Africa should show more investment opportunities for China

By Eric Biegon

The Chinese government has yet again expressed its willingness to increase its investments in Africa. The Asian economic giant says it acknowledges the potential within the continent and market opportunities available therein.

It is an open secret that the continent is blessed with abundant resources. Whether in energy, natural resources sector or agriculture, analysts say Africa has a strong comparative advantage.

Undeniably, Africa is home to thousands of overseas companies, a large number of them being Chinese. Statistics show that these companies are growing faster than their peers elsewhere. Their balance sheets also point to huge profits.

Photo taken on Nov. 16, 2015, shows local residents fetch water with a well thanks to a China-aid project, in Bilene district, Gaza Provinces, Mozambique.[Photo: Xinhua]

China’s Ministry of Commerce, however, argues that Africa needs to diversify in order to attract more investments. This is especially so given that the continent is witnessing rapid urbanization and the existence of a larger working-age population. This is where the Chinese government thinks Africa can take advantage and catapult itself to achieve more inclusive growth.

Chinese officials say companies are waiting on the wings to inject their resources to Africa but insist that it is the responsibility of African countries to provide adequate information on areas of investment which China and others can explore.

Statistics within the ministry indicate that by the end of 2015, the stock of China’s investments in Africa hit 34 Billion US Dollars, which is 60 times compared to the year 2000. Furthermore, the peak of China’s trade volume has reached 220 Billion US dollars, three times compared to the year 2000.

But Chinese government holds the opinion that many areas of investments remain unexplored in the continent which has nearly 80 percent of its population living in poverty. And this is specifically where it wants African governments to play an even more proactive role.

“We need specific grounds to work on. Both sides should do enough visibility studies on the mode of cooperation and model of finance to expand the ability of Africa to improve itself.” Top ministry of commerce officials said.

The ministry argues that Africa is a continent of more than 5o countries with situations which are vastly different. In its opinion, there must be precision in terms of projects to invest in.

Mr. Wang Dong, who is a director at the department of African affairs in the Ministry of Commerce, further denied claims that the Far East country has concentrated its investments in bigger economies of Africa like Kenya, Tanzania, South Africa and Ethiopia compared countries perceived to have smaller economies in the continent.

“There are many areas of growth but we need more information from the local countries. African countries should put much effort in providing the required information. For instance, they can deliver much deeper and comprehensive information through our embassies.” He said.

Addressing a group of African journalists, currently on a tour of China courtesy of China Africa Press Center in Beijing, on the status of Chinese cooperation with Africa, Wang disclosed that a large number of Chinese companies are eager to begin operations in Africa. He, however, claimed that little information is available on areas to be ventured into.

“With abundant information, Chinese companies will come to Africa.” He stressed.

The official further disclosed that the prevailing conditions in host countries to a large extent dictate the level of investments they are likely to receive from China.

“We need favorable conditions and environment. Africa countries must provide a conducive environment for business.” Noted Mr. Wang

Even so, he maintained that President Xi Jinping’s administration has increased investments in the so-called “smaller economies” by more than 6 percent in the last one year alone.

Chinese authorities have drawn 10 cooperation areas with Africa ranging from Industrialization, Agriculture, Infrastructure, Green development, Trade & Investment, Poverty alleviation, Healthcare, Human resource, the social program as well as Peace and security.

According to implementation timetable, 2017 remains a critical year and China says it is committed to it until they all become a reality.

Africa, undoubtedly, has numerous opportunities for investment whereas China’s fidelity to growing friendship with Africa cannot be overstated. Having championed the establishment of One Belt One Road framework, China has constantly pushed for the participation of more African countries in the framework, notwithstanding their economic status.

The Belt and Road framework is emerging as the best singular platform to catalyze development in the continent, through the much-publicized win-win model. It is an initiative which developing countries are so eager to embrace given that it is laden with opportunities for growth. It will also power economies which have stagnated for long.

The five key pillars of Belt and road, for instance, connectivity, unimpeded trade, people to people exchanges, financial support and policy coordination could not have been formulated at a better time. They provide countries in the continent a level playing field while addressing specific issues affecting individual countries given that local conditions differ.

It is thus incumbent upon African governments to sieve through opportunities presented within the Belt and Road Initiative, paying close attention to their unique circumstances. Chinese President Xi Jinping has constantly championed it as a platform that does not segregate any nation.

This gesture clearly demonstrates that China has thrown the ball squarely to Africa. The continent must now play the ball to its advantage to ensure that the ultimate goal of economic, social and political development is achieved. What’s more, the platform is laden with players blessed with tremendous abilities.

(Eric Biegon is a news reporter with the Kenya Broadcasting Corporation)