[Senate Hearing 114-222]
[From the U.S. Government Publishing Office]


                                                       S. Hrg. 114-222

    THE U.S. AFRICA LEADERS SUMMIT SEVEN MONTHS LATER: PROGRESS AND 
                                SETBACKS

=======================================================================

                                 HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON AFRICA AND
                          GLOBAL HEALTH POLICY

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 19, 2015

                               __________

       Printed for the use of the Committee on Foreign Relations
       
       
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                COMMITTEE ON FOREIGN RELATIONS         

                BOB CORKER, TENNESSEE, Chairman        
JAMES E. RISCH, Idaho                ROBERT MENENDEZ, New Jersey
MARCO RUBIO, Florida                 BARBARA BOXER, California
RON JOHNSON, Wisconsin               BENJAMIN L. CARDIN, Maryland
JEFF FLAKE, Arizona                  JEANNE SHAHEEN, New Hampshire
CORY GARDNER, Colorado               CHRISTOPHER A. COONS, Delaware
DAVID PERDUE, Georgia                TOM UDALL, New Mexico
JOHNNY ISAKSON, Georgia              CHRISTOPHER MURPHY, Connecticut
RAND PAUL, Kentucky                  TIM KAINE, Virginia
JOHN BARRASSO, Wyoming               EDWARD J. MARKEY, Massachusetts
              Lester E. Munson III, Staff Director        
           Jodi B. Herman, Democratic Staff Director        

                         ------------          

                   SUBCOMMITTEE ON AFRICA AND        
                      GLOBAL HEALTH POLICY        

                 JEFF FLAKE, Arizona, Chairman        

JOHNNY ISAKSON, Georgia              EDWARD J. MARKEY, Massachusetts
RAND PAUL, Kentucky                  CHRISTOPHER A. COONS, Delaware
JOHN BARRASSO, Wyoming               TOM UDALL, New Mexico
MARCO RUBIO, Florida                 BENJAMIN L. CARDIN, Maryland

                              (ii)        

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hon. Jeff Flake, U.S. Senator From Arizona.......................     1
Hon. Edward J. Markey, U.S. Senator From Massachusetts...........     2
Ben Leo, Senior Fellow, Director of Rethinking U.S. Development 
  Policy, Center For Global Development, Washington, DC..........     5
    Prepared statement...........................................     7
Del Renigar, Senior Counsel, Global Government Affairs and Policy 
  Middle East, Africa and India, GE Corporation, Washington, DC..    14
    Prepared statement...........................................    16
Susan C. Tuttle, Director, Middle East and Africa Government and 
  Regulatory Affairs, IBM Corporation, Washington, DC............    20
    Prepared statement...........................................    23
Statement of Thomas J. Bollyky, Senior Fellow for Global Health, 
  Economics, and Development, Council on Foreign Relations, 
  Washington, DC.................................................    27
    Prepared statement...........................................    29

                                 (iii)

  

 
    THE U.S.-AFRICA LEADERS SUMMIT SEVEN MONTHS LATER: PROGRESS AND 
                                SETBACKS

                              ----------                              


                        THURSDAY, MARCH 19, 2015

                               U.S. Senate,
   Subcommittee on Africa and Global Health Policy,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:37 a.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Jeff Flake 
(chairman of the subcommittee) presiding.
    Present: Senators Flake, Isakson, Markey, and Coons.

             OPENING STATEMENT OF HON. JEFF FLAKE, 
                   U.S. SENATOR FROM ARIZONA

    Senator Flake. This hearing of the Senate Foreign Relations 
Subcommittee on African Affairs and Global Health Policy will 
come to order.
    I served as ranking member of this subcommittee for the 
past 2 years, but I have long had an interest in African 
affairs and have had the opportunity as we spoke to spend some 
time there, and it is an honor now to serve as chairman of this 
subcommittee, and to be able to examine some of the pressing 
needs on the continent that sometimes receive too little 
attention.
    There seems to be a perpetual focus from the outside on 
foreign assistance to Africa, whether in helping to stop the 
spread of AIDS or Ebola, or providing humanitarian assistance 
to those suffering from drought, or to aid those who have been 
displaced due to a crisis. Much of this assistance is obviously 
critical. However, these countries want to develop their own 
economies and reach a point where they are not so dependent on 
foreign aid.
    Africa is home to 6 of the 10 fastest-growing economies in 
the world. Real incomes across the continent have increased by 
30 percent over the past 10 years. By 2040, Africa is expected 
to have a larger workforce than China.
    In addition, sub-Saharan Africa's consumer base of nearly 1 
billion people is rapidly growing and has the potential to 
create increased demand for U.S. goods, services, and 
technologies.
    U.S. private-sector interest in tapping the economic 
potential of the continent is increasing, though our presence 
lags behind many of our partners and competitors in Europe and 
Asia.
    Now, part of this discrepancy stems from a lack of 
opportunity in promising countries, and part stems from real 
challenges posed by weak governance and poor infrastructure in 
other countries.
    Held last August, the U.S.-Africa Leaders Summit sought to 
highlight some of that promise and to address challenges to 
greater investment on the continent. The summit included the 
U.S.-Africa Business Forum, which brought together business 
leaders and heads of state, and provided a venue for U.S. 
investors to develop new business relationships on the 
continent. For companies with a long-standing presence in 
Africa, the day offered an opportunity to both reinforce 
relationships and discuss solutions to policy challenges.
    Today's hearing will further explore the investment climate 
in Africa 7 months after the conclusion of the summit, and to 
look at policies that have emerged and policies that encourage 
or hinder the kind of growth that can lead to economic security 
on the continent.
    We will hear from witnesses who are at the forefront of 
investing in Africa. We have invited them in order to hear 
firsthand about the potential for growth, as well as about the 
policies and practices, both on our part and on the part of 
Africans, that will create an attractive business climate.
    In gathering ideas on how best to support market potential, 
we will hear from the Center for Global Development and the 
Council on Foreign Relations, two organizations that closely 
analyze economic growth in Africa.
    Each of our witnesses today brings a unique perspective to 
the issue at hand, and I have no doubt they will contribute 
greatly to the debate. I thank you each for your time and for 
sharing your experience. I look forward to your testimony.
    And with that, I will recognize the ranking member, Senator 
Markey, for his comments. I am glad to have Senator Markey on 
this committee. We served together in the House and traveled 
together, and we will work well together, I am sure, here.

              STATEMENT OF HON. EDWARD J. MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. And I know we will, Mr. Chairman. Thank you 
so much for recognizing me, and thank you so much for calling 
this very important hearing.
    When Robert F. Kennedy met antiapartheid activists in South 
Africa in 1966, he famously said, ``It is from numberless 
diverse acts of courage and belief that human history is 
shaped. Each time a man stands up for an ideal or acts to 
improve the lot of others or strikes out against injustice, he 
sends forth a tiny ripple of hope, and crossing each other from 
a million different centers of energy in daring, those ripples 
build a current that can sweep down the mightiest walls of 
oppression and resistance.''
    Inspired by those empowering words, I look forward to 
working with Senator Flake and the other members of this 
committee to add our own ripples of hope to the currents of 
change moving across Africa today.
    In this subcommittee, I think we have several opportunities 
to have our actions ripple across countries an ocean away.
    One, building a clean, affordable energy backbone in 
Africa. Power Africa is a critical part of improving the lives 
of millions of people in Africa and supporting economic 
development across the continent. Power Africa is starting 
strong as a Presidential initiative, and I am hopeful that this 
body can come up with a path forward to pass Energize Africa 
legislation and enshrine in U.S. law the importance of focusing 
on increasing access to electricity in Africa. I know Senator 
Coons has given great leadership on that issue, and I am 
looking forward to working with him and Senator Flake and other 
members of the committee.
    Two, public health improvements. We need to focus on the 
improving health sector capacity across the continent so that 
the incredible gains of PEPFAR and other initiatives can 
continue, so that we can understand how to prevent the 
disastrous spread of diseases as basic as malaria and as 
crippling as Ebola.
    Three, tiger poachers and their operations to protect 
wildlife. In recent years, poaching has taken a devastating 
toll on some of Africa's most iconic and imperiled wildlife. 
There is increasing evidence that some poaching is also helping 
to finance conflicts. It is critical that we do all that we can 
to prevent wildlife trafficking, including by finding those who 
finance it.
    Four, work with African countries to provide for their own 
security and prevent the spread of nuclear bomb material. The 
summit highlighted new programs that seek to build Africa's 
peacekeeping response capacity, strengthen its institutions, 
focus on security, improve early warning systems for conflict. 
These are critical.
    And finally, thanks to the work of the Center for Public 
Integrity and the Washington Post, we now have reason to be 
concerned about South Africa's stockpile of almost 500 pounds 
of highly enriched uranium, combined with concerns about Africa 
as a transit point for enriched uranium. South Africa's 
vulnerable stockpile is something that merits real attention.
    Five, help prepare Africa for climate change. The Africa 
summit reiterated the Obama administration's support for 
increasing resilience among communities in all of the southern 
part of Africa that are already vulnerable to extreme weather. 
Climate change is not just super-charging blizzards in Boston. 
It is impacting floods in Malawi and forest fires in South 
Africa, and even worsening droughts like those in Somalia.
    All of these issues must be discussed because they 
represent some of the central issues facing Africa today, where 
partnership with the American government and companies can 
drive progress.
    Africa is a continent rich in economic and social 
potential. We must prioritize investment in Africa's future or 
our influence will wane in the wake of large commitments from 
Europe and China. And we must also ask how can we address the 
essential challenges that inhibit African nations' growth, 
because when people cannot access enough electricity to power 
homes, how can we expect their full participation in the local 
economy? When families cannot keep their children healthy 
because a constant battle with disease is occurring, how can 
parents put them in school or go to work? When natural 
disasters prevent the building of resilient communities, how 
can countries build resilient economies?
    Today I hope to learn from our witnesses how the policy 
initiatives under the summit are proceeding. I think it is 
essential to know how this body can be helpful in paving the 
way for increased U.S. investment in Africa in a variety of 
arenas.
    I thank you, Mr. Chairman, for calling this very important 
hearing.
    Senator Flake. Thank you, Senator Markey.
    I just wanted to note also how nice it is to have Senator 
Isakson here. He has long had an interest in Africa on a number 
of fronts and has traveled extensively on the continent, and I 
look forward to trying to tap his expertise as we go along 
here.
    We will be joined, I am sure, by Senator Coons and some 
others as we go along.
    Let us turn now to the witnesses.
    Our first witness is Mr. Ben Leo. Mr. Leo is a senior 
fellow at the Center for Global Development and the director of 
the Rethinking U.S. Development Policy initiative. This 
initiative seeks to broaden the U.S. Government's approach to 
development, including the full range of investment, trade, and 
technology policies, while also strengthening existing foreign 
assistance tools. Mr. Leo's research primarily focuses on the 
rapidly changing development finance environment, with 
particular emphasis on private capital flows, infrastructure, 
and debt dynamics. In addition, he is testing a range of new 
technological methods for collecting high-frequency information 
about citizens' development priorities.
    Our second witness will be Del Renigar. Mr. Renigar is GE 
Corporate's senior counsel for Global Government Affairs and 
Policy. He advises all GE businesses on public policy, trade, 
investment, national security, and government relations issues 
in Africa, the Middle East and South Asia. Mr. Renigar also 
serves as the staff representative to the President's Advisory 
Committee on Doing Business in Africa. Before joining GE, Del 
served as the Director of International Economics for the 
Western Hemisphere on the National Security Council, and as the 
Senior Counsel to the General Counsel and Deputy Secretary of 
the U.S. Department of Commerce, where he counseled the Office 
of the Secretary, the Bureau of Industry and Security, and the 
International Trade Administration on trade, foreign policy, 
and national security issues.
    Our third witness will be Susan Tuttle. Ms. Tuttle is 
currently the director of Middle East and Africa for IBM's 
Government and Regulatory Affairs Office, and has geographic 
responsibility for initiatives to support IBM's business and 
expansion efforts across Africa and the Middle East. Over her 
30-year career with IBM, Ms. Tuttle has worked with governments 
all over the world on public policy issues related to 
technology and innovation, with key focus on skills and talent 
development, research, IPR, market access and trade and policy-
related infrastructure. Ms. Tuttle is on the Board of Directors 
and the Executive Committee of the Corporate Council on Africa 
and chairs its ICT Working Group. She is also on the Board of 
Directors for GlobalWIN, the Global Women's Innovation Network.
    Our fourth witness is Tom Bollyky. Mr. Bollyky is senior 
fellow for Global Health, Economics, and Development at the 
Council on Foreign Relations. He is also an adjunct professor 
of law at Georgetown University and a consultant to the Bill 
and Melinda Gates Foundation. Prior to joining CFR, Mr. Bollyky 
was a fellow at the Center for Global Development, and Director 
of Intellectual Property and Pharmaceutical Policy at the 
Office of the U.S. Trade Representative. He was also a 
Fulbright Scholar to South Africa, where he worked as a staff 
attorney at the AIDS Law Project on treatment access issues 
related to HIV/AIDS.
    Thank you all for being here. I think we all recognize what 
expertise you all carry, and it is significant.
    We remind you that your full statements will be included in 
the record. If you could keep your comments to close to 5 
minutes, that would be great so we can allow time for 
questioning from all of our members.
    With that, Mr. Leo.

       STATEMENT OF BEN LEO, SENIOR FELLOW, DIRECTOR OF 
        RETHINKING U.S. DEVELOPMENT POLICY, CENTER FOR 
               GLOBAL DEVELOPMENT, WASHINGTON, DC

    Mr. Leo. Thank you, Chairman Flake, Ranking Member Markey, 
and Senator Isakson.
    This hearing is very well timed following the Leaders 
summit last year and several issues that Congress will be 
considering this year such as AGOA reauthorization and the 
Energize and Electrify Africa Acts.
    My remarks focus on three major U.S. policy gaps and how 
Congress can help to address them. These include passing 
Energize and Electrify Africa legislation; two, modernizing 
U.S. development finance tools; and three, urging the 
administration to negotiate more investment treaties.
    Each of these pose no incremental budgetary cost and 
reflect a simple fact: private investment is key to African 
growth and U.S. policy objectives in this increasingly 
important region.
    African growth has averaged about 5 percent a year since 
2000, exceeding levels in many other regions. FDI has increased 
sixfold, and inflation, which is historically a major problem, 
is dramatically lower than it was in the 1980s and 1990s. The 
region has a promising future despite many challenges, and will 
be home to new emerging major markets such as Nigeria, 
Ethiopia, and Kenya.
    Above all else, Africans increasingly desire an American 
partner that helps to deliver economic opportunities primarily 
through greater trade and investment.
    U.S. Government approaches such as Power Africa are 
starting to reflect these realities, but much more is needed. 
Most U.S. aid programs are simply not designed or equipped to 
address these shifting realities. We need to emphasize new 
tools that promote U.S. investment and leverage America's 
greatest strengths.
    Emerging actors such as China understand these dynamics 
extremely well. The question is whether we are ready and 
willing to compete.
    First, Congress should pass Energize and Electrify Africa 
legislation. Such action would send a very strong signal to 
African leaders, businesses and people that the United States 
is a strategic and long-term partner. Unreliable and costly 
electricity is a major competitiveness and human development 
constraint in nearly every African country. President Obama's 
Power Africa initiative is doing very important work to address 
this. Yet, there is a risk of losing momentum, particularly 
after the current administration leaves office.
    Passing authorizing legislation would make it a durable 
bipartisan effort. This legislation should include clear 
reporting targets, multiyear authorization for OPIC, and an 
exemption from carbon cap rules for the poorest, lowest 
emitting countries.
    Second, Congress should modernize U.S. development finance 
tools by creating a U.S. Development Finance Corporation, or a 
USDFC. America's finance development institution, OPIC, is a 
little-known development agency that provides seed capital and 
risk insurance for U.S. investors entering emerging markets. It 
operates on a self-sustaining basis, and it has provided net 
transfers to the U.S. Treasury for nearly 40 consecutive years. 
Yet, it is underutilized, has not really adapted since the 
1970s, and is hamstrung by outdated or misdirected 
restrictions.
    Beyond OPIC, many other U.S. investment tools are spread 
across numerous agencies, which leads to bureaucratic fights, 
inefficiencies and delays.
    A reformed and enhanced OPIC would form the foundation of 
the USDFC, and it would bring together all the capabilities 
that are scattered across the U.S. Government. Importantly, 
this is about consolidating existing tools, making them better, 
and delivering better results. It is all at no incremental cost 
to U.S. taxpayers.
    It is not about bigger government or corporate welfare. It 
is about making what we have better. This proposal would 
require bold congressional leadership. Yet, by simultaneously 
reforming OPIC and providing it with consolidated authorities, 
the U.S. Government would ensure that its development finance 
tools are fit for today's global needs.
    Third, Congress should urge the Obama administration to 
pursue legally binding bilateral investment treaties, or BITs. 
These treaties encourage investment by providing investors with 
protections against things like expropriation or fickle legal 
systems. However, the United States has only ratified six 
agreements to date with African countries, covering a mere 7 
percent of regional GDP.
    Countries like China and Canada have demonstrated that 
African governments are ready and willing to sign these 
agreements. While Beijing and Ottawa have been busy inking new 
deals, USTR has been pursuing ineffectual, non-legally-binding 
trade and investment framework agreements. It is time to stop 
allocating scarce resources to these talk shops and start 
negotiating real agreements that have impact for U.S. investors 
and on promoting economic growth in the region.
    In conclusion, private investment is key to African growth 
and ensuring that the region's growing youth bulge finds 
meaningful opportunities. It matters for our security, it 
matters for our commercial policy and our foreign policy. If we 
fail to act on this agenda and build real momentum after the 
Leaders summit, then America's influence and relevance will be 
further eroded. There is no question that other actors such as 
China will fill America's leadership void.
    Thank you very much.
    [The prepared statement of Mr. Leo follows:]

