Yellen Held Talks on U.S. Investments, China Debt During Visits to Senegal, Zambia
- January 23, 2023
- Posted by: Quatro Strategies
- Category: Politics
During the first stop in her Africa trip, U.S. Treasury Secretary Yellen on Saturday attended the opening ceremony of a rural electrification project in Senegal that is aimed to deliver reliable power to 350,000 people, while supporting some 500 jobs in 14 U.S. states. After that, she traveled to Zambia to promote U.S. ties and investments in the country, while discussing the country’s heavy debt burden.
In Senegal, Yellen attended the opening ceremony of a electrification project led by Illinois-based engineering firm WEldy Lamont. The project had received technical assistance from the U.S. Power Africa initiative, capacity building through the U.S. Agency for Trade and Development, and a $102.5 million loan guarantee from the Export-Import Bank, Yellen said.
“Our goal is to further deepen our economic relationship and to invest in expanding energy access in a way that uses renewable resources spread across the continent,” she added.
While Senegal has one of the highest rates of access for electricity across Sub-Saharan Africa, at around 70%-80%, access is still limited for in rural areas. Yellen underlined that such disparities could hamper development opportunities in areas otherwise ripe for economic development. The project includes an important renewable energy element with a solar grid to power 70 villages.
“This groundbreaking will create a higher quality of life in many communities, and it will help Senegal’s economy grow and prosper. It will also help Senegal get one step closer to its goal of universal electricity access by 2025,” she said.
Yellen also pointed out that such projects would help Senegal to rely on cost effective domestic sources of energy rather than imports that are prone to volatility.
She said the U.S. Power Africa project has helped connect 165 million people to reliable electricity across Africa. Its goal is to add at least 30,000 MW of cleaner and more reliable electricity generation capacity and 60 million new home and business connections by 2030.
After Senegal, Yellen arrived in Zambia, which has been experiencing a heavy debt burden. Zambia became Africa’s first pandemic-era sovereign to default when it failed to make a $42.5 million bond payment in November 2020. Negotiations over how to deal with the debt load have been ongoing.
Zambia’s debt negotiations with China is seen as a test case for how lenient China will be with other troubled nations that experience debt distress.
Yellen will meet with Zambia’s president and finance minister to discuss the country’s debt, and push for the Chinese to continue negotiations. She is also set to visit pharmaceutical manufacturing facilities benefiting from American investment to showcase what she sees as a model of success.
“Many African countries are now plagued by piling, unsustainable debt. And that’s undeniably a problem. And much of it is related to Chinese investments in Africa,” Yellen said Saturday in an interview.
Still, Yellen insists her trip is not about competition with China.
“We want to deepen our engagement,” she said “We see a rapidly growing young population that needs opportunities and economic growth.”
“We have many government programs and international programs that are oriented to help efforts to build infrastructure,” she said. “And when we do that, we want to make sure that we don’t create the same problems that Chinese investment has sometimes created here.”
Yellen further stated that the U.S. wants to invest in companies that “have transparency, that we have projects that really bring broad-based benefits to the African people and don’t leave a legacy of unsustainable debt.”
Experts say a prolonged debt crisis could permanently prevent countries like Zambia from recovering, lead to an entire nation sliding deep into poverty and unemplyment, and exclude it from credit to rebuild in the future.