The Next Liberal Order
The Age of Contagion Demands More Internationalism, Not Less
In the first week of August, official delegations from 50 African countries came to Washington to attend the U.S.-Africa Leaders Summit. The meeting was typical in its extraordinary pageantry, overzealous security, and relative lack of tangible accomplishments. Washington's primary goal seemed to be to demonstrate that it hadn't forgotten entirely about Africa, and most of the policies under discussion were symbolic. In the end, U.S. companies -- including Coca-Cola, General Electric, and IBM -- announced some $14 billion in new investments; the White House announced modest new security programs to boost cooperation in counterterrorism and peacekeeping. These were admirable steps, but they are transformational for neither Africa nor U.S. policy toward the region.
Yet there was one outcome with the potential to become much more. U.S. President Barack Obama announced an ambitious expansion of the Power Africa initiative that he first launched during a trip to Tanzania last summer. The program aims to help close the massive gaps in electricity generation and access in six African countries: Ethiopia, Ghana, Kenya, Liberia, Nigeria, and Tanzania. The original goal of the program was to produce 10,000 megawatts of electricity-generating capacity. During the summit, those targets were tripled to 30,000 megawatts. Through this, Power Africa aims to create new power connections for at least 60 million households and businesses. These new goals could mean that up to 300 million people will acquire access to reliable and affordable electricity (assuming a reasonable average household size of five people) for the first time. Put differently, Obama has just committed publicly to help provide power for fully half of those Africans who currently lack it and put Power Africa at the very center of Washington's diplomacy efforts in Africa. That is a good thing. It is also likely to be the Obama administration’s last chance to salvage his legacy in Africa.
In his first term, Obama's Africa policy was notable mostly for its apathy and false starts. Officials in African capitals could hardly believe the stark contrast between Asian and European countries’ embrace of the continent and the Obama administration’s barely disguised neglect, especially given how involved its predecessors had been. In his first term, U.S. President Bill Clinton oversaw historic cuts in financial assistance to Africa and faced sharp criticism for not doing more to prevent the Rwandan genocide, but by the end of his second term, he was widely praised for emphasizing the importance of trade to Africa. U.S. President George W. Bush, to the surprise of many, was deeply interested in Africa. He launched both a massive effort to fight HIV/AIDS and a whole new agency to provide grants to poor but well-governed countries. Bush also personally engaged in efforts to peacefully end conflicts in Africa, including in Liberia and Sudan. The Clinton and Bush legacies -- the African Growth and Opportunity Act, the President’s Emergency Plan for AIDS Relief, and the Millennium Challenge Corporation -- are still with us today.
Power Africa could rival those initiatives. With its focus on electricity generation, it is a direct response to what African allies have been saying they want from the United States. By contrast, most of Washington’s efforts in Obama’s first term, such as the repackaging of global health programs and a climate change initiative, were cooked up in the bowels of the Eisenhower Executive Office Building in Washington without input from African leaders. It should be no surprise that they quickly fizzled out. But electricity is something everyone agrees on. Every country on the continent has significant electricity shortfalls, and in nearly every economy, this is a leading barrier to future economic growth. Nigeria, for instance, produces only about 4,000 megawatts of power, but estimated demand is more than ten times that amount. In Tanzania and Kenya, fewer than one in five citizens has access to any regular power at all. Overall, some 600 million Africans live every day without access to power. Energy production was such a refrain in African capitals that the White House eventually seized on it as a signature issue.
Power Africa has another thing going for it. It represents exactly the kind of modern public-private effort that is on the cutting edge of development policy. The old aid model of viewing African nations as passive recipients of American generosity is dying in an age of declining budgets for grants, increasingly numerous sources of financing for developing countries, and rising incomes across Africa. Even the poorest countries, such as Liberia, are more eager for private investment in infrastructure than for grant aid for social services. The Obama administration listened to Africans and recognized that the days of ever-higher budget requests were over.
Power Africa uses a range of public policy tools -- commercial debt, technical assistance, risk insurance -- to encourage policy reform and private investment in Africa's power sector. The administration initially committed up to $7 billion in public or publicly guaranteed funds (although much of this will never materialize) from a host of agencies, including the Overseas Private Investment Corporation (OPIC), the U.S. Export-Import Bank (Ex-Im), the U.S. Agency for International Development, and the U.S. Trade and Development Agency. It also garnered private commitments from U.S. and African investors now totaling more than $20 billion.
In this case, government involvement has helped to mitigate the long-term commercial and political risks -- and thus unlocked private investment. Power Africa will likely also have spillover foreign policy benefits. At a time when Africa is more important than ever to U.S. national security and economic interests, it is essential that Washington show it can be a reliable partner. Each of the six countries involved in Power Africa are important allies in the fight against terrorism, international criminal cartels, and deadly diseases. By showing that it is responsive to those countries’ power needs, Washington can expect greater cooperation in these other areas, as well as more open markets for U.S. companies.
There are, of course, still questions about how Power Africa will work. The bulk of the funding is expected to come from Ex-Im and OPIC, two government agencies that face highly uncertain reauthorization prospects in Congress. OPIC in particular could play a much greater role but remains hamstrung by outdated rules and policies that prevent it from catalyzing even more private investment. It could easily be modernized and expanded without any additional new funding, but so far the White House has shown little appetite to take on that task.
It is also not yet clear how the White House plans to track Power Africa's progress. For those administering public health programs, such as the President’s Emergency Plan for AIDS Relief, it has been relatively easy to count condoms bought, medicines delivered, and patients treated. With power projects, however, there are many more moving parts. Washington will have the incentive to take credit for all new power generation and access in the relevant African countries. But such claims wouldn’t be remotely credible and would be irksome to other actors who are making important contributions. The African Development Bank and France and Japan have been active in Africa’s power industry for years. If China builds a hydroelectric dam in Ghana and the United States sends an adviser to discuss tariff reform, it would be suspicious, to say the least, if Power Africa took credit for the whole project.
Congressional buy-in is also essential if the effort is to last beyond the present administration. Yet the White House has not done a good job of securing Congress’ support for Power Africa. Fortunately, there is broad bipartisan interest in African energy poverty. The House of Representatives has already passed the Electrify Africa Act, while the Senate is working on a counterpart bill. The key now is joining these pieces together in a way that can live beyond 2016.
A final problem is the unavoidable tension with global environmental goals. Power Africa's new targets for generation and access cannot possibly be achieved through solar and wind power alone. In fact, each of the six focus countries has announced its intention to use domestic natural gas to generate electricity. U.S. environmental groups have been lobbying the Obama administration to ban financing for any such fossil fuel projects. Yet doing so would not only threaten the Power Africa targets but set up the United States for charges of gross hypocrisy. The United States has more than 3,000 power plants running on fossil fuels, whereas Ghana has two and Liberia has none.
Obama was so pleased with the U.S.-Africa Leaders Summit that he has announced it will become a recurring event. But that would be senseless unless the major commitment at the first summit is actually delivered. Power Africa can provide a strong foundation for future U.S.-African relations, but only if the White House can follow through on its ambitious promises.