                     Prepared Statement of Ben Leo

    Thank you, Chairman Flake, Ranking Member Markey, and other members 
of the subcommittee. I appreciate the opportunity to appear before you 
today to discuss the potential for greater U.S. trade and investment 
with sub-Saharan Africa. This hearing sends an important message about 
Congress' focus on expanding private sector-based development 
approaches in this increasingly strategic region. It is particularly 
well timed following the historic U.S.-Africa Leaders Summit last 
August and several issues that the 114th Congress will be considering 
this year, including the African Growth and Opportunity Act and the 
Energize/Electrify Africa Act.
    Within this broader context, my testimony will briefly highlight 
some of the most obvious gaps in our current approach, along with key 
opportunities and challenges. I also outline three specific policy 
recommendations for your consideration, including:
    (1) Congress should urge the administration to pursue legally 
binding Bilateral Investment Treaties (BITs). Such action will promote 
greater U.S. investment flows to the continent while also positioning 
U.S. investors on equal footing with European, Chinese, and other 
investors who benefit from BIT protections.
    (2) Congress should modernize U.S. development finance tools by 
creating a modern U.S. Development Finance Corporation (USDFC). This 
budget-neutral reform would ensure that U.S. policy tools better 
respond to developing countries' priorities and emphasize private 
sector-based development models. More modest reforms to the Overseas 
Private Investment Corporation would be beneficial even if Congress 
does not move forward with a USDFC.
    (3) Congress should pass Energize/Electrify Africa legislation that 
promotes U.S. investment in the power sector and improves economic 
opportunities along with health and education outcomes. Such action 
would send a strong signal to African leaders, businesses, and people 
that the United States is a strategic and long-term partner.
       the new u.s.-africa narrative--rhetoric and policy reality
    Last August, the U.S. Government turned an important page in its 
relationship with sub-Saharan Africa. President Obama and his 
administration declared that they were listening to the priorities of 
African governments, businesses, and people. The official U.S.-Africa 
Leaders Summit agenda naturally covered a broad spectrum of issues. 
However, the central narrative was delivered with succinct clarity. 
America finally has awoken to the growing economic opportunity and 
importance of sub-Saharan Africa. While the main summit takeaways were 
largely rhetorical, this shift in mindset should not be underestimated.
    Overall, Africa projects a promising future despite global and 
localized headwinds. Regional GDP growth has averaged 5 percent 
annually since 2000, exceeding levels in Latin America, Central Asia, 
and the Middle East. Foreign direct investment has increased nearly 
sixfold, and is now rapidly expanding into consumer and service 
sectors. Macroeconomic management, such as controlling inflation, has 
vastly improved compared to the 1980s and the 1990s. Even with falling 
commodity prices, growth is projected to remain strong over the near- 
and medium-term.
    Above all else, most Africans desire an American partner that is 
focused on helping to deliver economic opportunities, primarily through 
greater trade and private investment flows. Roughly 70 percent of 
surveyed Africans cite economic issues--such as jobs and 
infrastructure--as their most pressing priorities.\1\ These priorities 
transcend geographic, gender, and age divides. These views, expressed 
by ordinary Africans given a voice through representative surveys, 
contrast sharply with how most Americans view the continent. After 
decades of depressing media coverage, we might expect Africans to 
overwhelmingly prioritize humanitarian needs, such as basic health 
care, education, and food security. That is not the picture emerging 
from much of Africa. The U.S.-Africa Leaders Summit made it clear that 
the U.S. Government has begun to internalize these shifting dynamics.


    Despite immense opportunities, many African economies remain 
constrained by poor business climates, small market size, and collusive 
political economy dynamics. Among the greatest barriers to growth are 
unreliable and costly electricity; high transport costs; inadequate 
access to finance; and burdensome regulations and corruption. The 
responsibility for confronting these challenges rests squarely with 
African governments, and their citizens who must hold them accountable. 
Yet, the U.S. Government can play a strategic supporting role in 
helping to address them.
    While the Leaders summit suggests that U.S. officials have started 
to internalize the Africa Rising reality, even amidst regional threats 
and challenges, actual Obama administration policy and ongoing 
messaging has been much slower to adapt. Judged solely by White House 
and State Department press statements and social media feeds, casual 
observers might believe that America's top continent-wide priorities 
are combatting wildlife trafficking and LGBT discrimination. The 
question is not whether these kinds of issues should be raised and 
discussed with America's partners in the region. Instead, the question 
is whether they should dominate the post-summit rhetoric emanating from 
Washington and its senior government officials, when these issues do 
not appear anywhere near the top of African nations' priorities, 
whether Americans like it or not. Particularly in light of the proposed 
new framework for U.S.-Africa relations, which revolves around a 
private sector-based partnership that is supported and enabled by 
respective governments.
    Going forward, Congress should push the Obama administration to 
deepen and accelerate its emerging U.S.-Africa narrative through 
several strategic steps. This includes: (1) pressuring the 
administration to launch an ambitious round of BIT negotiations with 
African nations; (2) overhauling U.S. development finance tools; and 
(3) passing landmark legislation focused on African energy poverty 
issues. Africa has always been a region that attracts broad bipartisan 
support. There is both an opportunity, and an urgent need, to advance 
this agenda. If we fail to act and continue to build real momentum 
after the Leaders summit, then America's influence and relevance will 
be eroded in an increasingly multipolar world. There is no question 
that other actors, such as China and other emerging nations, will fill 
America's leadership void, and capitalize on their closer alignment 
with the continent's agenda.
        recommendation 1: utilize bilateral investment treaties 
                       as a low-cost policy tool
    Bilateral investment treaties have long been low-cost policy tools 
for promoting investment, both among developed and developing 
countries. From a development and commercial policy perspective, BITs 
can encourage investment by providing foreign investors with core 
protections against political risk and uncertain business environments, 
such as expropriation, discriminatory treatment, or weak and partial 
legal systems. According to UNCTAD, there are now over 3,200 investment 
agreements globally, including almost 300 involving African nations. In 
addition, many African governments are negotiating BITs with their 
neighbors, such as Mauritius, which has signed or ratified agreements 
with 17 African countries since 2000.
    Many econometric studies find that BITs have a positive and 
significant impact on promoting foreign direct investment (FDI) flows 
to developing countries.\2\ While BITs clearly are not a silver bullet, 
the potential return on U.S. Government action is very high. This is 
due to their low-cost nature, which only includes salaries and travel 
budgets for U.S. Government negotiators. BITs pose no costs to U.S. 
taxpayers beyond these modest expenses.
    Despite these benefits, the United States is lagging far behind 
European, Asian, and other emerging market players when it comes to 
negotiating BITs with African countries. Currently, the United States 
has only six agreements in place, which include: Cameroon (1989), the 
Democratic Republic of Congo (1989), Republic of Congo (1994), 
Mozambique (2005), Rwanda (2012), and Senegal (1990). Collectively, 
these treaties cover a mere 7 percent of regional GDP. Even if the 
United States completed hoped for agreements with Mauritius and the 
East African Community, which have been under consideration for several 
years, regional coverage rates would remain extremely low at roughly 15 
percent. To date, the Obama administration has not signed a single 
investment agreement anywhere in the world.
    Other capital-exporting countries, such as China and Canada, 
demonstrate that African governments are ready and willing to sign 
investment promotion agreements. China has signed investment treaties 
with 24 African countries, including 15 out of the largest 20 regional 
economies. Once all of these agreements are ratified, China will have 
legally binding agreements covering almost 80 percent of regional GDP. 
In addition, Canada has signed BITs with eight African countries in the 
last few years. This includes the region's economic powerhouse, 
Nigeria, whose roughly $600 billion economy is larger than Malaysia and 
Vietnam combined.\3\ In addition, Canada has several more negotiations 
underway, such as with Ghana and Kenya. Canada's rapid progress has 
been driven by Prime Minister Harper's strong commitment to advance 
BITs as a core commercial and development policy tool. If the Obama 
administration demonstrated a similar level of political support and 
ambition, whether on its own or pushed by Congress, the United States 
could achieve similar progress.
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    The U.S. Government should address the new Model BIT's complexity, 
which could limit our ability to conclude negotiations with many 
African countries. In 2012, the United States unveiled a new template 
agreement, which sought to address past concerns raised by labor 
unions, environmental groups, other NGOs, as well as some developing 
countries that wish to retain more public policy sovereignty and 
flexibility. As a result, the 42-page template now affords more 
government discretion than in the past, which is one reason it is so 
complex. For example, it exempts government actions (except ``in rare 
circumstances'') to protect health, labor, and consumer safety from 
investors' protections against expropriation. These modifications have 
broadened U.S. political support for this policy tool. Yet, the U.S. 
Government will need to consider ways of addressing the practical 
challenges posed by an increasingly complex template agreement. There 
are two concrete options for doing so. First, USAID could provide 
targeted bilateral technical assistance for countries engaging in BIT 
negotiations, as it did with the U.S.-Central American Free Trade 
Agreement (U.S.-CAFTA). Second, the U.S. Government could provide 
modest financial contributions to multilateral facilities, such as the 
Africa Legal Support Facility, which is housed at the African 
Development Bank.
    Going forward, Congress should pressure the administration to stop 
investing in ineffectual Trade and Investment Framework Agreements 
(TIFAs) and start investing in BIT negotiations. Over the last decade, 
USTR has focused almost solely on pursuing TIFAs in sub-Saharan Africa, 
which provide no binding protections for U.S. investors and do not 
advance a real reform agenda. This misplaced and nonstrategic effort 
has distracted limited U.S. Government attention from pursuing real 
negotiations with African nations. Put differently, while China, 
Canada, and other nations have been signing countless legally binding 
treaties, the United States has been signing TIFAs that provide no 
tangible benefit to U.S. investors and companies. It is time to stop 
allocating scarce resources to these inconsequential talk shops and 
move toward pursuing real agreements that catalyze much needed (and 
wanted) investment flows.
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  recommendation 2: reform and unleash u.s. development finance tools
    There is an urgent need to implement targeted reforms that would 
improve the effectiveness, impact, and scale of U.S. development 
finance institutions. In many ways, the future of development policy 
lies in development finance. This reflects a number of new dynamics, 
including: growing citizen and business demand, entry of new emerging 
market actors, a shift toward private sector-oriented development 
models, and the declining importance of foreign aid. As noted 
previously, foreign government partners are increasingly focused on 
attracting private investment, especially in infrastructure and 
productive sectors. Nearly every national development strategy includes 
a strong emphasis on attracting investment for physical infrastructure 
(e.g., electricity and transport) and labor-intensive sectors such as 
agriculture and services. Currently, most U.S. aid programs are not 
designed, structured, or equipped to address these shifting needs.
    The primary U.S. development finance institution, the Overseas 
Private Investment Corporation (OPIC), is a highly constrained and 
underutilized tool. OPIC's mission is to promote U.S. development, 
commercial, and foreign policy objectives through private investment 
abroad. It is a remarkably effective tool for U.S. policy given its 
constraints. It provides U.S. investors in developing countries with 
debt financing, loan guarantees, political risk insurance, and support 
for private-equity investment funds when private actors cannot. It 
operates on a self-sustaining basis and has provided positive net 
transfers to the U.S. Treasury for nearly 40 consecutive years. Since 
its inception, OPIC has helped mobilize more than $200 billion of U.S. 
investment through more than 4,000 development-related projects. 
However, a modernized, scaled-up OPIC is desperately needed as U.S. 
development policy moves beyond aid.
    With few exceptions, OPIC has not evolved since its establishment 
in 1971. This means that OPIC has been unable to adapt its model to 
changing market-based demands and/or adequately address some of its 
past critiques (see details below). For instance, OPIC remains highly 
constrained by inadequate staffing and outdated authorities. It must 
rely on congressional appropriations to cover annual administrative 
expenses (e.g., salaries, travel, and office space), despite generating 
operating profits on a consistent basis. This de facto constraint has 
prevented OPIC from fully leveraging its existing capital base in 
support of U.S. development and foreign policy objectives. In practical 
terms, this means that roughly $11 billion in development capital 
remains locked away while more and more U.S. investors are seeking 
assistance to enter frontier markets, such as Nigeria, Ghana, and 
Kenya.\4\
    Other traditional players have adapted their development finance 
tools and are leaving the United States far behind. Well-established 
European development finance institutions (DFIs) are providing 
integrated services for businesses, which cover debt and equity 
financing, risk mitigation, and technical assistance. These European 
institutions, such as the Netherlands FMO or Germany's DEG, were not 
originally designed this way. Instead, they have been reformed over the 
course of decades to ensure that their tools match the needs of 
investors, businesses, and overall development objectives. The U.S. 
Government, including Congress, can learn from these experiences and 
push through a number of targeted reforms.
    Many emerging market nations have accelerated the trend by 
establishing development finance vehicles. It is not just European 
institutions that are pushing ahead. Many emerging market actors--
including China, India, Brazil, and Malaysia--have dramatically 
increased financing activities in developing regions, such as sub-
Saharan Africa, Latin America, and East Asia. The $50 billion Asian 
Infrastructure Investment Bank, championed by China, has been in the 
headlines recently. However, it is far from the only example. The $50 
billion BRICs Bank, also driven by China, is expected to provide 
additional alternatives for African nations.
    The time has come for a U.S. Development Finance Corporation 
(USDFC) that would harness America's three greatest strengths: 
innovation and technology, entrepreneurship, and a deep capital base. 
My colleague Todd Moss and I have outlined this idea in significant 
detail in a new Center for Global Development paper released this 
week.\5\ Other think tanks (e.g., Brookings Institute, CSIS, and 
Council on Foreign Relations), the President's Global Development 
Council, and private foundations and academics have all advocated 
similar proposals.\6\ This is a big idea whose time is now.
    A reformed and enhanced OPIC would form the foundation of this 
strategic institution. It also would consolidate a number of other 
investment-related tools that are scattered across USAID, the U.S. 
Trade and Development Agency, and other U.S. development agencies. 
Importantly, the new USDFC would be financially self-sustaining and 
managed according to market-based metrics.
    The USDFC will require bold congressional leadership and a number 
of targeted reforms. These reforms also would address historical 
critiques of OPIC, such as the appearance of providing corporate 
welfare and/or crowding out private capital. By simultaneously 
reforming this pivotal institution and providing it with new 
authorities and flexibility, the U.S. Government would ensure that its 
development finance tools are fit for purpose in the 21st century.

   Explicit project approval criteria to ensure that private 
        capital is crowded in, not displaced or crowded out. 
        Specifically, the USDFC Board of Directors should receive and 
        consider documentation illustrating that the proposed project 
        would not proceed without USDFC support. Such action is 
        essential for avoiding any appearance of corporate welfare. In 
        turn, the institution should report annually on the so-called 
        ``additionality'' of its operations. In practical terms, this 
        means documenting how its project-level activities helped to 
        catalyze and unlock private sources of capital that would not 
        have happened without USDFC involvement.
   A presumption of public disclosure on its operational 
        activities and development impact. There should be a high bar 
        for withholding information due to commercial confidentiality 
        concerns. At a minimum, the institution should publish all 
        project description summaries and project-level development 
        performance data on an annual basis. Such actions would enhance 
        public accountability.
   Flexible portfolio and staffing levels that uphold rigorous 
        performance and financial management standards. The institution 
        should not have an ex-ante portfolio target size. Instead, it 
        should have sufficient flexibility to support investments that 
        demonstrate strong development impact, prudently managed 
        financial risks, and clear ``additionality'' vis-a-vis private 
        sector alternatives. To ensure rigorous congressional 
        oversight, performance metrics covering each of these areas 
        should be reported regularly to the appropriate committees.

