(Ecofin Agency) - Amid its tensions with China, the USA is changing the strategy of its Overseas Private Investment Corporation (OPIC). In that framework, more funds will be provided to the corporation and a new strategy created.
However, it will be difficult to compete with China’s financings in Africa. Indeed, according to data compiled from the corporation's website, it appears that the total value of the US active commitments in Africa since 2005 is $6.47 billion.
There is however an increased interest in the region. This year, three major commitments amounting to $100 million have been taken. At end 2018, the total volume of the OPIC’s commitments in Africa was $840.6 million. It is up by 42% year on year and, it is also better than the 50.7% decrease recorded in 2016 and a measly 1.9% surge in 2017.
The institution has elaborated a new strategy named Connect Africa, for the Sub Saharan region notably. In 2017, the sub-region represented 27% of its commitments.
The OPIC plans to invest an additional $1.2 billion in the region within three years. “OPIC will invest $1 billion over three years to projects supporting telecommunications and internet access, value chains that connect producers of raw materials to end users, and essential infrastructure, such as roads, railways, ports, and airports. These commitments to connectivity will support economic growth and shore up regional security,” the institution indicated on its website.
This is a strong commitment but, it may not be enough for the continent whose needs are huge. In the infrastructure sector, for instance, it needs between $130 billion and $170 billion yearly for the six coming years, according to recent estimates published by the AfDB.