U.S. Engagement with Africa

Assistant Secretary Tibor Nagy

Baker Institute for Public Policy at Rice University

04/17/2019 11:01 AM EDT

Remarks
Tibor P. Nagy, Jr.
Assistant Secretary, Bureau of African Affairs
Rice University, Houston, TX

April 10, 2019

Good afternoon. Thank you Michael, Melissa, and all of you here today for that warm welcome.
It’s wonderful to be back in Texas, where I call home. I’m sure you already knew that, as nothing screams Texas more than a name like Tibor Nagy.

Actually, I came to the United States as a refugee from Hungary, and it was here in Texas that I lived and studied before going on to become a diplomat and representing our great country.

It is always a pleasure to visit institutions such as Rice University, and to talk about what we are doing in Africa with our country’s future leaders. That is especially true here at the Baker Institute where many of you have a strong interest in our economic engagement with Africa, and perhaps may be considering some future work on the continent. It’s certainly an exciting time right now for Africa, and today I would like to share with you what we at the State Department are doing in this realm, particularly concerning energy.

A little background on myself. It was in Africa that I spent the vast majority of my 32-year diplomatic career, with postings in seven different countries, and it was there I fell in love with a continent and a people. I’ve visited the continent three times since I took my current position last September, and engaged with government officials, business leaders, civil society and average citizens in many countries.

But, it is also important that I travel around the United States to visit and talk with people like you.
And when I do, people are curious. They want to know – what is it that we are doing in Africa? How are our tax dollars being put to use in our engagement on the continent? How are we supporting U.S. companies to create partnerships and invest in Africa?

Let me begin by saying things have changed dramatically in Africa from when I became a diplomat in 1978. When I first set foot on the continent, there were no cellphones, no internet, few television stations, and to call back to America required reserving one of the few international lines days ahead.
Now, through modern technology, even people in remote villages know how much cassava, potatoes or goats will sell for in urban markets, thus insuring that they get better prices for their goods. And in places such as Kenya and South Africa, people do all of their banking with their mobile phones. In fact, things are moving so fast that today six of the ten fastest growing economies in the world are in Africa!

Africa is the continent of the future and its potential is limitless. By 2050, its population will more than double to 2.2 billion people, with over 60 percent under the age of 25. This will have enormous ramifications not only for Africa, but also for the world at large. It will be private investment and not foreign assistance that will create jobs and opportunities for Africa’s youth. If African countries don’t create jobs and opportunities for their young people, the alternatives will be dangerous migration to Europe or the Gulf States, joining violent extremist groups, crime, or despair. Young people everywhere have the same aspirations for a better life. And as always, the United States will be there with our African partners as they face this future.

In fact, the Trump Administration announced in December a new Africa Strategy to re-calibrate our engagement with the continent. The core of this strategy is to promote trade and commercial ties to increase prosperity in the United States and in African countries; strengthen efforts to advance peace and security; and support stability, democracy, good governance and self-reliance. It builds on our strong relationships with individual countries, effective regional organizations, and most importantly, the people of Africa. It also underscores our long-standing commitment to the continent and our helping countries move from reliance on foreign assistance toward sustainable financial independence.

With this in mind, I will highlight four key U.S. policy priorities in Africa and how they align with the President’s strategy.

First, our interest lies in promoting stronger trade and business ties between Africa and the United States. American companies are eager to invest in Africa. To attract more U.S. business, however, African governments need to increase transparency and fairness and create a level playing field in their commercial environments.

Second, we must harness the potential of Africa’s tremendous youth population to drive Africa’s economic growth and create real prosperity. I tell everyone I talk to that engaging Africa’s youth is the key to unlocking sustained prosperity on the continent.

Third, it is critical that we continue to advance peace and security across the continent. We do this by strengthening our defense and development partnerships with African governments as well as through regional mechanisms. Africa cannot grow and prosper if it lives in fear of instability and terrorism.

Fourth, we must set the record straight and continually reinforce America’s longstanding, steadfast commitment to Africa. Our relationship has evolved over decades to one of cooperation, mutual respect, and transparency. We have invested heavily in health, education, civil society and providing job skills, especially for women. And we are actively promoting this commitment on the ground.

