Sunday, 15 July 2012 22:10

Newsletter 14

In this newsletter:

  • Chinese and Turks to connect Ethiopia to Djibouti via a state of the Art rail way system
  • Uganda embracing more Chinese Investment
  • Nairobi to become latest home of Bank of China (BOC)

Chinese and Turks to connect Ethiopia to Djibouti via a state of the Art rail way system

The Import and export transaction of Ethiopia has seen dramatic increase over the last 5 years that the country now feels the need of enhanced transport system to the outside world especially to the ports. It is with this insight that the government has continued undertaking major infrastructural improvements. On 29 June 2012 - Ethiopia has signed two deals worth US$3.2 billion with Chinese and Turkish companies to construct a railway to link the land-locked Horn of Africa nation to Djibouti's Tadjourah port in order to export potash.

As part of the five year development plan launched in 2010, the Ethiopian government not only hopes to efficiently exploit the growing business ties with China, India and Turkey, but also it aims to pursue power projects and boost infrastructure, including building several new railways.

Ethiopian Railways Corporation (ERC) head Getachew Betru said Turkish firm Yapi Merkezi will build a US$1.7 billion railway line in the northeast - part of a project that stretches to Djibouti's third port of Tadjourah, which is under construction. Tadjourah, on the Red Sea, is the closest outlet for Ethiopia's Afar region, where a number of foreign firms, including Canada's Allana Potash Corp, are developing potash mines. Allana said in February it would work with Djibouti authorities to integrate required potash storage and handling facilities into the new port plans.

The new deal follows a US$1.5 billion agreement signed last weekend between ERC and China Communications Construction Company to build a different section of the railway line to Tadjourah port. Yapi Merkazi is expected to complete its portion of the line in 42 months, the foreign ministry said on its website.

This will link up with the section being built by the Chinese firm, as well as other portions, to give Ethiopia an alternative port access from the current route to Djibouti's main outlet, providing an outlet for potash development,


Uganda embracing more Chinese Investment

Uganda is one of the many African nations to have a pioneer business relationship with the Chinese counterparts. Uganda, strategically located in the heart of East Africa, established bilateral relations with China in 1962 when it declared its independence.

"We are really grateful that China supported Uganda during the struggle for independence and supported Uganda politically and economically.” Said Madibo Charles, ambassador of Uganda to China during a recent exclusive interview with China Daily.

According to Wagidoso, Ugandan business sector is embracing more Chinese investment. This takes special curve with industry sector; agricultural processing and tourism infrastructure of the country.There has been a lot of economic engagement between the e two nations, especially in the areas of trade and investment.

China is the biggest source of foreign investment in Uganda.And the bilateral trade volume has increased substantially to more than $400 million in 2011. "It's continuously growing,” The country is also looking forward to China's investment and technology transfers in hydropower generation. He said.

The country provides easy access to a combined market of 200 million people in Kenya, Tanzania, Rwanda, Burundi, Congo, and to some extent, Central Africa.


Nairobi to become latest home of Bank of China (BOC)

The engagement of Chinese corporations is now felt in the financial sector of East Africa as the Central Bank of Kenya has granted Bank of China a license to open a representative office, a likely first step towards a full operation in east Africa, the central bank said on Tuesday.

Foreign lenders have been looking to set up operations in Kenya where collective industry profit jumped 20.4 percent last year to 89.3 billion shillings ($1.07 billion).

BOC, in which the Chinese Sovereign Wealth Fund holds a substantial stake, is headquartered in Beijing, focusing on corporate and personal banking as well as investment banking.
It also has operations in other countries including South Africa and Zambia.

South African lender FirstRand plans to acquire a mid-sized Kenyan bank, it said in May while opening its own representative office in Nairobi.

Chinese organizations are eyeing Nairobi as a base for a push into Africa, with state broadcaster CCTV, basing its Africa service in the Kenyan capital last year.


Last modified on Sunday, 15 July 2012 22:15