The United States is developing mechanisms in the form of ‘Public Private Partnerships (PPP)’ for infrastructure development as alternatives to Chinese loans for African nations, an American official said Monday.
The United States Secretary of State, Rex Tillerson, disclosed this when speaking at a press conference after a closed-door meeting with President Muhammadu Buhari in his office at the Presidential Villa, Abuja.
When responding a question on alternatives to Chinese loans, he said if the Nigerian government could create the right conditions around infrastructural investments, it could access loans from the U.S.
“There are also great potentials for public-private sector co-investing in infrastructure and we are developing mechanisms and the President (Donald Trump) has charged some of his executive staff back home to begin to develop alternative financing mechanisms that will also create alternative opportunities to what China is offering,” he said.
Mr. Tillerson said the U.S. government does not seek to stop funds flowing into countries that need investments but to encourage countries borrowing to be cautious.
“I think it is important to clarify that we do not seek to stop Chinese investments from flowing to countries that need those investments but what we are cautioning countries to do is to look carefully at the implications of the level of debts, the terms of the debts, and whether the arrangements around the local financing are in fact creating local jobs and local capacity or are the projects being carried out by foreign labour being brought to your country?
“Is the structure of the financing such that you will always be in control of your infrastructure? Are there mechanism to deal with the faults so that you do not lose ownership of your own assets? These are national assets whether there are ports, railways, or major highways.
“We have seen this occur in other countries that were not so careful and as a result they got themselves in a situation where they awfully lost control of their infrastructure, lost the ownership and the operation of it.
“And that is the precaution that we talking about. That there are international rules and norms and financial structure to deal with unforeseen circumstances and I think we are just cautioning countries to look carefully.”
The secretary of state, before embarking on the African tour had earlier warned African countries to be wary of the Chinese government and its loan facilities. China has since replied the U.S., saying it hopes other countries can emulate China’s role in helping Africa develop.
The Americans and Chinese have over the years, been intense rivals in the unending search for durable investments in the business terrain of the African continent.