Digital statecraft — US-China tech backbone battle for Africa comes to Cape Town

Detailed summary

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…

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.

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.

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:

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.

Kelly added that DFC’s participation provided additionality by crowding in private debt.

Opening of the article, excerpted from Daily Maverick. To read the rest, open the article on the publisher's site.