US companies pledge $14 billion to Africa

06/08/2014
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When it comes to growing a business, everyone from entrepreneurs to leaders of the biggest corporations will go wherever the best opportunities lie.

That’s why more than 100 CEOs of US companies have descended on Washington to meet hundreds of African leaders from the public and private sector. All this at the invitation of President Obama for the first US-Africa Leaders Summit.

The main event on the second day of the summit was the US-Africa Business Forum, co-hosted by Bloomberg Philanthropies and the US Department of Commerce.

During high-level panels throughout the day, leaders from both sides of the Atlantic discussed ways to build closer partnerships, break down barriers, and capitalize on Africa’s enormous untapped potential.

In recent years many American companies have realized that if they’re not doing business in Africa, they’re missing out while competitors step in. Indeed in the last 10 years alone foreign investment has soared from tens of billions of dollars to hundreds of billions. And as US Commerce Secretary Penny Pritzker pointed out, the continent’s GDP is expected to rise six percent annually over the next decade.

Statistics like those are catching the eye of US industry. And, as President Barack Obama told the summit on Tuesday, those businesses are now stepping up their game. President Obama announced that US companies have pledged to invest more than $14 billion in projects throughout the continent.

One of those companies is General Electric, which plans to invest $2 billion and double its African workforce by 2018. Jeffrey Immelt, the company’s CEO, spoke at one of the panels on Tuesday. When asked about what improvements he’d like to see, Immelt suggested that it would be helpful for African countries to form blocks, making it easier to strike deals and conduct regional business.

Another issue that the US feels should be addressed is energy. With that in mind, President Obama announced at the summit that the US is tripling its original goal of bringing electricity to 20 million homes in Africa that currently do not have it. He said the US and its partners now intend to bring power to 60 million homes and businesses.

Private sector investment and infrastructure are two issues that the African Development Bank has been integral in promoting in recent years. AfDB President Donald Kaberuka, who also participated in Tuesday’s panels at the US-Africa Business Forum, has emphasized these points.

Once investment and infrastructure are in place, Kaberuka told delegates in Washington this week, economic growth follows, leading to what he called "Economic Transformation."

The message has reached the United States, which is using the US-Africa Leaders Summit as a catalyst for greater investment in the continent.

Speaking about its relationship with Africa, President Obama said on Tuesday that he wants the United States to be “a good partner, an equal partner, and a partner for the long term.”