Saturday, 04 February 2012 04:56

Newsletter 3

In this newsletter

  • New AU headquarters complex; a sign of strong bond between china and Africa
  • China proves better interest in Africa than the World Bank
  • China beats France, Italy and US combined in the construction sector of Africa

New AU headquarters complex; a sign of strong bond between china and Africa

newsletter-3-article-1-African-Union-Addis-AbabaOn January 12, 2012 Prime Minister Meles Zenawi paid a triumphing visit to the new AU headquarters resting on more than 11 hectares inside the current AU premises complex, Addis Ababa. “The building is indicative of the close partnership between Africa and china,” PM Meles said during the visit.

The construction of such a state of the art headquarters complex commenced in January 2009 by the China State Construction Engineering Corporation (CSCEC). In the visit it was underscored that the Chinese government fully financed the complex which up until now has consumed close to 200 million USD. The Prime Minister also noted that Ethiopia has made a significant contribution for the construction of the headquarters by granting 130,000 m2 of land for free among others.

The official inaugural ceremony of the 20-storey complex comprising a 2,500 person-capacity conference center, briefing room, media center, shops and libraries is scheduled for January 28, 2012 during the 18th AU Summit. President Hu Jintao is expected to arrive in Addis Ababa for the official inauguration.

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China proves better interest in Africa than the World Bank

The Fitch ratings reported on December 28, 2012 that EXPORT-Import Bank of China (EXIM) extended $12.5 billion more in loans to sub-Saharan African countries in the past decade, than the World Bank. Between 2001 and 2010 China’s EXIM lent about $67.2 billion to sub Saharan Africa while the World Bank extended $54.7 billion. The report also estimated that 20 per cent of EXIM bank’s total business volume is conducted with Africa.

China has been boosting ties with Africa, as it seeks to secure access to the continent’s raw materials and new markets for its manufactured goods. In return, it has provided African governments with immense finance to develop their economies. Chinese approach of loan to developing nations is different from the west and that of international institutions like the World Bank and International Monetary Fund as it attaches less stringent conditions.

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China beats France, Italy and US combined in the construction sector of Africa

As African countries move vigorously towards extensive construction projects, it is now becoming clearer that the Chinese companies are winning the grace of most of African countries in the construction sector. Chinese construction companies now dominate African construction taking a larger market share than those of France, Italy and US combined. Such dominance seems to be left undeterred by the recent economic crunch.

China’s keenness in extending long-term loans to infrastructures seems to fuel its recent dominance in the sector. Over the past decade this relation has resulted in the perfect match between the continents acute infrastructure deficit on one side and China’s financial resources and surplus construction capacity on the other.

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Last modified on Saturday, 04 February 2012 05:11