U.S. plans $250 mln for African investment funds
Tuesday, November 20, 2007
The United States pledged on Monday to provide up to $250 million to jump-start three new African investment funds aimed at developing the continent’s capital markets so African businesses can more easily raise money.
The announcement came on the final day of a five-day African visit by Treasury Secretary Henry Paulson, who said Africa needs all the investment it can get from anywhere in the world.
Paulson singled out Ghana as a country deserving of investment, and said that given Africa’s vast infrastructure needs, it didn’t disturb him whether the investment flows came from the United States, Europe, China or other sources.
“I am not concerned about any country trying to get ahead of the United States in terms of making investments,” Paulson told a news conference in Accra. “The more investment, the better it will be for this region.”
Other countries, including China and India, are showing strong interest in Africa’s oil and other resources. Paulson denied Washington was concerned about China’s influence or was trying to counter it.
Ghanian finance minister, Kwadwo Baah-Wiredu, who attended the news conference with Paulson, said that “investment, no matter where it was coming from, is very good as long as we maintain a good macroeconomic environment.”
DOLLAR, ECONOMIC STRENGTH
Paulson visited the Akosombo dam hydroelectric project outside Accra where he later volunteered once again that the United States backs a strong dollar. Paulson said U.S. long-term economic strength eventually will show through in currency markets, implying that he expects the dollar to recover from its recent record lows.
“A strong dollar is in our nation’s interest and our economy, like any other, has its ups and downs. But I believe our economy will continue to grow and our long-term economic strength will be reflected in currency markets,” he said.
Paulson, a 30-year veteran of Wall Street before taking over the Treasury portfolio, is an ardent advocate of the need to develop capital markets.
He said on the start of his trip that he wanted to see Africa treated as a potentially attractive emerging market rather than a region reliant on aid to counter its widespread poverty.
On Monday, after his appearance with Ghana’s finance minister, Paulson said, “It’s gratifying to see African leaders taking their own future in hand and moving beyond reliance on donors.”
The new Africa Catalyst Fund and Millennium Global Africa Opportunities Fund will each get $100 million from OPIC, while a third fund, to be called the Atlantic Coast Regional Fund, will get $50 million. There are two more funds under consideration for financing, OPIC said.
The Africa Catalyst Fund and Millennium Global would invest in both private and exchange-traded debt and equity securities but would focus on different countries. Any profits they earn will be used to repay OPIC and to reward shareholders.
The Africa Catalyst Fund will emphasize investment in Nigeria, South Africa, Zambia, Ghana, Egypt, Kenya and Angola. Millennium Global would focus on Cameroon, Gabon, Ivory Coast, Liberia, Nigeria, Madagascar, Angola, Kenya, Zambia and Congo.
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