    The aforementioned reforms should be actively considered for OPIC 
even if Congress does not establish a consolidated U.S. Development 
Finance Corporation. Each of these changes would improve OPIC's 
operational effectiveness, address past critiques, and enhance public 
accountability. Therefore, they should be pursued even if Congress does 
not consolidate other agencies' investment-related tools or provide 
additional authorities.
recommendation 3: pass the energize africa/electrify africa legislation 
 to help address binding energy access constraints across the continent
    Unreliable and costly electricity is a major competitiveness and 
human development constraint in nearly every African country. Roughly 
600 million Africans lack access to any form of modern electricity, 
which greatly reduces economic opportunities as well as health and 
education outcomes. Half of African firms cite electricity as a major 
constraint on their competitiveness, profitability, and expansion 
potential. In some African economies, losses from power outages amount 
to more than 10 percent of sales. In addition, greater than 80 percent 
of firms in Ghana, Tanzania, and Uganda cite concerns with power 
reliability and affordability.
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    The further expansion of the Power Africa Initiative was the most 
tangible outcome from the U.S.-Africa Leaders Summit. Based on early 
progress, President Obama announced a tripling of the original Power 
Africa targets. The initiative now aims to deliver 30,000 megawatts of 
power generation capacity and new connections for at least 60 million 
households and businesses. Unofficially, this could mean up to 300 
million people acquiring access to reliable and affordable electricity 
over time (average household size = 8 5 people). These are bold targets 
and President Obama should be commended for setting them.
    U.S. development agencies--including USAID, OPIC, and the MCC--have 
made tangible progress in implementing the Power Africa vision. Public 
sector commitments total over $7 billion, mostly from OPIC and the U.S. 
Export-Import Bank, plus some USAID technical assistance. This has 
helped to catalyze over $20 billion in private capital from power 
development companies and investors. The initiative also has leveraged 
additional investment from other official actors, including $5 billion 
from the World Bank and $1 billion from Sweden.
    The Power Africa team has been strategic in where and how it has 
deployed scarce U.S. taxpayer resources. USAID has used grant resources 
selectively, targeting them on sector-level reforms that would enable 
massive private investments. Supporting Nigeria's power sector 
privatization plans is a noteworthy illustration. Moreover, USAID, the 
Commerce Department, and OPIC partnered with leading power developers 
and legal scholars to develop a model power purchase agreement that 
could dramatically reduce the amount of time required to bring 
generation projects to closure. These activities do not garner much 
public attention, but they have the potential to deliver massive 
practical impact with very little U.S. taxpayer money.
    In addition, the Obama administration is rightly focusing on 
measuring its impact across a range of areas. All effective 
Presidential initiatives--such as PEPFAR, the President's Malaria 
Initiative, and the MCC--have one thing in common. They have an 
overriding focus on measuring, tracking, and evaluating the impact of 
their activities. Power Africa has an initial plan in place, and its 
core team is thoughtfully developing a comprehensive and rigorous long-
term monitoring and evaluation plan. This is not a straightforward 
exercise given data deficiencies in much of the region. Nonetheless, I 
am hopeful that they will come forward with a practical plan of action 
soon that will help to keep the relevant U.S. Government agencies 
accountable going forward.
    Further Power Africa progress will partly depend on finding 
permanent solutions to well-intended, but ineffectual and harmful, U.S. 
investment regulations. The lack of multiyear congressional 
authorization for OPIC has put the agency (and U.S. investors), tasked 
with negotiating complex long-term infrastructure deals, in a state of 
uncertainty. OPIC has also been unable to reliably support a 
diversified mix of power generation projects. A carbon emissions cap 
has effectively pushed the agency out of all natural gas projects in 
the world's poorest countries. Meanwhile, many African countries are 
actively exploring for and developing natural gas deposits, which would 
deliver low-cost and reliable fuel sources. The cap (temporarily lifted 
in the FY14 and FY15 Appropriations Acts) is undermining Power Africa's 
potential and dampening U.S. investment abroad. Meanwhile, it is making 
no meaningful impact on carbon mitigation objectives. All of sub-
Saharan Africa accounts for roughly 2 percent of current global carbon 
emissions. Even if all African countries adopted zero carbon 
strategies, it would have almost no impact on global targets. And in 
the meantime, millions of people in poor countries would be denied 
access to life-transforming electricity. There are practical compromise 
options to address this divisive issue.\6\
    Going forward, Congress should strengthen and formalize Power 
Africa through authorizing legislation, which includes clear reporting 
targets, multiyear authorization for OPIC, and an exemption from carbon 
cap rules for the poorest, low-emitting countries. The greatest risk 
right now is that U.S. momentum will recede after the current 
administration leaves office. Energy poverty is too long term and too 
critical an issue to allow that to happen. Passing authorization 
legislation would make it a durable U.S. development effort and ensure 
that energy poverty remains at the top of the U.S.-Africa agenda.
                               conclusion
    The U.S.-Africa Leaders Summit was an important moment for our 
relationship with this increasingly important region. While the summit 
had a clear emphasis on promoting economic engagement, largely through 
greater trade and investment, the subsequent impact on actual U.S. 
Government policy and messaging has been mixed. The Power Africa 
initiative is a noteworthy example of where ongoing U.S. activities are 
meaningful and strongly aligned with Africans' priorities.
    Congress should advance U.S. efforts to promote economic engagement 
and development priorities in the region, and push the Obama 
administration to do more. First, it should urge the administration to 
negotiate legally binding Bilateral Investment Treaties (BITs) with 
African nations. Second, Congress should consider creating a U.S. 
Development Finance Corporation or pursuing more modest reforms that 
would improve and unleash the Overseas Private Investment Corporation 
(OPIC). Third, Congress should pass Energize/Electrify Africa 
legislation that promotes U.S. investment in the power sector and seeks 
to improve economic opportunities along with health and education 
outcomes. None of these actions entail additional budgetary outlays. 
Instead, they are strategic, results-based policy tools that would give 
a significant boost to U.S.-Africa relations.

----------------
End Notes

    \1\ Benjamin Leo, Robert Morello, and Vijaya Ramachandran (2015). 
``The Face of African Infrastructure: Service Availability and 
Citizens' Demands,'' Working Paper 393, Center for Global Development, 
Washington DC.
    \2\ For instance, Egger and Pfaffermayr (2004), Peinhardt and Allee 
(2007), and Haftel (2010) find that BITs consistently increase FDI 
between the associated countries once they are signed and ratified. 
Salacuse and Sullivan (2005) find that the presence of a U.S. BIT 
translates into increased FDI to a given country in a given year by 77 
percent to 85 percent. Savant and Sachs (2009) argue that foreign 
investors with exposure to extractive industries often rely on BITs 
because of the historical experience of host governments behaving in a 
discriminatory or even predatory fashion. Busse, Koniger, and 
Nunnenkamp (2010) find that BITs likely substitute for weak domestic 
institutions in developing countries. However, there are other studies 
that do not find that BITs have a statistically significant impact on 
FDI flows. These differing empirical results appear to be driven 
largely by methodological challenges. First, BITs can vary 
substantially in terms of the quality of investor protections and 
industry sector coverage. An investment treaty with watered down 
provisions or large sector carve-outs arguably would have a smaller 
impact on promoting FDI flows. Second, in some instances, it is 
difficult to clearly establish whether specific BITs were focused on 
promoting new foreign investment or on protecting existing FDI stocks 
after the fact.
    \3\ Malaysia and Vietnam are two prospective signatories to the 
Trans-Pacific Partnership (TPP) agreement, with which the U.S. 
currently does not have either a BIT or FTA investment chapter in 
place. Brunei, Japan, and New Zealand are the only other TPP countries 
without a U.S. investment agreement.
    \4\ Under existing congressionally approved authorities, OPIC has a 
maximum contingent liability limit of $29 billion. As of 2014, OPIC had 
committed roughly $18 billion of this maximum limit. This means that 
OPIC could provide an additional $11 billion to support private 
investment transactions in developing countries.
    \5\ Ben Leo and Todd Moss (2015). ``Bringing U.S. Development 
Finance into the 21st Century: Proposal for a Self-Sustaining, Full-
Service US Development Finance Corporation,'' Center for Global 
Development.
    \6\ For additional details, see: (1) U.S. Global Development 
Council (2014), Beyond Business As Usual; (2) Brookings Institute 
(2013), ``Strengthening U.S. Development Finance Institutions''; and 
(3) U.S. National Advisory Board on Impact Investing (2014), Private 
Capital, Public Good.
    \7\ For additional details, see Todd Moss, Roger Pielke, Jr., and 
Morgan Bazilian, ``Balancing Energy Access and Environmental Goals in 
Development Finance: The Case of the OPIC Carbon Cap,'' CGD Policy 
Paper 38.

    Senator Flake. Thank you, Mr. Leo.
    Mr. Renigar.

  STATEMENT OF DEL RENIGAR, SENIOR COUNSEL, GLOBAL GOVERNMENT 
     AFFAIRS AND POLICY MIDDLE EAST, AFRICA AND INDIA, GE 
                  CORPORATION, WASHINGTON, DC

    Mr. Renigar. Good morning. Thank you, Mr. Chairman. Thank 
you, Ranking Member Markey and Senator Isakson. It is a 
pleasure to be here.
    My name is Del Renigar with General Electric. As you may 
know, GE has a rich history in Africa going back more than 100 
years. Today, we have over 2,300 employees across 25 countries, 
and Africa has been one of our fastest growing regions in 
recent years for the entire company.
    Given this history and these opportunities, GE sought to 
maximize its participation in the U.S.-Africa Leaders Summit, 
with more than 30 leaders in town from GE during that 1-week 
period. We hosted six major events, including an energy thought 
leadership conference with The Economist called ``Africa 
Ascending.'' We announced more than $2 billion in investments 
in facility development, skills training, and new 
sustainability initiatives, and we held over 100 meetings with 
heads of state and ministers.
    Key deliverables for GE related to the summit include 
several billion dollars in rail, power generation, health care, 
and aviation deals across the continent, as well as related 
scholarships, training, and technical support for African 
students, patients, workers, and health care professionals.
    One I might highlight in particular is our work with mobile 
ultrasound, so-called V-Scans. We are working with midwives in 
Ghana and Nigeria to give them the training that they need so 
they can use this new mobile technology to provide health care 
in rural regions.
    GE's engagement with the summit is ongoing. Our CEO for 
Africa, Jay Ireland, has been appointed to the President's 
Advisory Council on Doing Business in Africa, and we are 
actively working with the Commerce Department now in preparing 
recommendations on infrastructure.
    Despite all of these good news stories, as you know, the 
continent suffers from extreme energy poverty that severely 
limits its growth and its development. But many African 
companies are taking steps to improve energy access. Afrisol 
Energy, a 4-year-old Kenyan company, is looking to turn waste 
into fuel to power Nairobi's slums and rural neighborhoods. 
This is but one of several African companies who have won 
awards and grants from GE, USAID, and the U.S.-Africa 
Development Foundation for innovations using renewable, 
distributed power solutions.
    These and other distributed power solutions can help 
address the needs of Africa. These include small-scale power 
sources from 100 kilowatts to 100 megawatts that run on fuel 
from solar, from fuel cells, from gas, from diesel, and even 
wind.
    To be clear, though, these distributed power solutions, 
even though they are quite strong in Africa, will only play a 
complementary role. Africa will still need centralized and 
large-scale gas and power grids in order to deal with 
urbanization and industrialization.
    Building on these models, gas-to-power initiatives are a 
way to make power available to people who need it, especially 
in a place like Africa, which is endowed with 400 trillion 
cubic feet of gas reserves. We see a tremendous opportunity to 
use gas-to-power initiatives to address the energy access in 
Africa. The basic concept entails convening stakeholders, 
governments, developers, fuel suppliers, equipment providers 
and financiers to craft a workable, holistic approach to 
identifying and delivering gas resources to add new power 
generation capacity where it is needed.
    The best example of this is in Ghana, the Ghana 1000 
project. This is a signature Power Africa project that has 
involved an entire whole-of-government approach with MCC, 
USAID, Ex-Im, OPIC, and the U.S. Government as a whole. This 
project consists of a floating storage and regasification unit, 
the first in sub-Saharan Africa, and related infrastructure for 
the import and domestic use of LNG. This will be used to power 
over 1,300 megawatts of combined-cycle power in Western Ghana. 
This will have a long-term impact in Ghana and throughout the 
region because it will provide lower emissions, it will provide 
the first opportunity to use LNG in this way, it will displace 
diesel, and will also provide opportunities for distributed 
power, as well as powering regions and cities. When it is 
complete, we believe that the Ghana 1000 will be a model 
project that can be replicated across the continent.
    Another place where we need to be focusing on gas-to-power 
is Nigeria. As you know, this is one of the largest countries 
on the continent, and they have some of the largest gas 
reserves in the world. Yet, they have very, very little power. 
There are a number of problems in their gas infrastructure. 
There is flaring. There is reinjection of gas going on as well.
    The government has tried to implement a number of 
privatization initiatives to turn brown-field power plants into 
new projects and expand the power there, but they are running 
into a number of obstacles. Investors are beginning to get 
concerned. This is an area that we have to pay particular 
attention to if we are going to address energy access in 
Africa.
    The opportunities here for the U.S. Government are 
significant. What we see is really a need for government to see 
projects through from beginning to end. It is not so much the 
physical barriers but the procedural barriers that are hanging 
up projects in sub-Saharan Africa.
    One particular issue that we need to talk about is the 
issue of finance. These projects do need finance, and that 
means Ex-Im and OPIC. These are programs that we have used 
around Africa. Our customers value these, the African 
governments value these programs, and we believe that with more 
flexibility and more reform, that OPIC and Ex-Im can continue 
to play an important role in developing these projects. We urge 
the Congress, we urge the administration to renew these 
important programs.
    There are a number of other initiatives going on that 
support this. MCC is beginning to look at cross-border 
infrastructure projects which will promote regional 
integration. TDA is doing life-cycle cost analysis on 
government procurement that will well position U.S. goods and 
services vis-a-vis Chinese competitors because it will 
emphasize quality and maintenance. And finally, the whole array 
of core trade and finance and development programs needs to be 
continued to be supported and backed up. I know this committee 
has worked very hard, for example, on having foreign commercial 
service officers throughout the continent. Those officers are 
setting up in places like Angola and Mozambique as we speak, 
and this is also very important.
    Let me just also underline that Africa is an incredibly 
important market to General Electric. It is one that we care 
deeply about, and we look forward to working with this 
committee and the U.S. Congress and the administration on ways 
that we can work together to improve energy access, but also 
ensure sustainability and higher quality of life across the 
continent.
    Thank you very much.
    [The prepared statement of Mr. Renigar follows:]

                   Prepared Statement of Del Renigar

    Mr. Chairman, Ranking Member Markey, and members of the 
subcommittee--thank you for the opportunity to testify today on the 
U.S.-Africa Leaders Summit and the related issue of energy access in 
Africa. I am Del Renigar, Senior Counsel for Global Government Affairs 
and Policy, for General Electric.
                              ge in africa
    GE has a rich history in Africa that spans more than 100 years. 
GE's capability and global expertise in the power generation, health 
care, rail transportation, water, oil and gas, and aviation sectors 
allow us to play a significant role in the development of the 
continent. We now have more than 2,350 employees across more than 25 
countries in the region, providing solutions that support Africa's 
infrastructure and sustainable growth and increasing U.S. investment 
and trade with the region.
    In addition to the power generation portfolio which I will discuss 
momentarily, GE provides leading technology and services for the 
exploration and production of oil and gas, freight locomotives and 
aircraft engines, and imaging and diagnostic solutions for hospitals 
and clinics. From Transnet in South Africa to Ethiopian Airlines to 
hospitals in Kenya, to power projects in Nigeria and oil companies 
across the continent, Africa is home to some of GE's best customers and 
most important deals.
                       u.s.-africa leaders summit
    Africa has been GE's fastest-growing region since 2000. But lasting 
growth, both for the continent and for companies that invest there, 
depends on sustaining investment and fostering partnerships on both 
sides of the Atlantic. To this end, when President Obama hosted over 40 
African heads of state in Washington, DC, for the first-ever U.S.-
Africa Leaders Summit, GE sought to maximize this unprecedented 
gathering of public and private stakeholders.
    With more than 30 GE leaders in town for the week-long event, GE 
teams across three regions (United States, sub-Sahran Africa, and North 
Africa) partnered to host six major events, including a thought 
leadership conference with The Economist called Africa Ascending; 
orchestrated 100+ bilateral meetings with leaders; and announced more 
than $2 billion in facility development, skills training, and 
sustainability initiatives across Africa by 2018. Our investment will 
be focused in three strategic areas: building infrastructure, 
delivering localized solutions to customers, and capacity-building. 
Some of the specific new deliverables include:

   Supplying small, distributed gas turbines in Algeria and 
        Nigeria to increase grid reliability;
   Updating and expanding a ``Company-to-Country'' agreement 
        with Nigeria to support infrastructure projects and the 
        transfer of skills and technology;
   Providing approximately $1 billion in railway and power 
        equipment to Angola;
   Providing approximately $1 billion in rail equipment to 
        South Africa
   Providing approximately $500 million in aircraft engines to 
        Ethiopian Airlines;
   Supporting scholarship programs in Angola and Mozambique;
   Enabling leadership training, technical support, and access 
        to capital for young entrepreneurs as a part of the Young 
        Africa Leaders Initiative (YALI);
   Partnering with the Bush Institute on its Pink Ribbon Red 
        Ribbon initiative, which provides technical assistance and 
        capacity-building related to cancer and HIV/AIDS; and
   Investing $20 million over the next 5 years in health 
        programs across Africa through the GE Foundation to train nurse 
        anesthetists and biomedical equipment technicians.

