Africa may get R1.1 trillion boost

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ZumaPressClub1 Reuters. South African President Jacob Zuma speaks at the National Press Club during the US-Africa Leaders Summit in Washington August 4, 2014.

Johannesburg - South Africa sees the creation of a $100 billion (R1.1 trillion) fund to finance infrastructure projects on the continent as one of the key outcomes from the US-Africa Leaders Summit this week.

About 40 African leaders meeting with US President Barack Obama in Washington over the next two days will discuss the possibility of setting up the fund, South African Transport Minister Dipuo Peters said in an interview in Washington yesterday.

An announcement may come from Obama or Vice President Joe Biden, she said.

The US-Africa Infrastructure Development Fund will seek to have equal contributions from the US and Africa, South African International Relations and Cooperation Minister Maite Nkoana-Mashabane said on August 1.

The financing will go toward supporting “regional integration and Africa’s industrialisation,” she said.

“There’ll always be a need for infrastructure funding,” Peters said.

“The terms and conditions still need to be worked out and that will determine South Africa’s response.”

African nations have a funding shortfall of $50 billion a year to ease energy shortages and transportation bottlenecks, according to the World Bank.

Last month, the so-called Brics group of nations, which includes Brazil, Russia, India, China and South Africa, agreed to create a $50 billion development bank to fund projects and serve as an alternative source of finance from the World Bank.

 

Business Deals

 

US officials haven’t disclosed any plans for an infrastructure fund yet.

The Obama administration has said it expects more than $900 million in deals to be signed at this week’s summit, with an emphasis on development driven by private business.

South Africa is also lobbying for an extension of the African Growth and Opportunity Act (Agoa), a preferential trade pact between the US and Africa, for 15 years and to remain a beneficiary.

South African exports to the US have more than doubled since 2000, when Agoa was implemented.

US poultry groups want South Africa to be exempted from the preferential trade program because the government restricts some American imports by using anti-dumping duties. - Bloomberg News



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