The US is planning to offer close to $100 million of finance to Africell, Africa’s lone American owned telecommunication company, in a bid that puts Africa’s mobile infrastructure in the heart of the increasingly competitive battle for supremacy between the US and China.
Through an almost hundred-million-dollar loan offered by the US Export-Import Bank (EXIM), the loan is expected to aid Africell in purchasing state-of-the-art network technology from US and other allied suppliers in Angola, the Democratic Republic of Congo (DRC), Gambia, and Sierra Leone. As reported by Reuters, the venture has been planned in order to checkmate the rapid spread of Chinese telecom company Huawei in Africa.
Reasons why the US is investing in Africell
This investment is part of a wider strategy by the US to increase the use of technology abroad and reduce its dependence on Chinese telecommunications equipment.
Huawei is responsible for roughly 52% of 5G infrastructure in Africa, according to research published by Reuters citing Counterpoint Research. There have been longstanding concerns about the security of Huawei technology by the US government, which Huawei denies.
The Africell company provides the Trump administration with a platform for gaining a foothold in the use of technology in Africa.
The financing will enable Africell to install new technologies from America and its allies in its mobile network, according to an announcement by the US government seen by Reuters.
Implications of the Loan to Angola, DRC, Gambia, and Sierra Leone
Africell currently operates in four African countries and has approximately 15 million subscribers, providing Africell with an established customer base that could help to increase connectivity in the region.
In Angola, Africell started its operations in 2022 and has developed its network infrastructure, including technology collaborations with companies like HP, Nokia, Dell, and Oracle.
In The Gambia and Sierra Leone, Africell is already a mobile network operator, but in the DRC, Africell operates in a bigger market that requires digital connectivity.
Thus, the investment backed by the US government will not only affect 5G connectivity in the region. Improved network infrastructure could be used to implement other technologies such as mobile payments, cloud computing services, and e-businesses.
The Broader Battle on Huawei and Chinese Technology
The Africell deal is just part of the bigger battle for who will develop Africa’s digital backbone.
China has emerged as a significant provider of telecommunications equipment in Africa, with Huawei and other Chinese firms involved in the construction of networks and digital infrastructure.
The United States wants to get American companies and their allies to push harder.
But Washington’s rationale is not only economic. The US has been adamant that telecommunications infrastructure is about data security, sovereignty and strategic independence. Under the Trump administration, America has also pursued policies aimed at encouraging its agencies to support US technology in sectors such as artificial intelligence, cloud computing and networking.
Why This Matters to Africa
For the African states, the competition could lead to increased choices when it comes to financing and technology. The continent will not be limited in its dealings with one set of suppliers, and there will be more power when it comes to price negotiations and security conditions.
However, there is also an issue of Africa’s digital infrastructure becoming a new sphere of geopolitical competition.
The clear winner from all of this could be Africell, which earlier obtained a $100 million US development-finance loan in 2018 for communication infrastructure.
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