    GE's engagement continues beyond the conclusion of the event 
itself. In response to an Executive order signed at the summit, 
Commerce Secretary Pritzker established the President's Advisory 
Council on Doing Business in Africa to advise the President on 
strategies for strengthening commercial engagement. Jay Ireland, 
President and CEO of GE Africa, is honored to serve on the Council, and 
GE is playing an active role in informing the Council's recommendations 
on trade and investment, particularly related to infrastructure.
                 increasing energy access in the region
    GE believes there is profound opportunity in Africa and that U.S. 
companies should be aggressively engaging and investing in the 
continent now to be part of its long-term growth. At the same time, 
however, there are challenges. Power inefficiencies cost the region 
$3.2 billion annually in lost productivity, while consumption is only 
one-tenth of that found elsewhere in the developing world. This means 
that it takes an Ethiopian 2 years to consume the amount of energy an 
American or European uses in a matter of days. Without reliable and 
affordable power, Africa's growth will be constrained, entrepreneurs 
and small and medium enterprises will not be able to grow, and health 
care and education will be unable to meet the needs of a rapidly 
growing population.
    African countries can build sustained and inclusive economic growth 
by increasing access to reliable and affordable power, and many African 
companies are taking steps to do just that. Afrisol Energy, a 4-year-
old Kenyan company, is looking to turn waste into fuel to power 
Nairobi's slums and rural neighborhoods. The biodigesters it is 
developing will both alleviate sanitation problems and generate 
electricity to allow school children to read after dusk or enable 
clinics to refrigerate vaccines.
    Afrisol's work is symbolic of the inventiveness and entrepreneurial 
spirit that drive people to overcome structural barriers and unlock 
growth potential. The company was one of the winners of an innovation 
challenge launched by GE, USAID and the U.S.-Africa Development 
Foundation that awarded funding to businesses working to bring 
sustainable, renewable energy technologies to underserved markets. 
Afrisol was one of more than 150 entries, a fact that illustrates how 
many African companies are innovating to solve the region's challenges.
    Last fall, GE and our partners awarded grants to four Nigerian 
companies that are working to develop localized biogas facilities, 
biomass power generation plants, a solar-powered microgrid, and a solar 
maize-mill processing facility. Eighteen other innovators from Kenya, 
Ethiopia, Tanzania, Liberia, and Ghana also received $100,000 grants to 
scale up projects providing renewable solutions to energy challenges in 
communities outside the national grid.
    At GE, we believe these and other distributed power systems can 
help address the power needs of Africa. Distributed power technologies 
are small power systems typically ranging in size from 100 kW to 100 MW 
and located at, or near, the point of use. The current suite of 
distributed power technologies often includes natural gas and diesel-
powered reciprocating engines, small gas turbines, fuel cells, solar 
panels and wind turbines.
    Africa has a unique set of conditions that make distributed power 
technologies particularly attractive. Distributed power is critical to 
increasing electrification rates in these areas and providing basic 
services to these populations.
    To be clear, even though the drivers for distributed power are 
strong today, Africa will still need centralized power and large-scale 
gas and power grids to accommodate a variety of fuels. Increasing 
urbanization and the need to capture economies of scale for cities and 
industrial centers will drive need for central power stations. In our 
view, the scalability and flexibility of distributed power will 
complement rather than fully displace centralized power development.
                              gas to power
    Power is essential to Africa's continued growth, and new energy 
discoveries are making it possible to address the huge needs of the 
region. Gas is poised to capture a larger share of the world's energy 
needs. World gas demand could reach approximately 4,600 BCM by 2025, 
which is 32 percent higher than today. Regional gas markets are 
expanding. A global network is developing rapidly, but to capture the 
efficiency and environmental benefits relative to other hydrocarbons, 
infrastructure development needs to accelerate, particularly in Africa. 
Gas will be an attractive alternative to oil in transportation and 
other distributed energy settings as new supplies are brought online. 
Further, as regional economies grow, Africa will increasingly look to 
supply its own agricultural and industrial needs as well as export gas.
    Gas-to-power initiatives are a way to make power available to 
people who need it. Despite the region's gaping power deficit, it is 
endowed with over 400 trillion cubic feet (Tcf) of gas reserves. 
Nigeria in particular has among the largest gas reserves in the world 
(180 Tcf). Tanzania is another example where analysts estimate recent 
gas finds totaling 25 to 30 Tcf of recoverable resources. These 
resources have the potential to bring electricity to the 82 percent of 
the country's population currently without reliable power while 
transforming Tanzania into a natural gas exporter. Bringing these 
stranded assets ``online'' will help meet the urgent demand for 
electricity and provide an alternative to diesel in low-income 
countries.
    In sub-Saharan Africa, GE sees a tremendous opportunity to work 
with a broad set of partners to enable reliable, domestic power through 
gas-to-power projects. The basic concept behind GE's gas-to-power 
initiative entails convening stakeholders--including governments, 
developers, fuel suppliers, equipment providers and financiers--to 
craft a workable, holistic approach to identifying and delivering gas 
resources to add new power generation capacity where it is needed and 
makes economic sense. Local needs vary drastically across and even 
within countries, and each requires a solution tailored to that 
context.
    One of the greatest benefits of these systems is their scalability. 
The gas-to-power solution can serve distributed power needs as well as 
those of larger cities or regions. Systems can be designed to address 
the challenges and demands of specific customers or geographies.
    Take Ghana as an example. Since 2012, the country has faced power 
shortages caused by inadequate and unreliable gas supplies to run power 
plants. GE is working with a set of partners to develop Ghana 1000, 
sub-Saharan Africa's largest-integrated gas to power project. The 
project consists of a floating storage and regasification unit (FSRU), 
possibly first in-service for sub-Sahara Africa, and related 
infrastructure for the import and domestic use of liquefied natural gas 
(LNG). The LNG will be used to power a 1300MW combined cycle power 
plant, located in Aboadze in the Western Region of Ghana. Beyond the 
scope of the project itself, the FSRU will have additional capacity to 
allow other power generators to shift from liquid fuels to LNG for 
power generation.
    This project offers significant economic and environmental 
benefits. LNG can potentially lower the cost of power in Ghana by up to 
35 percent, reducing energy costs by $1 billion annually. Reliable 
power supplies and LNG imports will drive significant new economic 
activity, both within Ghana and elsewhere in the region. By shifting up 
to 3GW of thermal capacity from light crude oil to cleaner natural gas, 
the project will significantly reduce emissions and deliver associated 
health and environmental benefits.
    At the same time, GE has also made a significant commitment to 
training and capacity-building in Ghana. In partnership with Ashesi 
University College, GE is helping develop an academic curriculum to 
train students in skills needed to thrive in the country's growing 
energy sector. GE is also providing 4-year scholarships to 100 
engineering students in Ghanaian universities and vocational 
institutions. We believe these investments will help build the 
workforce needed to ensure and oversee the sustained success of Ghana's 
energy economy.
    When it is complete, the Ghana 1000 project will be a signature 
accomplishment of the Power Africa Initiative. We are currently working 
with USAID, OPIC, Ex-Im, and the MCC to ensure a clear federal 
commitment to the success of the project. Efforts at this scale require 
a whole-of-government approach, which is embodied in the goals and 
objectives of Power Africa.
              the opportunities and challenges in nigeria
    Another key region with huge gas-to-power potential is Nigeria. It 
is the largest country in Africa and accounts for 47 percent of West 
Africa's total population, yet less than half of its 179 million people 
have access to electricity and only 20 percent in rural areas. Despite 
the fact that Nigeria is the largest oil exporter in Africa and has the 
largest natural gas reserves in the continent, electricity scarcity is 
severely constraining economic growth and development.
    One of the challenges in the power sector is an underdeveloped 
domestic gas network and underinvestment in gas production. Despite 
large gas reserves and byproduct gas from its oil production, low fixed 
prices for gas do not sufficiently incentivize companies to capture 
this resource. Instead they re-inject the gas to boost oil production 
or flare it off. Key elements of the Gas Master Plan in Nigeria are 
advancing and could help--including price adjustments and key 
infrastructure--but the process has been painfully slow.
    In August 2013, Nigeria announced the largest power sector 
privatization in the world, breaking up the large national power 
company, selling off of generation assets to private investors, and 
separating transmission and distribution into separate operating 
companies. These efforts are starting to yield positive benefits and 
are attracting foreign and domestic investments in the power sector. 
Investors and developers, however, are concerned that a number of key 
representations by the Nigerian Government have not yet been met, 
specifically the assurance of the gas allocation for the projects and 
elements of the government support agreements that are essential for 
investors taking risk in these new private companies.
    For example, the Azura project, a 450 MW gas-fired power plant 
located in Edo State, Nigeria, had been seen as the model for 
integrated power projects (IPP), however the Nigerian Government has 
cast doubt as to whether the structure used for Azura will remain the 
same for new greenfield investments.
    As a result of these recent setbacks, we believe the market in 
Nigeria has slowed and that investors are watching developments to 
assess the feasibility of the projects and level of Nigerian Government 
support. Fresh engagement by the U.S. Government to convene investors, 
developers, and Nigerian Government partners is needed to encourage 
continued reforms.
                      federal policy opportunities
    The barriers to powering communities and cities across the 
continent are increasingly becoming less physical, but more procedural. 
While there is increasing private investment in energy projects in 
Africa, there is a continued need for active government involvement to 
keep these significant public-private partnerships on track. We 
consistently require government engagement in the details, to keep 
projects on track through implementation and execution. There is an 
ongoing government role to help solve issues relating to how to agree 
to contracts more efficiently, how to properly price gas once it is 
brought to market, and most especially, how to finance energy projects.
    It is critical that our customers have access to competitive 
financing to support these sorts of deals. We support reauthorizing the 
Overseas Private Investment Corporation (OPIC) and the Export-Import 
Bank (Ex-Im), and we encourage Congress to seek improvements to make 
both institutions more flexible and user-friendly, and to use the full 
range of their tools and authorities. Similarly, it is important to 
ensure that the U.S. Agency for International Development (USAID) has 
sufficient funding and flexibility to use its delegated credit 
authority to work with companies on projects. We also support efforts 
led by several members of this committee to ensure sufficient Commerce 
Department resources for commercial, advocacy and market intelligence 
support in sub-Saharan Africa.
    Coupled with these programmatic efforts and ongoing oversight, we 
encourage Congress to continue to support, expand, and improve the core 
federal programs that enable U.S. companies to meet the needs of 
foreign markets. At GE, nearly 60 percent of our revenues derives from 
markets abroad--up from 40 percent just a decade ago. Much of our 
opportunity for future growth lies in these expanding markets, and 
these sales sustain our significant domestic manufacturing base, 
including thousands of jobs in research, design, engineering, assembly 
and services.
                               conclusion
    Thank you for the opportunity to share GE's experiences in sub-
Saharan Africa. The 2014 U.S.-Africa Leaders Summit helped to further 
strengthen diplomatic and economic ties between governments and 
business leaders from both sides. We are having meaningful 
conversations about sustainable growth models, improving standards of 
living, reducing wealth disparity, and improving access to energy. 
Governments, companies and the confluence of public and private capital 
are all part of an equation in which the whole can be greater than the 
sum of the parts.
    Building on the outcomes of the summit, we look forward to 
continuing to work with this committee and our partners to support the 
U.S. Government's ongoing efforts to power economic growth and advance 
prosperity across the continent.
    I am happy to answer any questions you may have. Thank you.

    Senator Flake. Thank you, Mr. Renigar.
    Ms. Tuttle.

STATEMENT OF SUSAN C. TUTTLE, DIRECTOR, MIDDLE EAST AND AFRICA 
GOVERNMENT AND REGULATORY AFFAIRS, IBM CORPORATION, WASHINGTON, 
                               DC

    Ms. Tuttle. Thank you. Good morning, Chairman Flake, 
Ranking Member Markey, Senator Isakson, and Senator Coons. 
Thank you very much for the opportunity to share IBM's views on 
the challenges and opportunities that we see in Africa.
    IBM does business in over 170 countries, but several years 
ago IBM made a decision to significantly expand our investments 
across the continent. Ginni Rometty, IBM's chairman, president, 
and CEO, was one of a select few U.S. CEOs to speak at the 
U.S.-Africa Business Forum, which was a major component of the 
U.S.-Africa Leaders summit, where she shared IBM's enthusiasm 
and optimism about the potential of the African economies.
    IBM has operated in Africa since 1920 and has had a direct 
presence there since 1939. In 2006, we had offices in 4 African 
countries, but today we have a direct presence in 24.
    IBM launched its first African research lab in 2013, our 
12th global research lab, where researchers are focused on 
finding solutions to Africa's most pressing challenges in many 
of the key areas that you highlighted.
    It is important to remember that Information and 
Communication Technology (ICT) is a transformative core enabler 
that benefits all sectors of the economy, and there is ample 
cause for optimism that modern technologies and market-based 
systems will help provide the boost that African countries need 
to participate fully and successfully in the global community.
    Key opportunity areas include banking and financial 
services, telecommunications, energy and utilities, health 
care, government, agriculture, retail, and the tech sector. My 
written testimony includes examples of where IBM is engaging in 
each of these areas.
    IBM is keenly focused on building the skills and capacities 
of Africa's people and institutions, and has many ambitious and 
collaborative initiatives involving academia, government, and 
enterprises. The Young African Leaders Initiative, or the YALI 
Network, was highlighted during the U.S.-Africa Leaders Summit. 
IBM is partnering with the U.S. Government, working closely 
with Notre Dame and Yale, where IBM Fellows are engaging YALI 
participants on topics ranging from creativity and leadership 
to business strategy, social technologies, and financing.
    IBM also launched several initiatives to help curb the 
spread of Ebola in West Africa, including a citizen engagement 
and analytic system in Sierra Leone that enables communities 
affected by Ebola to communicate their issues and concerns 
directly to the government. We also donated IBM connections 
technology to strengthen Nigeria's Lagos state government's 
preparedness for future disease outbreaks, and most recently 
provided a global platform for sharing Ebola-related open data.
    The U.S.-Africa Leaders Summit sent a strong message to the 
African leaders about the importance of Africa to the United 
States and to U.S. companies, but we need sustained focus and 
engagement in order to see real results. Africa is growing 
rapidly, but doing business in Africa comes with a unique set 
of challenges. It is a continent of 54 countries, each with its 
own political, economic, and cultural dynamics and its own pace 
of development. The U.S. Government can and should continue to 
play a role in helping open these markets.
    We face strong competition across the continent from our 
foreign competitors whose governments are playing a very active 
role in providing financial support and strong advocacy for 
their businesses. The U.S. Government has a different set of 
tools that they bring to the table, including Ex-Im, OPIC, 
USTDA, USAID, and the MCC. Businesses, clients, and governments 
want and need certainty and predictability to grow their 
businesses, and these U.S. Government assets need to be 
reauthorized, funded, expanded, and updated to respond to the 
needs of today's global economy.
    The U.S. Government's focus on helping companies navigate 
the complexities of doing business in Africa has been 
invaluable. Budget constraints are a reality, but companies of 
all sizes are benefitting from the advice, guidance, market 
insights and help in connecting companies to potential partners 
and government officials. Moreover, increasingly companies are 
looking for assistance to help resolve business issues and/or 
policy advocacy.
    As a result, we were very pleased about the Department of 
Commerce's announcement at the summit that they were opening 
new offices in Angola, Tanzania, Ethiopia, and Mozambique, 
while expanding their office in Ghana and also reestablishing a 
position in the Africa Development Bank, all very important for 
businesses.
    One of the key initiatives resulting from the U.S.-Africa 
Leaders Summit is the trade facilitation under way with the 
East African Community (EAC). Success with the EAC could lead 
to other regional initiatives that would eliminate barriers and 
harmonize processes among African nations, ultimately making it 
easier for U.S. companies to do business.
    Last month the U.S. Government hosted an East Africa 
Community Trade Ministerial with the EAC trade ministers, and 
IBM was one of the companies who represented the business 
community during the business roundtable where we emphasized 
the importance of digital trade and raised concerns about a 
growing trend of protectionist forced localization requirements 
that act as barriers to trade and investment.
    I will not turn to the issue of policy engagement and 
advocacy because this is an area where we really need your 
help.
    As Africa is becoming more fully integrated into the global 
economy, governments are wrestling with many of the same policy 
issues as other governments around the world. How do I attract 
investment? How do I grow my domestic industry, create jobs, 
and be globally competitive? How do I improve the skills and 
talent of my local workforce? And what are the right policies 
for dealing with issues like privacy and cyber-security?
    Governments are looking for models to follow, but we are 
concerned about a growing trend toward embracing protectionist 
models, particularly in the area of forced localization or 
local content requirements; in essence, supporting local 
industries by discriminating against foreign companies. Forced 
localization policies are not unique to Africa, but we are 
seeing a growing trend across the continent.
    The global economy cannot function without constant streams 
of data or information moving across borders. Data is a vital 
source of innovation and competitive advantage, and 
restrictions can have a negative impact on companies of every 
size. The Internet facilitates export of goods and services and 
enables companies, including small- and medium-sized 
enterprises, to have access to global supply chains, innovative 
services at competitive prices and participate in the global 
economy. More and more services are being delivered over the 
Internet, and we are seeing an increase in digital trade.
    While the U.S. Government has begun to engage on this 
issue, increased focus and attention is needed lest these 
protectionist policies spread. The goal of growing domestic 
industries is very valid, but forced localization and 
restrictions on cross-border data flows (CBDF) is the wrong 
approach that could ultimately discourage foreign investment, 
which is also key to economic growth.
    In conclusion, again, the summit provided a very important 
opportunity to send a message to our African counterparts, our 
African leaders about the importance that Africa holds for the 
United States and U.S. companies. But we do need a sustained 
effort, which is why a hearing today is so important and 
timely, to continue to keep the energy going and focus on 
Africa.
    In order for U.S. companies to remain competitive, we need 
the active support and engagement of the U.S. Government 
leveraging all the tools that we have at our disposal. Market 
opening initiatives such as trade facilitation, a focus of the 
U.S.-EAC Cooperation Agreement, can greatly increase the ease 
of doing business.
    And finally, as these markets are maturing, an increased 
focus and engagement on policy-related advocacy is essential. 
Forced localization is on the rise around the world and is 
spreading to the African Continent. In particular, we need to 
encourage governments to embrace policies that facilitate 
digital trade or cross-border data flows and reject digital 
protectionism. Data localization requirements could ultimately 
discourage investment and job creation, stifle innovation, and 
make the local economies less competitive, which is the 
opposite of the goal.
    Thank you again for this opportunity to share IBM's views.
    [The prepared statement of Ms. Tuttle follows:]

