Daniel’s Blog

Here is a ridiculous, hypocritical, and pompous article by a British writer accusing China of evil and exploitation over natural resources (pot, meet kettle).  A few words before posting the link. Yes, I agree China has significant issues to fix right now, many of which are not too dissimilar from the social problems America faced when it was undergoing industrialization itself.  The article sounds reminiscent of anti-American derision by certain arrogant Brits, 100 years ago, when Britain was declining as a superpower.

What is irritating is an added component of borderline xenophobia that permeates this article and other recent Western media, whether it be over Chinese toys, Olympics, Tibet, or Darfur, etc, which was recently hinted about in a Jeff Yang column published in the Washington Post.  I believe articles like Hitchens’ are as propagandist as any recently biased Western media that have tried to demonize Jews, Arabs, or Persians to the rest of the Anglo world.  It has become very easy to write Western articles about Asians or China as a less human ‘other’, with the attitude that certain evils or guilts are true before investigation.

Biased media can be damaging when uninformed, easily-influenced Americans mentally associate anti-China propaganda with negative attitudes toward Asians and/or Asian Americans.  Current comments below American news sites reveal the blanket stereotypes, racism, and/or bigotry that can manifest itself within everyday Americans who read biased news. If you remain skeptical about the damage, look up the ‘Committee of 100’s disturbing study on American people’s negative views toward Asian Americans, or for a related example read explanations from scholars about why certain criticisms about Israel within America can be anti-semitic and/or alarming for Jewish Americans.

I did not want to link the article until after the above introduction. The piece, published today, and written by Peter Hitchens in a UK paper, is titled ‘How China Has Created a New Slave Empire in Africa’. I have included excerpts and my thoughts in an extended post entry below.

Doing business in Africa was once perceived as a difficult and complex undertaking. The reasons: the numerous processes associated with conducting business, combined with a fragile investment climate and inadequate infrastructure.

But, with fewer conflicts, more democratic elections, and economic growth rates that gradually have begun to compete with those of other developing regions, Africa is proving itself again a continent of positive change.

In Doing Business 2008, the fifth in an annual series of reports issued by the World Bank and the International Finance Corporation, two African countries — Ghana and Kenya –rank among the top 10 reformers worldwide who have made the most significant advances in the aggregate ease of doing business.