One of the sectors where we have seen the most success in Africa is with energy. The U.S. government recognizes the importance of energy to international economic development, peace, and security. In fact, the President’s National Security Strategy focuses on three global areas: export promotion, energy security, and energy access.

Across Africa, the United States seeks to broaden the economic and social benefits of free, fair, and transparent energy markets. Free markets drive economic growth, and diversity in energy sources and routes often protects countries from unexpected changes, be they market-driven or politically motivated. African countries compete in a global market. This requires undertaking market-driven reforms, and eliminating obstacles that limit trade in electricity, oil, gas and other resources.

In Liberia, we supported the development of petroleum sector reform legislation, which contributed to the government’s preparations to establish an independent petroleum regulator.

In December, Houston-based Kosmos Energy signed a Final Investment Decision with British Petroleum and the governments of Senegal and Mauritania to develop a natural gas field straddling the maritime border of the two countries. Encouraging local content in Senegal and increasing commercial interest in Mauritania are both challenges and opportunities for American businesses, and we are working to identify and promote those opportunities.

Furthermore, 600 million people in Africa lack electricity. Expanding access is both a challenge and an opportunity, as electricity access is foundational for economic growth. We are committed to helping increase access through Power Africa, a whole-of-U.S.-government initiative that is one of the largest public-private partnerships for development in history.

The “Power Africa 2.0” strategy increases the program’s focus on creating a strong enabling environment and the U.S. private sector’s competitiveness. With liberalized markets and open competition, African countries can develop energy resources in a way that maximizes their long-term value for their people. This is good for African countries and good for U.S. energy companies looking for investment opportunities. Power Africa ensures that the most cost-effective and efficient projects go through, regardless of resource.

For example, in Nigeria, Power Africa has supported the government in implementing gas sector reforms to commercialize stranded natural gas resources, unlock additional resources, and provide a steady supply of gas for power generation. And U.S companies are actively engaging across the board.

In Mozambique, Exxon and Anadarko are working towards final investment decisions on Liquefied Natural Gas projects that would be transformative for the country’s economy and future. If that enormous offshore gas find is developed properly, it could potentially bring the country from lower-income to middle-income status. We are pleased that two U.S. companies are leading the charge on this investment. We know there are challenges, but I am confident in our teams both in Washington and at our embassy in Maputo who are supporting the process.

Another good example of how we help U.S. companies have the best possible chance of succeeding abroad: In Uganda, a U.S.-led consortium of companies, including GE, signed a contract with the Government of Uganda to develop, construct, and operate a three billion dollar oil refinery. The project is expected to support more than 8,000 U.S. jobs – and the venture is financed on private debt and equity markets, not by saddling Uganda with the bill.

When U.S. companies develop projects, they lay groundwork to set an example of good, transparent business practices as well as investment in local communities. Once we set the standard, others can follow and build on our success. Last October, the President signed the BUILD Act to create the U.S. International Development Finance Corporation and unleash the full potential of private sector-led growth in Africa. This initiative doubles the cap on our current development finance portfolio from 29 to 60 billion dollars.

U.S. companies remain the largest private foreign investor in Africa. U.S. investment increased from 9 to 50 billion dollars a year from 2001 to 2017. And we are only scratching the surface in terms of tapping the available pool of capital from the United States that can flow to Africa.

The bottom line is this: the United States has an unwavering commitment to Africa. Our support will continue across the spectrum, but the ultimate goal of foreign assistance is to see countries reach levels of economic prosperity, democratic governance, and rule of law where assistance is no longer needed. We see the development of robust energy markets and access to as important mechanisms to advance economic prosperity, peace and security, and the goal of reaching self-reliance in Africa. And the United States will continue to support free, fair, and transparent energy markets and will partner with African countries that seek the same.

No other nation matches the breadth and depth of the United States’ engagement on the continent. We go beyond simply investing in Africa, to investing in Africans.

As I said earlier, Africa is the dynamic continent of the future, and the direction it takes will have a major impact – for good or ill – not only in Africa but the rest of the world.

Again, thanks to all of you for your interest in U.S. engagement with Africa.

As an old African proverb says: “There are no shortcuts to the top of the palm tree.” Let us take this proverb to heart and work together to create an Africa of opportunity and prosperity; of hope and commitment; and of peace and stability, with a bright future for all of its people.

Thank you.