                 Prepared Statement of Susan C. Tuttle

    Good morning, Chairman Flake, Ranking Member Markey and 
distinguished members of the Africa and Global Health Policy 
Subcommittee. Thank you for the opportunity to speak with you today and 
share IBM's views on the opportunities and challenges we see as we 
aggressively expand our business in Africa.
    IBM does business in over 170 countries but several years ago, IBM 
took a fresh, hard look at what was happening in Africa, beyond the 
media headlines; and ultimately made a decision to significantly expand 
our investments across the continent. Ginni Rometty, IBM's Chairman, 
President, and CEO was one of a select few U.S. CEOs to speak at the 
U.S.-Africa Business Forum, a major component of the Leaders summit, 
where she shared IBM's enthusiasm and optimism about the potential for 
the African economies. We see Africa as a key emerging market of the 
current economic era, offering major opportunities for growth and 
transformation across multiple industry sectors.
                             ibm in africa
    After nearly a century of playing a vital role in Africa's 
development, IBM is now a part of the continent's technological fabric, 
business and community. As a technology leader, IBM is helping boost 
the capabilities of the African people and its institutions--including 
skills, technology infrastructure, governance, and scientific research.
    IBM has operated in Africa since 1920 and has had a direct presence 
since 1939. In 2006 we had offices in four African countries. IBM has 
increased its direct presence to 24 countries: South Africa, Nigeria, 
Mauritius, Ghana, Senegal, Kenya, Tanzania, Morocco, Egypt, Tunisia, 
Angola, Uganda, Zambia, DR Congo, Sierra Leone, Namibia, Seychelles, 
Algeria, Malawi, Gabon, Chad, Niger, Burkina Faso, and Madagascar.
    IBM launched its first African Research Laboratory in 2013 (12th 
globally) where researchers are focused on finding solutions to 
Africa's most pressing challenges across health care, education, water 
and sanitation, human mobility and agriculture. We're working closely 
with Africans to identify solutions that are relevant for Africa.
     information and communications technology (ict) opportunities
    It's important to remember that Information and Communications 
Technology (ICT) is a transformative core-enabler that benefits ALL 
sectors of the economy--from transportation to health care; energy to 
education; water to public safety; infrastructure to government, etc. 
There is ample cause for optimism that modern technologies and market-
based systems will help to provide the boost that African countries 
need to participate fully and successfully in the global community. Key 
opportunity areas include:

    Banking and Financial Services.--Nearly every bank in Africa now 
operates some form of online or mobile banking and with the right 
solutions, more than 60 percent of Africans could have access to 
banking services by 2025.

        Ghana's Fidelity Bank chose IBM to drive its transformation 
        agenda. IBM is helping bank the unbanked in the Democratic 
        Republic of Congo. Nedbank, based in South Africa, tapped into 
        IBM's Analytics to improve customer experience by leveraging 
        social insights.

    Telecommunications.--There were 650 million mobile subscribers in 
Africa as of 2012, more than Europe or the United States, with many 
quickly converting to become connected smartphone users.

        IBM's African expansion program was accelerated by a deal with 
        Bharti Airtel to create an integrated telecommunications 
        infrastructure throughout 17 countries in sub-Saharan Africa. 
        Surfline Communications in Ghana selected IBM's Cloud solutions 
        to expand its business across West Africa.

    Energy and Utilities.--Utilities companies are embarking on large-
scale upgrades of aging network infrastructure. From field, to finance, 
to call centers, IT systems will be integrated for smarter utility 
operations.

        IBM is providing automated systems offering real time status of 
        all business processes for Kenya Power.

    Healthcare.--$25-$30 billion is expected to be invested in Africa's 
Healthcare Infrastructure by the end of 2016. Building sustainable 
health care systems is one of Africa's greatest health challenges--in 
some areas, more than 50 percent of the population does not have access 
to health care.

        IBM is working with South Africa's Metropolitan Health to 
        launch the first commercial application of IBM's ``Watson'' 
        cognitive computing technology in Africa to provide 
        personalized patient care. The Zambian Government and IBM are 
        providing improved access to life saving drugs. Supported by 
        the World Bank, the Department for International Development, 
        UNICEF and London Business School, Zambia's Medical Stores 
        Limited (MSL) will deploy a new medical supply chain pilot 
        project using analytics and mobile technologies to better 
        manage medicine inventory and delivery.

    Government.--Significant investments are being made in e-government 
initiatives (e.g., citizen ids, personal security, and citizen 
engagement) and modernization of core systems such as taxation and 
Customs.

        South Africa's Gauteng Fire and Disaster Management Center, a 
        provincial public safety authority, has reduced emergency 
        response time from days to hours and gained a comprehensive 
        picture of disaster situations by using IBM's disaster 
        management solutions. IBM and UNICEF in Uganda on 
        U-report, a free SMS-based reporting tool that allows the 
        Ugandan youth to communicate with their government and 
        community leaders using their cell phones.

    Agriculture.--Africa has 60 percent of the world's uncultivated 
arable land, making it a huge potential food source.

        With ``Project Lucy,'' IBM researchers in Africa, together with 
        their business and academic partners, are using IBM's `Watson' 
        and related cognitive technologies to learn and discover 
        insights from Big Data to develop commercially viable solutions 
        to Africa's grand challenges in agriculture, as well as health 
        care, education, water and sanitation, and human mobility. Lucy 
        is the name given to the earliest known human descendant, whose 
        remains were discovered in Africa 400 years ago.

    Retail.--90 percent of commerce in Africa is at traditional, 
informal retailers while malls are limited to a handful of urban areas. 
Supply chain remains a challenge in Africa, but low rates of formal 
retail and increasing urbanization demonstrates room for growth.

        Kenya's Bidco, a manufacturer and marketer of consumer 
        products, selected an IBM IT solution and services to drive its 
        Africa growth strategy.

    Technology Sector and ICT Development.--Africa has a fast-growing 
information technology market, which according to the World Bank is 
expected to grow to $150 billion by 2016.
                building skills & capabilities in africa
    IBM is keenly focused on building the capacities of Africa's people 
and institutions--including knowledge, technology infrastructure, 
business sophistication, and governance. IBM has many ambitious 
initiatives that are collaborative across academia, government, and 
enterprise; and built into the fabric of the communities and 
organizations in which we do business. Having a talented and skilled 
workforce is essential for business because employees are a company's 
greatest asset.

   The administration's important program, the Young African 
        Leaders Initiative (YALI) Network was also part of the U.S.-
        Africa Leaders Summit. IBM is partnering with the U.S. 
        Government and working closely with Notre Dame and Yale, where 
        IBM Fellows are engaging YALI participants on topics ranging 
        from creativity and leadership, to business strategy, social 
        technologies, and financing.
   IBM has formed partnerships with several leading 
        University's across Africa in South Africa, Kenya, Mauritius, 
        Ghana, and Nigeria.
   IBM's Leadership Education and Development (LEAD) program 
        brings together MBA students from Africa with faculty and 
        students from leading U.S. universities and IBM executive 
        training.
   IBM runs programs in Africa that help nurture young talent:

        Accelerating Critical Expertise (ACE), a program designed 
            to accelerate expertise of critical job role pipeline so 
            future leaders are better prepared.
        Elevate, which is designed to accelerate the professional 
            growth of high-potential women by developing their 
            leadership skills through a customized and tailored 
            learning plan.
        Leadership Development Roadmap, which helps manager-
            identified junior talent grow their leadership skills 
            through different learning opportunities.

   IBM developed the Africa Technical Academy program across 
        Africa, which is open to academia, IT specialists and IBM 
        clients. It helps them identify technology solutions to 
        problems facing businesses and the public sector.
               ibm's corporate social programs in africa
    Corporate Social Responsibility remains a priority for IBM and 
we've undertaken a number of initiatives across Africa focused on 
education and skills development, technology solutions, and awarding 
Smarter Cities Challenge grants to help cities identify solutions to 
make cities ``smarter'' and more effective. One of IBM's unique 
programs is the IBM Corporate Service Corps (CSC) or a corporate 
version of the ``Peace Corps.'' Through the Corporate Service Corps 
(CSC), IBM blends social responsibility and business expertise to 
produce a triple benefit: pro bono problem solving for governments and 
communities, leadership development for IBM employees, and a greater 
understanding of new markets for IBM. By the end of 2015, IBM Corporate 
Service Corps will have dispatched approximately 2,800 IBM employees 
originating from over 60 countries on engagements to 38 countries. 
Africa is one of the focal points of the program and to date, the CSC 
has deployed approximately 800 IBM employees for projects in South 
Africa, Ethiopia, Angola, Senegal, Tanzania, Nigeria, Ghana, Kenya, 
Morocco, and Egypt.
                   ibm's efforts to help fight ebola
    IBM launched several initiatives to help curb the spread of Ebola 
in West Africa. They include a citizen engagement and analytics system 
in Sierra Leone that enables communities affected by Ebola to 
communicate their issues and concerns directly to the government; a 
donation of IBM Connections technology in Nigeria to strengthen the 
Lagos State government's preparedness for future disease outbreaks; and 
a global platform for sharing Ebola-related open data.
    The efforts combine expertise from IBM's global network of research 
labs with the company's years of experience in humanitarian disaster 
response by applying mobile technology, data analytics, and cloud 
computing to help governments and relief agencies as they seek to 
contain the deadly disease.
    The work benefits from contributions from a number of partners 
including Sierra Leone's Open Government Initiative, Cambridge 
University's Africa's Voices project, Airtel and Kenya's Echo Mobile.
                    u.s. government's critical role
    The U.S.-Africa Leaders Summit sent a strong message to the African 
Leaders of the importance of Africa to the U.S. and U.S. companies; but 
we need sustained focus and engagement in order to see real results. 
Africa is growing rapidly but doing business in Africa comes with a 
unique set of challenges. It's a continent of 54 countries; each with 
its own political, economic, and cultural dynamics--and its own pace of 
development. The U.S. Government can and should continue to play a role 
in helping open these markets.
           usg economic support--leveraging all of our tools
    We face strong competition across the continent from our foreign 
competitors whose governments are playing a very active role in 
providing financial support and strong advocacy to their businesses. 
The U.S. Government has a different set of tools that they bring to the 
table, including, EXIM, OPIC, USTDA, USAID, and the Millennium 
Challenge Corporation (MCC). Businesses, clients, and governments want 
and need certainty and predictability to grow their businesses; and 
these USG assets need to be reauthorized, funded, expanded, and updated 
to respond to the needs of today's global economy.
    The U.S. Government's focus on helping companies navigate the 
complexities of doing business in Africa has been invaluable. Budget 
constraints are a reality but companies of all sizes are benefitting 
from the advice, guidance, market insights, and help in connecting 
companies to potential partners and/or appropriate government 
officials. Moreover, increasingly, companies are looking for assistance 
to help resolve business issues and/or policy advocacy. As a result, we 
were very pleased about the Department of Commerce's announcement at 
the summit that they were opening new offices in Angola, Tanzania, 
Ethiopia, and Mozambique, while expanding operations in Ghana and 
reestablishing a position at the Africa Development Bank.
             east africa community (eac) trade facilitation
    One of the key initiatives resulting from the U.S.-Africa Leaders 
Summit is the trade facilitation effort underway with the East African 
Community, i.e., Kenya, Tanzania, Rwanda, Uganda, and Burundi. The U.S. 
and EAC business communities are very engaged and supportive of this 
effort to remove barriers to trade and more fully integrate the region. 
Success with the EAC could lead to other regional initiatives that 
would eliminate barriers and harmonize processes among African nations, 
ultimately making it easier for U.S. companies to do business. Last 
month, the U.S. Department of Commerce hosted a U.S.-East Africa 
Community Trade Ministerial with the EAC Trade Ministers. IBM was one 
of the three U.S. companies representing the business community during 
the U.S.-EAC Commercial Dialogue Roundtable where we discussed areas of 
needed focus and next steps. Progress is being made in some areas such 
as Customs and agreement was reached to expand the focus to include 
``Digital Trade'' facilitation, among others.
                     policy engagement and advocacy
    We need your help.
    As Africa is becoming more fully integrated into the global 
economy, governments are wrestling with many of the same policy issues 
as other governments around the world. How to attract investment? How 
to grow domestic industry and increase exports in order to be globally 
competitive? How to improve the skills and talent of the local 
workforce? What are the right policies for dealing with issues such as 
privacy and cyber security?
    Governments are looking for models to follow but we are concerned 
about a growing trend toward embracing protectionist models, 
particularly in the area of forced localization or local content 
requirements. In essence, supporting local industries by discriminating 
against foreign companies. These policies come in a variety of flavors: 
from requiring local ownership and management of operations, local 
employment requirements, mandated technology transfer, local 
manufacturing and production of inputs and materials--AND restrictions 
on movement of data across borders. Forced localization policies are 
not unique to Africa but we are seeing a growing trend in countries 
like Nigeria, South Africa, Kenya, and most recently in Ghana.
          digital trade or cross-border data flow restrictions
    The global economy cannot function without constant streams of data 
or information moving across borders. Data is a vital source of 
innovation and competitive advantage and restrictions can have a 
negative impact on companies of every size. The Internet facilitates 
exports of goods and services and enables companies, including small- 
and medium-sized enterprises (SMEs) to have access to global supply 
chains, innovative services at competitive prices and participate in 
the global economy. Moreover, a wide range of services, including 
education, financial, business, news, and health, are increasingly 
being delivered via the Internet, leading to a growth in ``Digital 
Trade.'' Requirements for in-country processing and storage of data or 
placing onerous restrictions on transfers of data out of the country 
are impediments to doing business.
    The U.S. Government has begun to engage on this issue but increased 
focus and attention is needed lest these protectionist policies spread. 
The goal of growing domestic industries is valid but forced 
localization is the wrong approach that could ultimately discourage 
foreign investment, which is also key to economic growth.
                               conclusion
    In summary, the U.S.-Africa Leaders Summit provided a valuable and 
critical opportunity to reinforce the importance of Africa to the U.S. 
Government and U.S. companies. There are tremendous potential market 
opportunities but much progress still needs to be made to improve the 
ease of doing in a challenging environment. Capitalizing on the 
momentum created by the summit will require a sustained effort and 
focus, which makes this hearing both timely and important.
    In order for U.S. companies to remain competitive, we need the 
active support and engagement of the U.S. Government; leveraging all of 
the tools and assets they bring to the table and working to find new 
ways of providing assistance.
    Market opening initiatives such as the trade facilitation focus of 
the U.S.-EAC Cooperation Agreement can greatly improve the ease of 
doing business. The realization of a common market that enables cross-
border trade and implements a common set of regulations, procedures, 
and documentation requirements will create a more transparent and 
predictable environment--that ultimately will attract more investment.
    Finally, as these markets are maturing an increased focus and 
engagement on policy-related advocacy is essential. Forced localization 
is on the rise around the world and is spreading to the African 
Continent. In particular, we need to encourage governments to embrace 
policies that facilitate Digital Trade or cross-border data flows 
across the Internet and reject ``digital protectionism.'' Data 
localization requirements could ultimately discourage investment and 
job creation, stifle innovation and make the local economies less 
competitive--which is the opposite of the goal.
    Thank you again for this opportunity to share IBM's views.

