US congress ‘could hurt’ Nigeria’s power projects

Should the American congress close the US Export-Import Bank, Nigeria’s power projects could be badly hurt.

Mr. Jeff Immelt, chairman of General Electric (GE), issued a warning to that effect in an interview with the Financial Times published on Monday.

The charter of the ExIm Bank provides credit to foreign buyers of US products ─ and Nigeria is one of the beneficiaries in its engagement with GE.

The charter will expire in September and conservative Republicans are strongly kicking against the reauthorisation, describing it as “crony capitalism”.

GE, which is the biggest player in Nigeria’s power projects, is also one of the biggest participants in President Barack Obama’s Power Africa initiative to provide $7bn support for power projects in the next five years.

Immelt (pictured) said the ExIm Bank was crucial for US companies operating in Africa because it showed the government was prepared to have “some skin in the game”.

The closure of ExIm Bank would mean “we are basically making a statement as a country that we do not think that exports are important,” he told FT.

Obama is currently hosting a US-Africa trade summit, with 50 African leaders ─ including President Goodluck Jonathan of Nigeria ─ in attendance.

With China, Japan and the EU enjoying a boom in their economic links with Africa, the US is now playing catch-up.

If ExIm is abolished, at least 10 American companies will be badly hit.

Obama is making moves to retain ExIm, although congress is currently on recess till September 8, about the time the charter will expire.

“Every country does this. It’s traditionally been championed by Republicans. But for some reason, right now the House Republicans have decided that we shouldn’t do this,” Obama said on Friday.

He said when companies like Boeing and GE are competing for contracts with German or Chinese rivals, “we may lose that sale”.

FT reported that research by George Mason University showed that 10 US companies receive three-quarters of ExIm Bank financing, with GE among the main beneficiaries.

The Standard & Poor’s rating agency warned in July that dissolution of the ExIm Bank could have a “significant” long-term impact on Boeing, the commercial aircraft maker which receives more than a third of the bank’s credit, the British newspaper further reported.