The US-China statecraft battle is coming to the Africa Tech Festival in Cape Town. (Photo: News / Xinhua)When governments use a combination of instruments to advance their national interests and maintain order, we call it statecraft. And it is frankly something that the United States has forgotten how to do in the current political era.
But it seems as if the US is recalibrating its economic engagement across Africa, positioning development finance as a primary instrument of commercial diplomacy and strategic competition.
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At the centre of this push is the US International Development Finance Corporation (DFC), whose expanded balance sheet and risk tolerance signal a shift from traditional foreign aid toward commercial co-investment.
Following its legislative reauthorisation at the end of 2025, the DFC received a substantial expansion in its lending and investment headroom. As Jim Kelly, DFC vice president for global business development, explained during a US Department of State briefing with African media:
“DFC, as the international investment arm of the US Government […] serves as America’s deal team and plays a central role in US economic statecraft. At the end of 2025, DFC’s mandate was reauthorised with expanded remit. We now have the ability to employ $205-billion over the next five years […] which is a substantial increase from the $60-billion we initially had when first established in 2019... Across Africa, DFC has more than $14.5-billion in investment commitments.”
Pulling cables, not strings
Rather than spreading capital thinly across minor grant initiatives, DFC is deploying large-scale commercial investments into critical backbone infrastructure.
The poster child tech transaction for this new strategy is an equity investment into the West Indian Ocean Cable Company (WIOCC), which is now DFC’s largest direct equity commitment to date.
“WIOCC, as many of you may know, is a Pan-African digital infrastructure company operating across more than 30 African countries,” Kelly explained.
“Our investment will help grow its fibre networks, subsea cables, data centre capacity across the continent... In addition, our investment will mobilise up to 400 million in private capital during its investment period. We’re proud to invest alongside partners including Vision International Investment Company and the African Finance Corporation.”
Kelly added that DFC’s participation provided additionality by crowding in private debt.
“For WIOCC specifically, our investment’s going to bring up to, we estimate, $300-million in lending by third-party banks, which obviously is very significant.”
Rules of engagement
Kelly explained that DFC investments must satisfy three statutory criteria:
1. Advancing US strategic priorities abroad;
2. Delivering financial returns to American taxpayers; and
3. Generating tangible, lasting economic development in host nations.
Which brings us to Cape Town – well, next week at least…
“Next week, several of my colleagues will be at Africa Tech Festival in Cape Town, and we look forward to continuing the conversations with partners there,” Kelly said.
“I don’t want this to be a reactive agency; I want it to be a proactive agency. And there’s a lot of people out there in the private sector who are very smart and very experienced and very knowledgeable about all these different international investment opportunities. And I want our team to work very closely with them to help identify things that maybe we don’t necessarily see ourselves or that aren’t known in the local countries, that a solution could potentially exist.”
Immovable object
There’s just one, China-sized obstacle. While the US relies on DFC co-financing and private capital mobilisation to establish footholds, Huawei is an entrenched technological incumbent with deep public-private relationships across Africa.
The Asian colossus anchors its presence by co-developing physical infrastructure alongside state entities and national telcos.
Last month, Huawei partnered with the KwaZulu-Natal provincial government, the Department of Human Settlements, uMhlathuze Municipality, and Openserve (read: Telkom’s once king of the local fibre market) to launch the Fibre Pre-Provisioning Proof of Concept (POC) at the Empangeni IRDP housing project (405 homes).
The model involves embedding physical fibre ducting directly into low-cost homes and roads during construction.
“This initiative is a shining testament to the power of the public and private partnerships,” said Charles Cheng, deputy CEO of Huawei South Africa, articulating Huawei’s policy-level ambition.
“It’s a pioneer step. It is our firm belief that fibre pre-provisioning must become a standard policy at a national level, integrated into municipality building codes and national housing strategy across South Africa.”
By positioning connectivity alongside basic municipal services such as water, roads, and electricity, Huawei embeds its technical standards and hardware into long-term municipal planning and national housing frameworks.
The golden egg
DFC’s strategic pivot toward African digital infrastructure is validated by financial and operational metrics reported by Africa’s two telecom titans: MTN and Vodacom.
Their scale shows that connectivity, mobile money and digital services are no longer frontier experiments, but mature cash-generating engines.
As of its third-quarter results, MTN now serves 323 million customers, including 181.7 million active data subscribers consuming 22,754 petabytes of traffic (up 27.3%), while in financial services, MTN’s Mobile Money (MoMo) ecosystem reached 70.3 million active users, processing $512.5-billion in transaction value (up 36.9%).
In its interim results, Vodacom revealed that it added 19 million smartphones across its network over the past year (lifting smartphone penetration to 69.8%) and built 3,388 new 4G and 4,328 new 5G sites.
The combined Vodacom and Safaricom fintech engine now serves 108 million financial services customers, having processed $575.5-billion in transaction value over the past 12 months. Furthermore, “beyond mobile” services (fintech, fixed-line, IoT, and digital platforms) generated R23.3-billion, representing 27.4% of group service revenue.
With South Africa’s homegrown telecoms giants proving that African digital services are capable of generating more than a trillion dollars in financial transaction velocity and double-digit subscriber expansion, the continent has become a core testing ground for global economic statecraft – with the battleground moving to Africa Tech Festival next week. DM
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