    Senator Flake. Thank you, Ms. Tuttle.
    Mr. Bollyky.

   STATEMENT OF THOMAS J. BOLLYKY, SENIOR FELLOW FOR GLOBAL 
              HEALTH, ECONOMICS, AND DEVELOPMENT, 
          COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC

    Mr. Bollyky. Chairman Flake, Ranking Member Markey, 
Senators Isakson and Coons, I am grateful for the opportunity 
to testify today about health and private-sector investment in 
sub-Saharan Africa. It is an honor to be here.
    I am going to make three fundamental points: improvements 
in health in sub-Saharan Africa have been crucial for improved 
economic performance and investment; second, that there are 
recent developments that show that those improvements are at 
risk; and third, that U.S. leadership and contributions from 
the private sector can do something to address this unfinished 
health agenda in sub-Saharan Africa.
    Over the last decade, U.S. support for better health in 
sub-Saharan Africa has been strong, it has been bipartisan, and 
it has been cost-effective. The United States is the leading 
funder of global health worldwide. That funding has accounted 
for just two-tenths of U.S. spending, but the returns on that 
investment in sub-Saharan Africa have been spectacular.
    Since the rollout of the PEPFAR program, death and 
disability from HIV has dropped 17 percent in sub-Saharan 
Africa. With more support for childhood immunization and 
maternal and newborn care, infant mortality is down nearly 20 
percent in the region over the same period. That means 700,000 
children who would have not otherwise reached their fifth 
birthday are now doing so. That is a tremendous achievement.
    Premature death and disability from malaria, TB, and other 
communicable diseases have also declined.
    But the health gains in sub-Saharan Africa are not just 
humanitarian. A decade ago, Coca-Cola reported routinely hiring 
two workers for every job opening in sub-Saharan Africa due to 
the likelihood that one of them would become terminally ill. 
Now a healthier, more stable labor force is spurring economic 
growth and investment in the region. A recent Lancet Commission 
led by former U.S. Treasury Secretary Larry Summers concluded 
life expectancy gains in sub-Saharan Africa have fueled a 
nearly 6-percent annual increase in full income between 2000 
and 2011. That is the fastest rate of growth in the world on 
that metric, and that is one reason why U.S. private-sector 
investments in sub-Saharan Africa over the last decade have 
been so profitable.
    Wealthier sub-Saharan African countries are less aid 
dependent, they are more stable, and they are better trade and 
strategic partners for the United States. It is based on that 
potential that the White House was motivated to hold the first 
U.S.-Africa Summit last year.
    In recent months, however, developments have shown that 
these health gains are fragile. I will point to two examples. 
First and, of course, most notably is the Ebola outbreak in 
West Africa. Prior to the current outbreak, Ebola had killed 
fewer than 2,000 people in 28 separate outbreaks, all in 
central Africa, over the 40-year period since the virus was 
identified in 1976, almost a 40-year period. The current Ebola 
outbreak has killed five times that number, with enough cases 
spreading internationally to dominate nightly news and to 
affect the recent U.S. elections.
    What is the difference? With greater trade and travel to, 
and within, the region, emerging infectious diseases like Ebola 
are less likely to burn out in rural villages and more likely 
to reach crowded cities with limited health systems. Sub-
Saharan Africa has the fastest rate of urbanization in the 
world, but it is mostly in small- and medium-sized cities with 
little public infrastructure.
    Ebola is not likely to be the last outbreak in the region, 
and it has proven expensive already in this particular 
outbreak. Sierra Leone, Liberia, and Guinea will lose $1.6 
billion in economic output in 2015 alone according to the World 
Bank, which is more than 12 percent of their combined GDP. 
There are additional costs regionally, as well.
    A second example of the health challenges in the region is 
the stunningly fast increase of heart disease, cancer, and 
other noncommunicable diseases. A new Council on Foreign 
Relations task force, cochaired by former Indiana Governor 
Mitch Daniels and former U.S. National Security Advisor Tom 
Donilon, found that NCDs are increasing much faster in much 
younger people with far worse outcomes in sub-Saharan Africa 
than we have ever seen before.
    How fast? Death and disability from NCDs increased 33 
percent since 2000 in sub-Saharan Africa, which is more than 
200 percent faster than the rate of decline of infectious 
diseases in that region. These chronic diseases now cause as 
much death and disability as HIV, malaria, and maternal 
disorders combined in sub-Saharan Africa. Eighty percent of 
that burden arises in populations 59 and younger.
    The rate of the increase of these diseases is not driven by 
success. The major drivers of NCDs are the same as the Ebola 
outbreak. They are limited health systems, persistent poverty, 
and risk fueled by urbanization and changes in trade, mostly 
producing pollution, inadequate nutrition, and increased 
tobacco use.
    The good news is that progress on the unfinished health 
agenda in sub-Saharan Africa is possible. There is a critical 
need for more investment in public health systems in the 
region, especially primary care, laboratories, surveillance 
systems, and critical care facilities. The recent resources 
that Congress has put forward as part of the Global Health 
Security Agenda help provide an excellent start.
    Despite unhealthier habits, premature death and disability 
from noncommunicable diseases have declined dramatically in the 
United States and other high-income countries. Many of the 
tools and policies that have fueled that decline are cheap, 
they are effective, but not widely implemented in sub-Saharan 
Africa. They could be with well-established global health 
strategies and platforms, and I refer you to the task force 
report for those strategies.
    Finally, the private sector has an important role to play 
here. The private sector is best suited to invent and adapt 
technologies for diagnosis, prevention, treatment of both 
emerging infectious diseases and these non-communicable 
diseases in low-infrastructure settings. It also has natural 
concerns and opportunities for improving the health and 
productivity of their workforces and the size and purchasing 
power of their consumer base. These concerns played a large 
role in the international response to HIV.
    In conclusion, U.S. and private-sector leadership on health 
in Africa is important now, as it has been in the past, and for 
the same reasons. Inclusive economies and investment presuppose 
healthier and more productive lives.
    Thank you very much for your time.
    [The prepared statement of Mr. Bollyky follows:]

                Prepared Statement of Thomas J. Bollyky

    Chairman Flake, Ranking Member Markey, and other distinguished 
members of the subcommittee: I am grateful for this opportunity to 
testify about global health in sub-Saharan Africa, the progress and 
setbacks that have occurred in this sector since last year's African 
Leaders summit, and their implications for private sector-led growth in 
the region.
    Better health has improved the climate for private investment in 
sub-Saharan Africa, but developments since the African Leaders summit 
have revealed the fragility of those gains. The prospects for more 
private sector-led growth in sub-Saharan Africa depend on continued 
U.S. leadership on global health, especially on emerging infectious 
diseases, like Ebola, and to address the stunningly fast rise of 
cancer, diabetes, and cardiovascular and other noncommunicable diseases 
(NCDs) in the region.
           u.s. role in improved health in sub-saharan africa
    U.S. leadership has played a significant role in improved health in 
sub-Saharan Africa. A dozen years ago, an HIV/AIDS epidemic that first 
hit wealthy countries spread the quickest in sub-Saharan Africa, 
causing large numbers of premature adult deaths and shaking 
governments. The United States responded. The U.S. President's 
Emergency Plan for AIDS Relief (PEPFAR) and U.S. support for The Global 
Fund to Fight AIDS, Tuberculosis, and Malaria delivered lifesaving 
antiretroviral treatments to millions in the region. The United States 
expanded its health investments in sub-Saharan Africa in other areas as 
well, from childhood immunization to nutrition to maternal health. 
Those investments helped inspire a surge of attention and resources for 
health in the region from other donors, the private sector, and local 
governments.
    Over the past decade, U.S. support for better health in sub-Saharan 
Africa has been sustained, bipartisan, and cost-effective. The United 
States is the leading contributor of global health aid, which accounted 
for just 0.23 percent of U.S. spending in 2013. The returns on that 
investment in sub-Saharan Africa, however, have been remarkable.
    Since the rollout of the PEPFAR program in 2004, premature death 
and disability from HIV/AIDS in sub-Saharan Africa have dropped 17 
percent.\1\ Infant mortality is down nearly 20 percent in the region 
since 2000, which has meant 700,000 more children now survive their 
fifth birthday.\2\ Premature death and disability from malaria and 
tuberculosis in sub-Saharan Africa have declined 23 percent and 13 
percent, respectively.
    The gains from improved health in sub-Saharan Africa have not only 
been humanitarian, however. A decade ago, Coca-Cola reported routinely 
hiring two workers for every job opening in sub-Saharan Africa due to 
the likelihood that one worker might become terminally ill.\3\ South 
African mining companies reported HIV and TB infection rates among 
their workers that were some of the highest in the world.
    A more stable, healthier labor force and an increase in working-age 
adults due to lower child mortality have spurred economic growth and 
private investment in sub-Saharan Africa. A recent Lancet commission, 
led by former U.S. Treasury Secretary, Larry Summers, and the health 
economist, Dean Jamison, concluded improvements in life expectancy in 
sub-Saharan Africa between 2000 and 2011 contributed to a nearly 6 
percent annual increase in full income, the sum of national income plus 
the value of the change in mortality (Figure 1). U.S. private-sector 
investments in sub-Saharan Africa over the past decade have yielded 
among the highest rates of return of any region in the world.\4\



    The benefits of continued private investment and economic growth in 
sub-Saharan Africa would accrue to the United States as well. Wealthier 
sub-Saharan African countries are less U.S.-aid dependent, more stable, 
and better trade and strategic partners. As personal incomes grow, many 
of these countries' demand for exports will rise and begin to shift to 
the categories in which the United States leads the world: civilian 
aircraft, pharmaceuticals, machinery and equipment, high-value foods, 
and entertainment.
    The improved economic and strategic prospects in the region 
encouraged the White House to hold the first ever U.S.-Africa summit in 
August 2014. The summit offered the opportunity not only to expand on 
health gains, but also encourage more private investment in energy and 
infrastructure and forge closer diplomatic ties.
    The health initiatives announced at the Leaders summit included: a 
PEPFAR and Children's Investment Fund Foundation partnership to prevent 
mother to child transmission of HIV; a U.S.-African private sector 
initiative on food security and nutrition; and a PEPFAR/Pink Ribbon Red 
Ribbon initiative on cervical cancer screening in Ethiopia and Namibia, 
supported by General Electric, GlaxoSmithKline, and others.
         health in sub-saharan africa since the leaders summit
    In months after the summit, it has become clear that new health 
challenges are emerging in sub-Saharan Africa. The region has one of 
the fastest rates of urbanization in the world. Most of that growth is 
in small- and medium-sized cities with limited public health 
infrastructure.\6\ Inter- and intra-country trade in the region is 
increasing, but its oversight lags behind. Many sub-Saharan countries 
lack the basic consumer protections and public health rules that have 
been in place in most high-income countries for decades.
    Life expectancies have improved in sub-Saharan Africa, but without 
the same gains in personal income and health systems that accompanied 
longevity in wealthier countries. The median GDP per capita in OECD 
countries was $4,376 when they achieved a median life expectancy of 60 
years in 1947. Sub-Saharan African nations just reached that life 
expectancy in 2011 and their median GDP per capita was $1,658.\7\ The 
health systems in most sub-Saharan African countries are still built 
for acute care, not chronic or preventative care. Health spending has 
increased in recent years, but remains low relative to high-income 
countries.\8\ All the governments in sub-Saharan Africa together spend 
roughly as much on health annually ($33 billion) as the Government of 
Poland ($31 billion).\9\
    Two developments in the months since the African Leaders Summit 
demonstrate the health consequences of these trends and the fragility 
of the recent gains in sub-Saharan Africa.
    The most high profile example is the Ebola outbreak in West Africa, 
which began before the African Leaders summit, but accelerated 
thereafter. Prior to the current epidemic, Ebola had killed fewer than 
2,000 people in 28 outbreaks since the virus was first identified in 
1976, all in Central Africa. Ebola has killed nearly five times that 
number in the last 14 months, with enough cases spreading 
internationally to dominate nightly news broadcasts and affect recent 
U.S. elections. The difference? With greater trade and travel to, and 
within the region, emerging infectious diseases like Ebola are less 
likely to burn out in rural villages and more likely to reach the 
crowded cities with limited health systems that are the ideal 
incubators for outbreaks. The Ebola outbreak may be just a preview of 
pandemics to come in sub-Saharan Africa.
    Through the combined efforts of the local and international 
responders, the Centers for Disease Control and Prevention and other 
U.S. agencies, donors, and intergovernmental institutions, new Ebola 
cases appear finally to be dwindling. The economic cost, however, 
remains. The most recent World Bank estimates are that Sierra Leone, 
Liberia, and Guinea will lose $1.6 billion in economic output in 2015 
alone, more than 12 percent of their combined GDP. The Ebola outbreak's 
projected 2015 economic costs in other sub-Saharan African countries is 
just over half a billion dollars, to be experienced mostly in West 
Africa.\10\
    A second example of changing global health needs is the stunningly 
fast increase of heart disease, cancers, and other NCDs in sub-Saharan 
Africa. Once thought to be challenges for affluent countries alone, 
these diseases have quickly become a leading health concern in sub-
Saharan Africa, causing as much death and disability in the region as 
HIV/AIDS, malaria, and maternal disorders combined.
    A new Council on Foreign Relations (CFR)-sponsored Independent Task 
Force report, cochaired by former Indiana Governor Mitch Daniels and 
former U.S. National Security Advisor Tom Donilon, found that NCDs are 
increasing in sub-Saharan Africa faster, in younger people, and with 
worse outcomes than in wealthier countries.\11\ Citing data from the 
Institute for Health Metrics and Evaluation's groundbreaking Global 
Burden of Disease project, the Task Force showed that NCD death and 
disability increased 33 percent between 2000 and 2013, more than 200 
percent faster than the decline of infectious diseases in the region, 
The increase of death and disability of breast cancer and diabetes in 
the region exceeded 80 percent over the last two decades. More than 80 
percent of the NCD burden in sub-Saharan Africa arises in people 59 
years of age or younger.
    Rates of the most unhealthy behaviors associated with NCDs remain 
low in sub-Saharan Africa. U.S. adult obesity is more than four times 
higher than it is in sub-Saharan Africa.\12\ The major drivers of these 
diseases in this region are the same as in the Ebola outbreak: limited 
health systems, persistent poverty, and risks fueled by urbanization 
and changes in trade. Inhabitants of densely packed urban areas often 
face pollution outdoors and the burning of fuels indoors, are more 
likely to buy tobacco products, and less likely to have access to 
adequate nutrition. With little access to preventative care and more 
exposure to these health risks, working-age people in sub-Saharan 
Africa are more likely to develop an NCD. Without access to chronic 
care and limited household resources to pay for medical treatment, 
these people are more likely to become disabled and die young as a 
result.
    The Task Force found that, unless urgent action is taken on NCDs, 
the economic consequences in sub-Saharan Africa will be significant. 
Most NCDs are chronic, as is the case with HIV/AIDS. As more patients 
get sick from NCDs, suffer longer, require more medical care, and die 
young, the results reverberate. At the household level, it means less 
income and catastrophic health expenditures. At the national level, it 
means lower productivity and competitiveness, and a potential missed 
opportunity to capitalize on the demographic dividend that lifted the 
fortunes of many higher income countries. At the global level, the 
World Economic Forum projects that the NCD epidemic will inflict $21.4 
trillion in losses in developing countries over the next two decades--a 
cost nearly equal to the total aggregate economic output ($24.4 
trillion) of these countries in 2013. These economic costs will 
undercut potential U.S. trade partners and allies and undermine 
existing U.S. and private sector investments in sub-Saharan Africa.
           the unfinished health agenda in sub-saharan africa
    Progress on the unfinished health agenda in sub-Saharan Africa is 
possible. The Global Health Security Agenda and the recent resources 
that Congress has devoted to it provide an excellent start.
    There is a critical need to invest in basic public health systems 
in the region, especially primary health care facilities, laboratories, 
surveillance systems, and critical care facilities. The use of these 
systems should not be limited to disease-specific goals, but be 
responsive to local needs. The public health surveillance and response 
must be used regularly for routine matters in order to be efficiently 
scaled in the extraordinary circumstances of an outbreak.
    Strengthening health care systems improves our ability to deal with 
emerging infectious diseases, but also provides a platform for the 
preventative and chronic care desperately needed for NCDs. Without 
better functioning health systems, it will be very hard for sub-Saharan 
Africa to end the cycle of disease and poverty and promote private 
sector-led growth.
    Despite much higher rates of obesity and physical inactivity, 
premature death and disability from NCDs has declined dramatically in 
the United States and other high income countries. The reason? Mostly 
cheap and effective prevention, management, and treatment tools and 
policies that are not widely implemented in sub-Saharan Africa, but 
could be with well-established global health strategies. These include 
low-cost drugs to reduce heart attacks, vaccines to prevent cervical 
cancer, and providing countries with the opportunity to implement the 
same tobacco taxes and advertising rules that dramatically cut smoking 
rates in the United States. Pilot programs can and have integrated 
these tools and policies into donor-funded programs on HIV/AIDS and 
other public health system platforms in the region.
    The private sector has a twofold role on unfinished health agenda 
in sub-Saharan Africa. First, the private sector is best suited to 
invent and adapt technologies for diagnosis, prevention, and treatment 
of emerging infectious diseases and NCDs in low-infrastructure 
settings. Second, companies have natural concerns for maintaining the 
health and productivity of their workforces and the size and purchasing 
power of their customer base. Large employers were essential to rally 
global support for addressing HIV/AIDS in the region. They are also at 
the forefront of designing and implementing innovative health promotion 
programs for their employees that emphasize exercise, preventative 
care, better diets, and reduced smoking.
    The hard work and generosity of the United States, the private 
sector, and other donors have helped reduce the plagues, parasites, and 
blights that have long undercut economic opportunity and investment in 
sub-Saharan Africa. Extending those initiatives to NCDs and emerging 
infectious diseases would lessen their worst effects and provide 
national governments with the time and technical assistance needed to 
tackle these new threats sustainably on their own. Continued U.S. and 
private sector leadership on the unfinished health agenda in Africa is 
as important now as it has been in the past and for the same reasons: a 
peaceful, inclusive economy presupposes healthier, more productive 
lives.

