Yellen says Africa to shape world economy as US reengages

PRETORIA, South Africa (AP) – US Treasury Secretary Janet Yellen watched Ford cars and pickup trucks being assembled at a South African factory on Thursday, cited as an example of cooperation between Washington and Africa as it kicks off a major push by the Biden administration to reconnect with a continent that 1.3 billion people and an abundance of economic potential.

“The strategy of the United States towards Africa is centered on the 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 successful Africa is in the interest of the United States. A prosperous Africa means a large market for our goods and services. It means more investment opportunities for our businesses like this Ford plant, which could create jobs in Africa and customers for American businesses.”

Yellen, 76, smiling widely, got behind the wheel of one of the gleaming new vehicles at one point and gripped the steering wheel with both hands.

Yellen is nearing the end of a three-country tour of Africa that began in Senegal on the west coast of the continent and also adopted in Zambia. Her visit marked the beginning of the Biden administration’s efforts to rebuild ties with Africa given China’s rapidly expanding economic presence on the world’s second largest continent, and Russia’s military and diplomatic clout in parts of it.

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South Africa, Africa’s most developed economy and crucial to the US plan, has deep ties to Russia and China, and raised concerns in the White House when it announced last week that it would host Russian and Chinese warships next month. and participate in joint naval exercises with them off the east coast. Russian Foreign Minister Sergey Lavrov paid an official visit to South Africa on Monday, a day before Yellen stepped down.

Yellen avoided commenting on the naval drills during her trip, or South Africa’s neutral stance on the war in Ukraine and a decision not to side with the West in criticizing Russia. She said the Russian invasion is to blame for increasing some of Africa’s problems.

“Russia’s brutal war against Ukraine has driven up energy prices and worsened food insecurity,” she said.

Africa is the single largest trading area in the world by number of countries. It has a young population, a growing middle class and is expected to make up a quarter of the world’s population by 2050.

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She also has a host of problems, one of which Yellen addressed earlier Thursday during her morning talks with South African Finance Minister Enoch Godongwana. The talks, Yellen said, dealt in part 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 were unable to meet the needs of the country. There is currently an electricity crisis in South Africa, with scheduled rolling blackouts hitting businesses and households and its 60 million people for up to 10 hours a day due to diesel shortages and breakdowns at the state-owned electricity supplier’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 United States and other Western nations have committed to help, pledging $8.5 billion in loans to finance South Africa’s energy transition.

“South Africa is the first country with a just energy transition partnership that the United States was proud to commit to as a partner,” Yellen said. “This partnership represents South Africa’s first bold step towards increasing access and reliability of electricity and creating a low-carbon and climate-proof economy.”

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Yellen’s mission to promote American investment and ties comes in the face of China overtaking the US in foreign direct investment in Africa. Trade between Africa and China will increase to $254 billion in 2021, up about 35%.

Yellen’s trip marked the beginning of US efforts to recover lost ground, and the US ambassador to the United NationsLinda Thomas-Greenfield, is also touring Africa, and President Joe Biden has said he intends to visit this year, as has Vice President Kamala Harris.

The Biden administration’s plans were largely laid out at the US-Africa Leaders’ Summit in Washington in December, when US Deputy Secretary of Commerce Don Graves said, “We took our eye off the ball so to speak (in Africa), and US investors and companies need to catch up.”

Ahead of his meeting with Yellen on Thursday, Godongwana said the United States remains among South Africa’s best trading partners.

“My hope is that this will continue,” he said.


Gerald Imray reported from Cape Town.


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