The United States is set to increase its investment in Africa once the “Better Utilisation of Investments Leading to Development (Build) Act of 2018” is passed.
It is set to reform and modernise government development finance by establishing the International Development Finance Corporation (IDFC).
According to US secretary of commerce, Wilbur Ross, the IDFC will allow America to more than double its investment portfolio compared to that previously held by its leading development finance institution, the Overseas Private Investment Corporation.
He noted that the US was looking to use this increased investment portfolio to target more projects in Africa in opposition to China, which has used its large investments in infrastructure on the continent to secure an economic foothold with “potentially serious consequences for US interests”.
“The United States must do more to present our African partners with better alternatives to state-led economic models, promoted by countries like China,” he said.
Ross said that, while China had offered billions of dollars in commercial loans at concessional rates to African governments, the country did not always apply the highest international standards of openness, inclusivity, transparency and governance.
“The United States seeks sovereign African states that are integrated into the world economy, able to provide for their citizen’s needs, and capable of managing threats to peace and security,” he added. “We oppose opaque investment and development initiatives that impose undue costs and burdens on recipients, limiting their options for determining their own future.”
Ross said that the Build Act would allow the US to participate in equity investments, provide technical assistance and issue catalytic grants to mobilise capital for projects advancing the country’s foreign policy objectives in low and middle-income countries.