----------------
End Notes

    \1\ Murray, Christopher JL, Katrina F. Ortblad, Caterina Guinovart, 
Stephen S. Lim, Timothy M. Wolock, D. Allen Roberts, Emily A. Dansereau 
et al. ``Global, regional, and national incidence and mortality for 
HIV, tuberculosis, and malaria during 1990-2013: a systematic analysis 
for the Global Burden of Disease Study 2013.'' The Lancet 384, no. 9947 
(2014): 1005-1070.
    \2\ Wang, Haidong, Chelsea A. Liddell, Matthew M. Coates, Meghan D. 
Mooney, Carly E. Levitz, Austin E. Schumacher, Henry Apfel et al. 
``Global, regional, and national levels of neonatal, infant, and under-
5 mortality during 1990-2013: a systematic analysis for the Global 
Burden of Disease Study 2013.'' The Lancet 384, no. 9947 (2014): 957-
979.
    \3\ Krisi Heim, ``Corporations Invest in Global Health,'' Seattle 
Times, November 11, 2010.
    \4\ Sveinung Fjose, Leo A. Grunfeld, and Chris Green, ``SMEs and 
growth in Sub-Saharan Africa,'' MENON Business Economics, June 2010.
    \5\ Adapted from Dean T. Jamison, Lawrence H. Summers, George 
Alleyne, Kenneth J. Arrow, Seth Berkley, Agnes Bingawaho, Flavia 
Bustreo, et al., ``Global health 2035: a world converging within a 
generation,'' The Lancet 382 (2013): 1898-955, doi:10.1016/S0140-
6736(13)62105-4.
    \6\ Julie E. Fischer and Rebecca Katz, ``The International Flow of 
Risk: The Governance of Health in an Urbanizing World,'' Global Health 
Governance 4 (2011); Campbell et al., ``Emerging Disease Burdens,'' 
i59.
    \7\ Council on Foreign Relations, Noncommunicable Disease 
Interactive, available at http://www.cfr.org/diseases-noncommunicable/
NCDs-interactive/p33802.
    \8\ Institute for Health Metrics and Evaluation, ``Financing Global 
Health 2013: Transition in an Age of Austerity,'' Institute for Health 
Metrics and Evaluation, 2014, 61-62.
    \9\ OECD Health Stats: Public Health Expenditure since 2000, via 
Organization for Economic Co-operation and Development.
    \10\ World Bank, The Economic Impact of Ebola on Sub-Saharan 
Africa: Updated Estimates for 2015 (Jan. 20, 2015).
    \11\ Thomas J. Bollyky, Mitchell E. Daniels, and Thomas E. Donilon. 
The emerging global health crisis: noncommunicable diseases in low- and 
middle-income countries. New York, NY: Council on Foreign Relations, 
2014. Print.
    \12\ Ng, Marie, Tom Fleming, Margaret Robinson, Blake Thomson, 
Nicholas Graetz, Christopher Margono, Erin C. Mullany et al. ``Global, 
regional, and national prevalence of overweight and obesity in children 
and adults during 1980-2013: a systematic analysis for the Global 
Burden of Disease Study 2013.'' The Lancet 384, no. 9945 (2014): 766-
781.

