Yellen says Africa to shape world economy as US reengages
"A thriving Africa means a large market for our goods and services," U.S. Treasury Secretary Janet Yellen says
PRETORIA, South Africa (AP) — U.S. Treasury Secretary Janet Yellen watched Ford cars and pickup trucks being assembled at a plant in South Africa on Thursday, citing it as an example of cooperation between Washington and Africa as she begins the Biden administration’s big push to reengage with a continent that has 1.3 billion people and an abundance of economic potential.
“The United States’ strategy towards Africa is centered around a simple recognition that Africa will shape the future of the global economy,” Yellen said at the Ford plant in the suburb of Silverton in the South African capital, Pretoria.
“We know that a thriving Africa is in the interest of the United States. A thriving Africa means a large market for our goods and services. It means more investment opportunities for our businesses like this Ford plant, which can create jobs in Africa and customers for American businesses.”
The 76-year-old Yellen, smiling widely, got behind the wheel of one of the shining new vehicles at one point, and gripped the steering wheel firmly with both hands.
Yellen is nearing the end of a three-country tour of Africa that began in Senegal on the continent’s west coast and also took in Zambia. Her visit is the start of the Biden administration’s efforts to rebuild ties with Africa in the light of China’s rapidly increasing economic presence on the world’s second-largest continent, and Russia’s military and diplomatic foothold in parts of it.
South Africa, Africa’s most developed economy and pivotal to the U.S. plan, has deep ties with both Russia and China, and raised concern at the White House when it announced last week it would host Russian and Chinese warships next month and take part in joint naval drills with them off its east coast. Russian Foreign Minister Sergey Lavrov made an official visit to South Africa on Monday, a day before Yellen touched down.
Yellen has avoided mentioning the naval drills during her trip, or South Africa’s neutral stance over the war in Ukraine and decision not to side with the West in condemning Russia. She did say Russia’s invasion is to blame for increasing some of Africa’s problems.
“Russia’s brutal war against Ukraine has raised energy prices and exacerbated food insecurity,” she said.
Africa is the world’s largest single trade area by number of countries. It has a young population, a burgeoning middle class and is expected to be home to one quarter of the world’s population by 2050.
It also has a myriad of problems, and Yellen focused on one of them earlier Thursday when she held morning talks with South African Finance Minister Enoch Godongwana. The talks partly dealt, Yellen said, with transitioning South Africa from its heavy reliance on coal to greener energy sources.
South Africa relies on coal-fired plants to generate about 80% of its electricity. As well as being a huge polluter, the coal plants have proved unable to meet the country’s needs. South Africa is currently embroiled in an electricity crisis, with scheduled rolling blackouts hitting businesses and households and its 60 million people for up to 10 hours a day because of diesel shortages and breakdowns at the state-owned electricity provider’s aging coal plants.
South Africa plans to reduce its reliance on coal to 59% of its electricity production by 2030 and is targeting zero carbon emissions by 2050. The U.S. and other Western nations have committed to help, pledging $8.5 billion in loans to fund South Africa’s energy transition.
“South Africa is the first country with a just energy transition partnership to which the United States was proud to commit as a partner,” Yellen said. “This partnership represents South Africa’s bold first step towards expanding electricity access and reliability and creating a low-carbon and climate-resistant economy.”
Yellen’s mission to promote American investment and ties comes in the face of China overtaking the U.S. in foreign direct investment in Africa. Trade between Africa and China surged to $254 billion in 2021, up about 35%.
Yellen’s trip kicked off U.S. efforts to recover lost ground, while the U.S. ambassador to the United Nations, Linda Thomas-Greenfield, is also on a tour to Africa, and President Joe Biden has said he intends to visit this year, as does Vice President Kamala Harris.
The Biden administration’s plans were largely laid out at the U.S.-Africa Leaders Summit in Washington in December, when U.S. Deputy Commerce Secretary Don Graves said, “We took our eye off the ball so to speak (in Africa), and U.S. investors and companies are having to play catch-up.”
Before his meeting with Yellen on Thursday, Godongwana said that the U.S. still ranks among South Africa’s top trading partners.
“My hope is that this may continue,” he said.
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