The European Commission President Ursula von der Leyen has announced the launch of a new investment package worth €150 billion ($169.67bn) for Africa, in a bid to create an alternative to Chinese loans and investments that the continent has relied on for some time now.
Leyen at the news conference in Dakar with Senegalese President Macky Sall shared that the investment is half of the EU’s €300 billion Global Gateway scheme, which was launched in December last year. The funds would be disbursed over the next 7 years to finance internet infrastructures like submarine and terrestrial fibre optics cables, cloud and data infrastructures, renewable energy, biodiversity, agriculture and food production, a green hydrogen sector and the Africa-EU Green Energy Initiative to integrate regional energy markets.
The global gateway initiative includes €2.4 billion ($2.7bn) in grants for sub-Saharan Africa and €1.08bn ($1.2bn) for North Africa to support the rollout of renewable energy, energy efficiency and the greening of local value chains.
Meanwhile, the investment initiative is a welcome plan for Africa as needs as well as debt servicing continues to swallow a chunk of the income. The African Development Bank estimates the continent’s infrastructure needs at $130–170 billion a year, with a financing gap of $68–$108 billion. However, African Economy experts are sceptical about the investments, with some opining that the EU might have some unclear terms that have and might not be shared until a later time.
“China’s financing is through loans but at least it’s on the table,” Faten Aggad of Algeria, a former advisor to the African Union’s high representative on Africa-EU negotiations said.
“As things are, China will certainly remain a much more attractive partner. The EU will need to up its offer if it’s to be truly relevant,” she added.
Another of Aggad’s key criticisms is that the EU did not consult African partners ahead of its launch – an argument echoed by other analysts.