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Chinese Investments in Africa Help Revitalize Africa’s Economy

Chinese Investments in Africa Help Revitalize Africa’s Economy
October 14
04:24 2015

China’s role in helping revitalize infrastructure and financial investment acrossAfrica is gaining momentum ahead of the forthcoming Forum on China-Africa Cooperation(FOCAC) summit set to be held in South Africa in December, Kenyan expert said on Monday.

Chinese investment in infrastructure development, financial and the communication sectors,which have been key contributors to rapid telecommunication industry growth and innovationacross Africa, have increased the potential for further cooperation, according to experts onChina-African affairs.

Macharia Munene, International Relations Lecturer at the US International University (USIU)in Nairobi, said rich countries were likely to copy the Chinese leadership in formulatingappropriate policies to drive investments in infrastructure, financial services and thecommunication sectors.

Major Chinese telecommunication players in Africa, including Huawei, a telecom industryequipment manufacturer, and Zhongxing Telecommunications Equipment Corporation (ZTE)helped to reduce the cost of telecommunication across Africa, leading to faster productgrowth.

Besides the engagement of the private Chinese corporate entities across Africa, the ChinaExport-Import Bank (EXIM) has been active in the provision of infrastructure loans for thedevelopment of high-speed railway and road network development around Africa.

Munene said the forthcoming FOCAC summit should focus on enhancing economiccooperation between Africa and China while also expanding the cooperation to diplomatic andpolitical fields.

“China will continue to be the global economic engine. Given that other big powers have toanswer fundamental challenges on political economies and diplomatic practice, others will tryto emulate China in terms of special policy formulation on those fields,” Munene said.

He said both sides would be looking for points of agreement and convergence during theFOCAC summit in South Africa, especially on how to enhance cooperation in infrastructureand communication sectors.

Current Chinese efforts to bolster economic cooperation with Africa focus on reinvigoratingthe ancient Silk Roads with modern network of high-speed rail, motorways, pipelines and seaports.

“Conceptually, the Belt and Road Initiative is brilliant and serves China well. It is globallyappealing in that it does not sound threatening to anyone,” Munene said.

“The strategy will benefit African countries by reducing the cost of transport andcommunication along the Silk Road,” he added.

The extent of Chinese involvement in the financing of trade and infrastructure projects hasseen the trade between China and Africa increase substantially in the past decade.

In the past few months, African countries, including Tanzania, which benefited from theoriginal Silk Road project initiatives including the TAZARA railway, connecting the copper-richZambia to the Dar Es Salaam Port, has received loans of up to $132 million to help revampthe state-owned power firm TANESCO. The loan is also meant to finance the construction ofthe East African power pool.

Other Chinese loan beneficiaries include Zimbabwe’s urban water infrastructure and aseparate loan of $355 million for investments in other fields of the Zimbabwean economy.

The financial sector cooperation and technology transfer fields, which is emerging as one ofthe biggest and fastest growing models of the China-Africa partnership, is also on the lips ofanalysts.

“It is not a question of whether the financial sector cooperation and the technology transfer isthe more important aspect of this cooperation. They are both important and tend to besymbiotic for without one, the other is likely to suffer. High finance and high technology feedinto each other,” Munene said.

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Jide Adesina

Jide Adesina

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1 Comment

  1. Carlee
    Carlee May 13, 21:15

    If not for your writing this topic could be very coeltvuond and oblique.

    Reply to this comment

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