    Senator Flake. Thank you, Mr. Bollyky.
    I thank all of you for your testimony, and we will start a 
round of questions, Mr. Leo first.
    You mentioned in your testimony that OPIC needs some 
serious reforms, and one of the problems that constrains its 
activity, according to your testimony, is that we have the 
carbon emissions cap. You say that has effectively pushed the 
agency out of all natural gas projects in the world's poorest 
countries.
    I met with OPIC officials a few days ago in my office. They 
claim that the regulations that they have and the carbon cap 
that has been dealt with in appropriations bills here is not a 
constraint on their activities. Can you tell me how it is and 
what we ought to do in Congress to remedy that?
    Mr. Leo. Thank you. It is an excellent question. I think it 
is a question that has a lot of strategic importance as well.
    I think one of the central issues on the impact of the 
carbon cap is around predictability. If we look at power 
projects anywhere in the world, but particularly in Africa that 
have a development life-cycle of several years--3, 5, 7 years, 
depending on the country, depending on the context--the 
approaches that U.S. investors or private companies will take 
will be impacted upon predictability.
    So I think what we have found in the last several years, 
particularly since the cap was put in place, is that companies 
stopped going to seek support from the Overseas Private 
Investment Corporation because they were not sure if it was 
going to be in a position to help, and particularly now where 
you have a cap that is dealt with on a year-by-year basis, that 
is still a high-risk venture for many companies. If they think 
about getting far into the stage, having a significant 
percentage of their project capital evaporate in the middle of 
a deal, it could be catastrophic when they have already had 
legal expenses and a number of other things that have gone in. 
So I think predictability and certainty is a very big issue.
    Now, having said that, since the cap was temporarily 
lifted, my impression talking with a range of different power 
developers, and there are not that many of them that are 
engaged that are American, they have increasingly gone to OPIC 
seeking support and help of a varied nature, whether it is 
insurance or investment or loans, et cetera. I have been told 
that the list of projects that OPIC is currently looking at 
that are of a natural gas nature is actually quite long.
    Some of these are very large, like a couple of projects in 
Nigeria. Some of the Ghana projects were brought up earlier. 
The scale, if the carbon cap was reintroduced, would absolutely 
blow what OPIC is able to do in a single project. I mean, 
basically, historically, they have been able to do one medium-
sized gas-fired plant globally per year, and the scale of the 
need, the scale of the demand just far, far, far exceeds that.
    Senator Flake. Thank you.
    Mr. Renigar, you talked about in Africa, obviously with the 
telecommunications, many countries have been able to leap frog 
some of the technology, and some of that is possible in the 
energy sector. But you mentioned in your testimony that there 
are constraints there, that that only goes so far. Do you want 
to elaborate a little on that? What benefit is there to 
renewables, but where are the limits as well?
    Mr. Renigar. Absolutely. Thank you, Senator. We agree that 
renewables do have a role to play in sub-Saharan Africa, as 
well as distributed power solutions. The reality is, though, 
when you have a continent that is surrounded by 400 trillion 
cubic feet of gas, that gas ought to be deployed because gas, 
in fact, is a clean fuel. That gas can displace diesel and 
other dirtier fuels. And also gas, because it can be brought on 
relatively quickly with these gas-to-power projects, has the 
ability to address the energy access issues relatively quickly.
    You also need base load power. Wind, solar, distributed 
power, biomass, all of these are technologies that can and 
should be deployed. What we see is a portfolio of technologies 
to address the massive need for more energy in sub-Saharan 
Africa.
    But given the resources that they have, given the needs for 
base load power to create stability on the grid, because the 
wind does not always blow, the sun does not always shine, there 
is not always biomass nearby. Also, the challenge of having the 
fuel source and the power within proximity to where the need 
is, is another challenge that has to be managed.
    So gas will always play a significant role in sub-Saharan 
Africa for the foreseeable future, and it has to be the central 
point of departure for addressing the need and then use the 
other technologies where they are needed to do it for smaller 
scale or for smaller needs or for individual industrial 
applications.
    Senator Flake. Thank you.
    Ms. Tuttle, you spent a lot of time in your testimony 
talking about the growing trend of protectionism. You mentioned 
the need for us to address it here, or government to 
government. What is the private sector doing in that regard, or 
how are you trying--what is IBM doing and other companies? Are 
you trying to remedy these situations on your own, and is there 
not a need for us to step in at this point? Is it getting that 
bad?
    Ms. Tuttle. Yes. Thank you, Senator. IBM and members of the 
business community have been working hard to highlight these 
issues. As I said in my testimony, forced localization is not 
an issue that is unique to Africa. These protectionist policies 
are on the rise all around the world including in countries 
such as China, India, Brazil, Argentina and Vietnam. And these 
bad policies are spreading to the African continent as the 
governments look to replicate what other developing countries 
are doing.
    U.S. companies, we have been talking to Congress about this 
issue for several years. We have also been reaching out to the 
administration, including the President and USTR encouraging 
them to include language in trade agreements to try to address 
this concern.
    The 2014 Trade Promotion Authority legislation also 
included excellent language to guard against some of the 
protectionist policies that we are seeing, and we are looking 
to have that language included in the spring version of the 
bill that is coming up.
    We are doing a whole host of things. Locally, we are 
engaging with the governments on a one-on-one basis and as a 
community, to raise concerns as both local companies and 
foreign investors. We've continued to point out that if these 
policies spread, their own companies will encounter barriers 
and will not be able to export their products and services to 
other markets.
    We are encouraging them strongly to look at other options, 
and that is where, again, the U.S. Government can help. Often 
it takes a three-pronged approach to resolve issues, i.e., 
carrot, stick, and a win-win scenario. We have an opportunity 
with the positive U.S.-Africa engagement established by the 
summit to try to focus more on the win-win, use less of the 
stick, and obviously identify possible incentives.
    But a more concerted and focused effort is needed. Nigeria 
is the largest economy on the African continent, and they have 
a very aggressive--frankly, the worst we've seen--local content 
policy impacting ICT. The danger is that if these policies 
succeed in Nigeria, it could spread quickly across the 
continent. Our concerns are real.
    We see an opportunity for the U.S. Government to lean 
forward and to get more engaged and to help resolve the issue.
    Senator Flake. Thank you.
    Mr. Markey.
    Senator Markey. Thank you, Mr. Chairman.
    Mr. Bollyky, your report is quite startling, that heart 
disease and cancer is now the global health crisis in Africa, 
surpassing HIV, malaria, maternal disorders combined. That is 
where the death rate is. That is what is causing a lot of 
problems in the country, on the continent.
    So what can the United States do in partnering with the 
private sector in order to deal with this issue, to play a 
larger role to help Africa with this issue?
    Mr. Bollyky. Thank you, Ranking Member, for the great 
question. The long-term solution to chronic diseases in sub-
Saharan Africa is the same as it is here in the United States. 
It is functional health systems. It is more sensible 
agricultural policies. It is better urban design.
    But the fact that sub-Saharan African countries have this 
long-term task ahead of them on NCDs in doing what we have 
largely done or have started to do over decades should not 
distort from the fact that there is much that can be done on 
NCDs in these countries in the short term. Nobody waited for 
functional health systems to intervene on HIV in sub-Saharan 
Africa. If there were shovel-ready health interventions that 
could be pursued now, we pursued them where they could save 
people's lives.
    The CFR task force report suggested three areas where we 
have made tremendous progress, and that could be extended to 
sub-Saharan African countries for cheap. The first basket, 
again, are the shovel-ready interventions. Here I would put in 
low-cost care for hypertension, cardiovascular disease, and 
tobacco control. Cardiovascular disease, premature deaths from 
cardiovascular disease in the United States have dropped over 
40 percent in the last 20 years. It is mostly products, generic 
drugs, beta blockers, statins that could easily be extended in 
poorer countries using existing platforms.
    Vaccinations for cervical cancer and hepatitis B, which 
causes liver cancer, something again that can be done 
internationally through existing delivery platforms at a 
reasonable cost.
    Tobacco control. Every state in the United States has 
tobacco taxes and restrictions on tobacco advertising. This is 
largely not the case in sub-Saharan Africa, and there are 
indications that these countries are increasingly being 
targeted for expanding the market in that setting.
    The second basket of interventions--and this is 
particularly a role for the private sector--is adapting 
existing technologies that have made good progress on cancers 
in high-income settings but have not been extended to lower-
income settings. Breast cancer has increased over 100 percent 
in the last two decades in sub-Saharan Africa. Biopsies and 
mammography tools are largely unavailable in many of these 
countries and not usable in low-resource settings but that 
could be changed with U.S. support.
    Diabetes treatment falls in this second category as well.
    The third area that was put forward in the task force 
report is there is a real opportunity for the United States and 
low- and middle-income countries in sub-Saharan Africa to learn 
from one another on addressing this NCD challenge moving 
forward. We are certainly not perfect. We have much higher 
rates for risk factors for NCDs than these countries do. The 
obesity rate in the United States is four times higher than it 
is in sub-Saharan Africa.
    Better approaches on population-based prevention and lower-
cost chronic care can really do a great deal of good in both 
settings, and it is an opportunity to work together.
    Senator Markey. Okay, thank you so much.
    Mr. Renigar, can you talk a little bit about corruption in 
the energy sector in sub-Saharan Africa and what your view is 
with regard to whether or not actions taken against it are 
improving or worsening?
    Mr. Renigar. Thank you, Senator. It is a very good 
question, and I think when we are talking about doing business 
in Africa, this is one of the central points that has to be 
addressed, particularly for American companies going into sub-
Saharan Africa.
    Senator Markey. In the energy sector in particular.
    Mr. Renigar. Yes, in the energy sector in particular. Our 
experience has been relatively good in this area because we 
have the ability to do what I would call more of a top-down 
approach. So a lot of the projects that we are involved in, we 
put them in the context of broader GE engagement in the 
particular country.
    So Nigeria, for example, which is one of the countries that 
people tend to talk about most, we have put in place what we 
call a company-to-country agreement or MOU between GE and the 
government of Nigeria where we lay out our strategic priorities 
across a number of areas. Energy, of course, is one of them. We 
use this as a mechanism to consult regularly with the President 
and his ministers on our key projects.
    Senator Markey. So do you tie your investment strategy to 
saying you do not want to be involved in activities that have 
corruption? Is that the understanding that you have as GE goes 
into a country?
    Mr. Renigar. Absolutely, and we use the flexibility and 
availability of our dialogues with their ministers and their 
leadership to always drive home that we are there to do 
business and to do it in the right way, and it gives us the 
mechanism to bring up any issues that come up.
    I think what happens is the bureaucracy at lower down 
levels know that when they are dealing with an American company 
that regularly talks with the government, they cannot make 
those kinds of requests.
    What I would add, Senator, is that I think one of the ways 
that we can best get at this corruption is to use the tools of 
better government procurement policy, better customs policy, 
better trade facilitation, because a lot of the corruption----
    Senator Markey. So let me just go to that. So with regard 
to Power Africa, for example, how can we use that to leverage 
U.S. investment in the energy sector as a way of extracting 
anticorruption protections built around those programs? How can 
we do that?
    Mr. Renigar. Well, I think there are a number of things 
that we do. First, when you are doing a Power Africa project, 
you will also often be getting advocacy from the Commerce 
Department. The Commerce Department has an anticorruption 
clause in their advocacy work that you and all of the people on 
the project have to certify that there is no corruption in the 
project. So that gives you the certification and the hook.
    The other thing that Power Africa is doing is putting 
advisors embedded in the ministries who can help the 
bureaucracy work through projects, doing it the right way.
    The final point is once you shine the bright light of Power 
Africa or the bright light of a U.S. company or a U.S. 
Government interest on a project, it sanitizes it to a certain 
extent.
    Senator Markey. And I think that is very important because 
that gives us a reach into these countries, into the 
governments who would want an expanded role for the U.S. 
Government in this investment sector. So the more we do it, the 
more leverage we have in rooting out the corruption or putting 
in place a regime that reduces corruption in the energy sector 
in that country. Is that what you are saying?
    Mr. Renigar. Absolutely.
    Senator Markey. Okay, thank you.
    Thank you, Mr. Chairman.
    Senator Flake. Senator Isakson.
    Senator Isakson. Thank you, Mr. Chairman.
    Senator Markey quoted Robert Kennedy's famous quote about 
Africa years ago. There is another quote that he made in Africa 
where they had a famine where he said, ``Sometimes people see 
things as they are and ask why. I see things as they never were 
and ask why not.''
    I think Africa is at a ``why not'' point. Africa is at a 
point where it can grow and become a major factor economically 
as a trade partner with the United States, as well as a 
political power with the United States.
    But there are three things you all have mentioned that I 
see are impediments. One is corruption, one is forced 
localization, and one is the lack of reliable energy that could 
have jobs and manufacturing for the African people.
    Mr. Renigar answered the corruption question for GE.
    Ms. Tuttle, IBM's investments, have you run into corruption 
problems in Africa? Or what do you do to address the potential 
of corruption?
    Ms. Tuttle. Thank you, Senator. IBM has a very, very robust 
policy against corruption. We have an annual global training 
for each one of our employees to reinforce our anti-corruption 
policies as part of our business conduct guidelines Our 
employees are required to certify that they understand and will 
comply with these policies.
    I will tell you, too, that we put specific focus, as we 
were going into the region, on ethics training, and a major 
part of our company in our trust and compliance focuses within 
the legal function that does regular training multiple times a 
year in ensuring that our employees themselves are aware of the 
pitfalls, the dangers, and avoiding any engagement with 
corruption.
    I will say, too, that Del was just making a very important 
point, and that is, again, there is always going to be some 
demand, but it is lessening over time. As the government 
officials, as they are dealing more and more with U.S. 
companies, they know that these companies are bound by the 
Foreign Corrupt Practices Act, and we are seeing a lessening at 
least of the corruption that we are encountering with the 
businesses.
    So it is important, too, just as you all were touting, U.S. 
companies are not engaging, we are in a campaign against 
corruption, and when you are doing business with U.S. 
companies, the governments are increasingly aware of that fact.
    Senator Isakson. Thank you very much to both of you.
    Ms. Tuttle. Thank you.
    Senator Isakson. Thank you for your investment in the 
continent of Africa.
    Mr. Leo, in your testimony, you talked about the Congress 
should modernize the U.S. development finance tools by creating 
a modern U.S. development finance corporation and by making 
modest reforms to OPIC.
    On those modest reforms, I had a visit from OPIC officials 
the other day, and they talked about going into the equity 
business. Are you familiar with that? Is that one of the modest 
reforms you are talking about?
    Mr. Leo. In terms of the reforms, I think they largely 
focus around making sure that U.S. development finance tools 
reflect the needs in current market dynamics, both for 
promoting U.S. investors but also for advancing U.S. 
development policy abroad. And in that context, where OPIC 
finds itself right now is that they have very limited tools. 
They can do a couple of things. A number of the other tools, 
frankly, including equity authority, is housed elsewhere in the 
government. So USAID has that authority right now. Feasibility 
studies are at a different agency. Other types of technical 
assistance are spread across half a dozen different agencies. 
They are not housed under one roof that is able to bring them 
all together in a seamless way and in an effective, efficient, 
and highly accountable way.
    So equity, I think, should have consideration. I realize 
there are strong views for and against it. I think there are 
lessons from other peer institutions, particularly European 
institutions, that have used it in a limited way and in an 
impactful way for development priorities and development 
outcomes. But like I said, it already exists and is being used.
    Senator Isakson. In other areas.
    Mr. Leo. But it is by USAID. It is in a disjointed way 
compared to OPIC.
    Senator Isakson. Ms. Tuttle, I appreciate you mentioning 
forced localization. Senator Coons and I are dealing with an 
issue regarding poultry, which is certainly not high-tech but 
it is certainly a major trade item for Georgia and Delaware. 
And forced localization in South Africa has kind of caused some 
barriers to chickens from Delaware and Georgia getting into 
South Africa.
    Is the same thing true with technology? Are they trying to 
force local use of technology in development to keep people 
like IBM out?
    Ms. Tuttle. Yes. I mean, I think in many of the countries 
we started seeing it manifested in the petroleum industry, 
where we started seeing some forced localization. Then the ITC 
sector in particular, we are starting to see again--they see it 
as a growth engine for their economies, so they are starting to 
target that this is a way we can bring our local domestic 
industry up and reduce our dependencies on imports.
    So, yes, we are starting to see it more and more. But I 
think the important thing--and this was the point I made in my 
testimony about how IT has an impact across all sectors. When 
we were speaking with a Nigerian official, someone from 
Citibank said you must understand, more and more of their 
services are being delivered across border. So if you are 
impeding IBM's ability to move the data and they are a service 
provider to me, that also impacts my ability to move 
information across border.
    But we are seeing this in everything from local 
manufacturing, local employment quotas, local product 
development, local IP, technology transfer. Yes, it is 
important that companies work together, and, to be honest, in 
many ways we are already doing many things. We have business 
partners. We work with local entrepreneurs. Businesses are 
doing so many things, and the question is what is the negative 
impact of forcing companies to do things, give up their 
intellectual property and all of their technologies in order to 
help build the domestic industry, while keeping us out creates 
tremendous problems and potential for U.S. companies as we are 
investing. And as I said, not just U.S. companies but their own 
companies.
    Are there other alternatives to growing and spurring 
innovation and spurring the domestic growth of their local 
companies? I think there are.
    Senator Isakson. Well, my time is up, but I have got to ask 
you a kind of yes-or-no question. You mentioned Nigeria and 
Ebola and the role that IBM played in terms of communicating 
data, if I am not mistaken.
    Ms. Tuttle. Yes.
    Senator Isakson. Nigeria was the one African country that 
actually stopped and contained the outbreak. Was that in part 
due to the communication of data?
    Ms. Tuttle. In the case of Nigeria, they declared victory 
over the immediate crisis, while we were engaging with the 
government but at any point in time, the Ebola crisis could 
suddenly occur again. So thinking about how do we look forward 
in the future of Ebola and how are we going to deal with it in 
anticipation that it could arise someplace else I think is an 
important consideration to have.
    Senator Isakson. Thanks to all the panelists.
    Ms. Tuttle. Thank you.
    Senator Flake. Senator Coons.
    Senator Coons. Thank you, Chairman Flake and Ranking Member 
Markey, and to our witnesses for today's important conversation 
about how we continue to make progress after the U.S.-Africa 
Leaders Summit of last August. I appreciate the contributions 
all of you have made to growing the U.S.-Africa relationship 
and commenting on it.
    Mr. Bollyky's testimony and the conversation Senator 
Isakson just had with Ms. Tuttle about Ebola is a reminder that 
the legacy of PEPFAR and a lot of our investment in modernizing 
health care systems in some countries like Nigeria show a very 
different outcome than we saw in Guinea, Sierra Leone, and 
Liberia, and there is reason for us to continue to invest in 
preventive systems, in changing the ground game in terms of 
health care. I found your testimony particularly interesting in 
terms of the challenge of what we do next.
    But let me turn, if I might, Ms. Tuttle, to your testimony 
on the opportunities and the tools that we have in the U.S. 
Government. You commented that Ex-Im, OPIC, USTDA, USAID, MCC, 
these are the tools in the toolkit; that businesses, clients 
and governments want and need certainty and predictability to 
grow their businesses. These U.S. assets need to be 
reauthorized, funded, expanded and updated to meet the needs of 
today's global economy.
    I would just be interested in each of you briefly 
commenting, in your experience with GE, your views on whether 
this is sufficient, or bilateral investment treaties is where 
we need to go, and how this would contribute to health care 
modernization. If just each of you would briefly address what 
is the most important thing we need to do. Is it simply 
reauthorize and fund, or is there one significant change you 
would recommend we make to this toolkit?
    Ms. Tuttle, if you would start.
    Ms. Tuttle. Ben made a comment about consolidating U.S. 
Government resources, and we should take a fresh look at what 
the best approach should be. Each of these organizations and 
functions have a different mission, a different focus. It takes 
a long time to figure out how they work, understand the 
complexity of their processes, how best to engage--and all of 
this takes time.
    There is a lot of pressure to move quickly in these markets 
and funding requirements are immediate. In fact, African 
nations have raised concerns about the ability for the U.S. 
Government to respond quickly with the various programs and 
tools they offer.
    So I think a fresh look at consolidating these 
organizations would be in order.
    I would also say that in some instances, you know we 
operate in a global economy, and of course it has to benefit 
the United States, and I appreciate that. But in many 
instances, the mandates that were developed for these aid 
agencies and assistance agencies were looking more at movement 
of goods over borders. More and more services are delivered--we 
are talking about global Internet, global delivery of services 
and access to these markets.
    So when I think about updating these policies, Ex-Im has 
made some progress in changing its policies to address the 
delivery of services, but we need to take a fresh look across 
all of the programs and ask ourselves what does today's world 
look like, and how do we update their mandates to be responsive 
to today's realities and the needs of the companies operating 
in a global market?
    Senator Coons. Let me ask you and Mr. Renigar just a simple 
yes or no question on this. Because several of these entities 
are on track now to go away--their authorization is either 
expiring or expired--it is uncertain whether they will be 
funded. If they disappeared, would private-sector mechanisms 
replace them, or are they essential to your continued growth 
across the continent?
    Ms. Tuttle. I think in many ways they are essential.
    Senator Coons. Mr. Renigar.
    Mr. Renigar. They are essential, Senator, and it would have 
an adverse impact on our ability to do business in Africa and 
our ability to compete with China and other competitors, Japan 
as well, if these tools go away.
    I would echo the comments that we need to consolidate them. 
I think the special sauce of Power Africa has been the whole-
of-government approach. China and Japan come in and say we will 
deliver the solution. We come in and say go talk to MCC, then 
go talk to TDA, then go talk to USAID. It is confusing. We need 
the one-stop shop approach.
    The other point I would also emphasize is cross-border and 
regional integration. The reality is in order to strengthen the 
entire system in sub-Saharan Africa, you need to create scale. 
And the way to create scale is to do cross-border 
infrastructure and regional integration.
    So make it a one-stop shop, and make it more focused on 
regional integration and cross-border infrastructure, and I 
think we could really seize a lot of these opportunities 
better.
    Senator Coons. So absolutely essential, streamline, 
coordinate, and empower regional.
    Mr. Leo.
    Mr. Leo. Thank you. I would just reemphasize the need for 
consolidation and scale. So I think this is a consistent theme 
that you are hearing. I think the impetus for it stands on its 
own merit in terms of the potential role and impact for 
supporting growth opportunities, stability in this increasingly 
important region.
    But particularly when you look at what other nations are 
already doing, they have already moved to scale. They have 
already consolidated their tools. The Europeans have done this 
over a process of decades. The new institutions that have been 
launched by emerging market nations like China, India, 
Malaysia, Brazil, they are housed under one roof primarily, and 
they are at scale. So I think that is what we need to do.
    Two quick piecemeal things. If we were not going at 
consolidation and scale, I would do a couple of things at OPIC. 
One, I would look at the admin budget. They have an 
underutilized capital base right now because they do not have 
enough people to do deals in a rigorous way. And then I would 
implement a couple of reforms around transparency, tracking 
impact and publicly reporting it, and making sure that there is 
explicit criteria that they only do deals that are purely 
additional. And then bilateral investment treaties. It is a 
highly underutilized tool.
    Senator Coons. Senator Isakson and I are eager to move the 
African Growth and Opportunity forward but recognize that that 
is simply extending the current relationship.
    My last question would be briefly to you. Why are there not 
more bilateral investment treaties between the United States 
and Africa when our European competitors or Asian competitors 
have many more? Is the challenge with us? Is the challenge with 
our African potential partners? Why not more BITs?
    Mr. Leo. I think there are two or three interrelated 
factors on this. One, it has not been a message that has 
emanated strongly from Washington that this is what we want to 
see happen. Instead, we have been talking about these trade and 
investment framework agreements which gather once or twice a 
year and we have a broad-ranging conversation but nothing that 
is particularly impactful. So I think it is a lack of political 
messaging that is coming from USTR and from Washington.
    If President Obama had stood on the stage at the Business 
summit last August and said I invite every African government 
who wants to attract investment to negotiate a BIT with me, he 
would have gotten a lot of takers. So that is one challenge.
    The second challenge is our new model BIT, our new template 
is very complex. It is complex for reasons. It is giving more 
public policy flexibility, but it is more difficult to 
negotiate now, particularly when you look at the other template 
agreements from our competitors. So that is a challenge we are 
going to have to address, but there are a couple of ways of 
doing that.
    Senator Coons. Mr. Chairman, Mr. Bollyky wanted to respond, 
if he might.
    Senator Flake. Yes.
    Senator Coons. Please.
    Mr. Bollyky. I just wanted to respond to the point on trade 
and investment. I am very supportive of increased trade and 
investment with sub-Saharan Africa. I spent much of my career 
working in USTR and negotiating such agreements. I am 
supportive for that reason.
    That said, one other reason why you are seeing fewer 
investment agreements being concluded in sub-Saharan Africa is 
because of concerns over dispute resolution, which extend 
beyond sub-Saharan Africa, but they are particularly true in 
sub-Saharan Africa.
    South Africa has begun a reevaluation process of all its 
BITs. It has withdrawn from several. That is going on. That 
reevaluation process of BITs has begun in other sub-Saharan 
African countries as well.
    There has never been a dispute under an investor state that 
has found nondiscriminatory regulations to be expropriation. 
That said, there have been a lot of cases brought recently, 
particularly by the tobacco industry, and that has spooked 
countries, and that is what is really leading to this 
reevaluation process of investments treaties. There are a lot 
of concerns in these countries.
    This concern is something that will be relevant for our 
ongoing U.S. trade negotiations and something to watch.
    Senator Coons. And if I hear you right, in terms of the 
impact of health, reducing the rate of growth of tobacco use 
and consumption is probably one of the single biggest factors 
in noncommunicable disease growth in sub-Saharan Africa.
    Mr. Bollyky. That is absolutely right. It is the second-
leading health risk globally. Consumption is still relatively 
low in sub-Saharan Africa but is growing fast, and as incomes 
rise it is a big concern.
    Senator Coons. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Flake. Thank you.
    Ranking Member Markey, you had a unanimous consent request?
    Senator Markey. I thank you, Mr. Chairman. I would just ask 
to include in the record a report by the International 
Renewable Energy Agency entitled, ``Africa's Renewable 
Future.'' The costs of wind and solar are falling dramatically. 
Globally, half of all new electricity capacity being added each 
year is renewable. So I think that we should just be prepared 
to be very, very surprised by how rapidly it grows, and I would 
just ask unanimous consent that it be included.
    Senator Flake. Without objection.

[Editor's note.--The report submitted by Senator Markey for the 
record was too voluminous to include in the printed hearing. It 
will be retained in the permanent record of the committee.]

    Senator Flake. I just want to thank the panel for your 
time. This has been extremely enlightening. Thank you for the 
valuable testimony, the innovative ideas. We look forward to 
following up with you. I just appreciate the time and effort 
you put into your statements, and also into your testimony here 
and answering the questions.
    For the information of members, the record will remain open 
until the close of business today.
    And with thanks to the committee, this hearing is now 
adjourned. Thank you.
    [Whereupon, at 10:56 a.m., the hearing was adjourned.]

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