ANALYSIS: Digital statecraft — US-China tech backbone battle for Africa comes to Cape Town
On the eve of Africa Tech Festival, the US Development Finance Corporation announced a massive capital investment into Africa’s digital arteries, setting up an interesting connectivity conversation.
In the wake of Africa Tech Festival, the US Development Finance Corporation (DFC) unveiled a significant investment in Africa's digital infrastructure, signaling a shift in US economic engagement on the continent. This move, spearheaded by the DFC's expanded balance sheet and risk tolerance, aims to position development finance as a key tool for commercial diplomacy and strategic competition.
The DFC, as the international investment arm of the US government, now has the authority to deploy $205 billion over the next five years, a substantial increase from the initial $60 billion when established in 2019. This investment strategy focuses on critical backbone infrastructure, as opposed to smaller grant initiatives. The poster child for this approach is an equity investment in the West Indian Ocean Cable Company (WIOCC), DFC's largest direct equity commitment to date.
Under this investment, WIOCC will expand its fibre networks, subsea cables, and data centre capacity across more than 30 African countries. The DFC's involvement is expected to mobilize up to $300 million in private capital. According to Jim Kelly, DFC vice president for global business development, the investment will also attract up to $300 million in lending from third-party banks.
While the US focuses on its digital statecraft, Africa faces a formidable challenge from China's Huawei. The Asian tech giant has established deep public-private relationships across the continent, often co-developing physical infrastructure alongside state entities and national telcos. Huawei recently partnered with the KwaZulu-Natal provincial government, the Department of Human Settlements, uMhlathuze Municipality, and Openserve to launch a Fibre Pre-Provisioning Proof of Concept at the Empangeni IRDP housing project.
This initiative, which involves embedding physical fibre ducting directly into low-cost homes and roads during construction, underscores Huawei's ambition to embed its technical standards and hardware into long-term municipal planning and national housing frameworks.
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