TRALAC - Trade Law Centre

Requests for funds to dominate Obama’s visit to Africa

Monday, 27 May 2013 Published: | STEVE MBOGO

Source: Business Day (South Africa)

US President Barack Obama's visit to Africa will be dominated by discussions on additional funding being sought from the Millennium Challenge Account (MCA) by Senegal and Tanzania, which he will visit next month along with South Africa.

Mr Obama will be in Africa from June 26 to July 3, his longest official visit to Africa.

Tanzania has exhausted the $698.1m it received in the first round of MCA loans and will seek to qualify for a second round of funding, an official said on the sidelines of the African Union summit in Ethiopia on Sunday. Talks would also cover investment in energy generation and distribution projects.

Senegal will petition Mr Obama to speed up the release of MCA funds in order to strengthen governance structures and improve its enterprise sector "to improve the quality of its exports", Good Governance Minister Abdoul Coulibaly said at the summit on Sunday.

"We are not benefiting from Agoa (the African Growth and Opportunity Act) as we should have liked because the capacity of our enterprise sector is so low that it cannot produce products of high standards as required by the American market," Mr Coulibaly said.

Agoa is a US trade initiative that offers duty-free access to selected goods from 41 countries.

The MCA approved $540m in September 2009 for Senegal to improve agricultural productivity through investments in the rehabilitation of major national roads, setting up irrigation projects and improving water resource management. So far, about $300m of the money has been released to Senegal. While the bulk will go on infrastructure development, Mr Coulibaly said enterprise support would get a "substantial amount".

"We have formed a special government agency whose responsibility is to find ways of improving the capacity of local enterprises. The intention is that those enterprises produce products of the standards required in the American market to benefit from Agoa," he said.

African Union Commission deputy chairman Erastus Mwencha said he expected that issues which define US relations with Africa, such as democracy and Agoa, would feature prominently during Mr Obama’s visit.

Tanzanian President Jakaya Kikwete declined to comment.

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