Monday, 01 October 2012 12:07

Newsletter 19

In this newsletter:

  • Africa needs china’s positive investment
  • China Trade, Investment Grows in Africa
  • Ethiopia's Foreign Direct Investment Policy

Africa needs China's positive investment

Keith Jefferis, former deputy governor of the BankofBotswana and managing director of Econsult Botswana (Pty) Ltd, said China is an important source of investment and finance.

China's investment in Africa is more economic rather than political," Jefferis said.

Economic activities between China and Africa stood at $166.3 billion in 2011, up 83 percentfrom 2009.

Jefferis said African countries need investment to improve their infrastructure and markets fortheir natural resources.

"China's demand for commodities has reversed the longterm decline in global commodityprices to Africa's enormous benefit. Import volumes are up but export values are up evenmore," he said.

Africa has benefited from Chinese-led commodity "super-cycle" by exporting expensive commodities and importing cheap goods.

China has assisted African countries improve their infrastructure through various ways, and as a result, Chineseconstruction companies are growing fast in African markets.

According to Jefferis, China and Africa are complementary in their needs. In the near future, there is enoughscope for their cooperation in various areas such as agriculture.

"About 60 percent of the world's uncultivated farmland is in Africa. Opportunities for increased productivity and output,by using modernirrigation and improved farming techniques, are big," Jefferis said.

He said that promoting the development of agriculture is key to poverty alleviation in manyAfrican countries.

Reference:

China Trade, Investment Grows in Africa

In 2009 China surpassed the United States to become Africa’s largest trading partner, The two-way exchange was valued at $160 billion last year, compared to just $10.6 billion a decade earlier .
2,000 Chinese companies now have dealings in Africa, with investments totaling $14.7 billion and with an increase of 60 percent in two years.

Chinese Premier Hu Jintao said the Chinese people are asking their government to take more responsibility for fostering economic growth in Africa.

Theforum was attended by senior officials from more than 50 African countries, including South Africa's President Jacob Zuma, Côte d'Ivoire's President AlassaneDramaneOuattara and Kenya's Prime Minister RailaOdinga.

Hu issued five pledges to the continent, including a promise of $20 billion in foreign aid - twice as much as was promised three years earlier.

China is also finding the continent to be an increasingly important market for its manufactured products and a great source of needed raw materials.

U.N. Secretary-General Ban Ki-moon, at the opening of last month’s conference in Beijing said Chinese involvement in Africa is helping the continent to achieve its Millennium Development Goals.

Skepticssay, China’s increasing economic presence in Africa translates into greater political influence.
But, China made no effort to hide the political implications of the country’s involvement in Africa. It said the growth of trade and investment is helping to promote the establishment of “a fair and rational new international political and economic order.”

Reference:

Ethiopia's Foreign Direct Investment Policy

The Ethiopia government saw foreign direct investment (FDI) as key to the development plan forEthiopia. This attitude helped shift Ethiopia’seconomy from being reliant on agricultural exportto, manufacturing industry.

By citing China as a model for governance, Ethiopiawants to nurture a competitive productive base rather than laissez-faire economics.

On a mission to liftthe population out of poverty the government is trying to spur economic transformation using FDI.

As a result of this approach Chinese banks and firms have funded and built roads and dams, and more recently have moved into leather and footwear manufacturing inEthiopia.

According to a recent International Monetary Fund report, Chinese firms are attracted by the abundance of man power, large plots of land and a growing market of 94 million people.

The Ethiopian government’s economic policies resulted in improved bilateral trade relations with china.

Chinese factories like shoe manufacturer Huajian are now relocating production facilities to Ethiopia. The company was drawn by one of the largest livestock industries in Africa.

The firm may generate four billion dollars in exports a year, according to the company’s vice president.

Chinese businesses have invested 900 million dollars in the country,as a result, FDI in Ethiopia climbed from 150 million dollars in 2005 to 1.1 billion dollars in 2010 according to the national bank of Ethiopia.

This was mainly made possible partly because of the extensive investment coming from Chinese government and its multinational companies.

ZemedenehNegatu, managing partner of Ernst and Young in East Africa told IPS“FDI is increasing steadily, and Ethiopia could receive 1.5 to 2.0 billion dollars each year up to 2015, excluding possible additional investments in the oil and gas sector,”

Ethiopia’s ranking in the World Bank’s Doing Business annual survey has improved to 111th out of 183 countries, higher than the emerging giants of India and Brazil.

Reference:

in 2009 China surpassed the United States to become Africa’s largest trading partner, The two-way exchange was valued at $160 billion last year, compared to just $10.6 billion a decade earlier .
2,000 Chinese companies now have dealings in Africa, with investments totaling $14.7 billion and with an increase of 60 percent in two years.

China trade value


Chinese Premier Hu Jintao said the Chinese people are asking their government to take more responsibility for fostering economic growth in Africa.

Theforum was attended by senior officials from more than 50 African countries, including South Africa's President Jacob Zuma, Côte d'Ivoire's President AlassaneDramaneOuattara and Kenya's Prime Minister RailaOdinga.

Hu issued five pledges to the continent, including a promise of $20 billion in foreign aid - twice as much as was promised three years earlier.

China is also finding the continent to be an increasingly important market for its manufactured products and a great source of needed raw materials.


U.N. Secretary-General Ban Ki-moon, at the opening of last month’s conference in Beijing said Chinese involvement in Africa is helping the continent to achieve its Millennium Development Goals.

Skepticssay, China’s increasing economic presence in Africa translates into greater political influence.
But, China made no effort to hide the political implications of the country’s involvement in Africa. It said the growth of trade and investment is helping to promote the establishment of “a fair and rational new international political and economic order.”

Source: VOA news