eliminate 6 billion tons of CO2 by 2030, and to improve the climate resilience of 500 million people, goals that are unlikely to survive under Trump. Because the US is almost always the top funder of humanitarian aid in the countries where it works, the freeze puts hundreds of thousands of lives at risk, said two senior NGO officials, who requested anonymity to avoid becoming targets of the administration. Moreover, it eliminates opportunities for US energy companies, clean and fossil, who worked through federal aid agencies to find investment opportunities in challenging locations. And it creates an opening for China, with plenty of its own energy aims, to step into the soft power vacuum. 'The devastating short-term impacts will be bad enough,' said Katie Auth, policy director of the Energy for Growth Hub and a former senior USAID official. 'But the chaos and uncertainty this freeze has created will do lasting damage. They undermine US credibility as a dependable partner at the very same moment we're gearing up to use our development finance agencies to go big on risky investments in supply chains and infrastructure.'