Kenya Shows Gains in Reforms Kenya’s reforms have involved an ambitious licensing reform program, which has eliminated 110 business licenses and simplified eight others. These and other changes, combined with financial and technical support of development partners have given promise to companies such as the Kimemia Engineering Company Limited. Over ten years ago, Eddy Kimemia and his wife Diana Ndungu formed their business. Together with their two sons, they hoped to engage in general building construction and civil engineering, including road works. Theirs was a small family business, which faced the typical difficulties of small and medium-scale enterprises in Kenya: lack of access to finance due to inadequate security and perceived risk by potential lenders. Kimemia Engineering Company The Kimemia Engineering Company also bore the additional burden of lengthy business licensing and registration processes, and long delays in payments especially for public jobs.The Kimemias were introduced to the International Finance Corporation’s Small and Medium Enterprises Solution Center (IFC SSC), which, through its SME Risk Capital Fund, offers unique flexible financial products to companies with promise. The couple was able to obtain the required working capital for a US$6.6 million road construction contract which they had won and were also given technical assistance to improve their financial systems. More and more, companies in Kenya continue to benefit from the IFC’s program to boost businesses that have the potential to grow. Through the group’s SSC and business licensing reforms supported by The World Bank, the cost of doing business in Kenya has dramatically gone down. Nosey Be Opens its First Laundry Other reforms also are changing the course of doing business on the continent. In 2006-2007, 24 African countries implemented 49 reforms which have made it simpler to start a business. They have strengthened property rights, enhanced investor protections, increased access to credit, eased tax burdens, and expedited trade while reducing costs. This wave of reforms has swept through Madagascar, where business start-up has been reduced to seven days by eliminating five procedures and streamlining operations. This, in turn, has attracted investments and promoted small private business. Fifty-four-year-old Bruno Randriamialijaona is the proud owner of Madagascar’s first and only laundry in its main tourist area Nosy Be. In February 2006, Bruno and his wife Brigitte decided he would take early retirement from the bank where he had worked for 33 years to start their laundry, Classic Clean. Elma Ross, president of Nosy Be’s Tourism Board, explains how novel an idea it was: “The expansion of international tourism creates real business opportunities in Nosy Be, and international-standard hotels and restaurants definitely need professional laundry services,” she said. But the business idea was enmeshed with the usual difficulties in doing business in Africa. In 2006, the same year Randriamialijaona opted to start his business, the World Bank’s Doing Business report ranked Madagascar 149 th out of 175 in the ease of doing business, and 159th in access to credit. Classic Clean’s solution came through the Malagasy Government’s US$129.8 million Integrated Growth Poles project (IGP), financed by The World Bank Group. The project aims to provide the adequate business environment to stimulate and lead economic growth, and to allow Malagasy firms to play a greater role in the economy. As part of its activities in Nosy Be, the IGP project set-up the Partial Portfolio Guarantee (PPG)program in collaboration with the IFC and two local banks. The project supports 50 percent of the guarantee needed for a loan from the banks. As one of the beneficiaries in Nosy Be, Randriamialijaona took out two loans through the program. Classic Clean now employs 13 people, and takes care of 1,000 pieces of laundry each day, with clients including hotels and restaurants in the Nosy Be area. “I am really proud to show that small-scale formal Malagasy enterprises can take risks to build their capacity in providing professional services,” Randriamialijaona said. The Business Uganda Development Scheme There are numerous other success stories emerging from African entrepreneurs, who have proved that with a little financial push and an enabling business environment much can be achieved in promoting private investment and closing the poverty gap in Africa. SAMEG Chemical Products, the first company to produce wide-ranging cleaning detergents in Uganda. In Uganda, which positively reformed its labor law in 2007 along with several other reforms, impressive progress has been realized.The story of Samuel Rugambwa and his wife Margaret is one of the many that highlight the impact of these reforms. On return from exile in 1990, the Rugambwa’s found a struggling economy that had a limited supply of basic needs products such as soap and other cleaning agents. They exploited this niche to start producing detergents. With about US$400 in savings, they converted their residential home into SAMEG Chemical Products, the first company to produce wide-ranging cleaning detergents in Uganda. As their business expanded, they needed working capital and business advice to reach a wider market. The Rugambwa’s turned to the Business Uganda Development Scheme (BUDS) a component of the Private Sector Competitiveness Project, financed by the World Bank. The project aims to improve enterprise creation and growth of Micro, Small and Medium Enterprises (MSMEs) by raising productivity and improving the quality, standards and reliability of such producers.The company invested in three regional trade exhibitions, which opened up avenues for a bigger market. BUDS refunded 50 per cent of SAMEG’s trade exhibitions costs, allowing for reinvestment of the saved finances into expansion of their business. BUDS also provided a grant to help SAMEG improve packaging and labeling in order to make their products more competitive. Their business technological capacity was also boosted with computers and financial management packages. Today, the Rugambwas are proud owners of a successful and growing small-scale business producing a wide range of products including detergents, bleach, petroleum jelly, skin care products, shampoos, hand and shower gel. By the end of 2006 their total returns had multiplied one thousand fold from $400 to $0.25 million. “We need to increase our productivity to meet growing demand,” says Rugambwa. “We need initiatives that can help local industries especially with machinery… My appeal is to government to put protective measures for local industries against foreign products and to provide access to cheaper credit.” Nigeria and Malawi Reforms Aid Local Businesses In Nigeria, Africa’s most populous country, reforms have seen the computerization of the national company registry, the speeding up company name searches and an increase in efficiency. Entrepreneurs can now start operating a new business within 34 days and the planning authority now issues construction permits in 30 days. This has attracted investments and the return of some highly skilled persons that had fled the country for greener pastures in the developed world. In 2003, Dr. Bart Nnaji, a former federal minister of Science and Technology in Nigeria, and his partners, were competing against more experienced multinational companies to build Geometric Power Limited (GPL), an indigenous power company, which today boasts a US$250 million, 140 MW, integrated generation and distribution power plant. The challenge: a country with very poor energy infrastructure, inadequate business regulation and lack of access for undertaking business ventures of such magnitude, For GPL to take off , Nigeria’s federal government, with support from the World bank Group, developed and enacted the Electricity Act of 2005, which saw the unbundling of the state monopoly and paved the way for private sector participation in the power sector. The IFC also played an important role in guiding GPL in its development phase through the provision of financial and technical assistance. The involvement of IFC, which currently is considering a total investment of about US$60 million in a combination of equity, senior debt and quasi-equity in GPL, has encouraged investor confidence and has set GPL on a path to being one of the most prominent local companies in Nigeria. Malawi is yet another country on the move. Its ease of doing business reforms have seen the launch of the commercial division of its high court and the appointment of specialized commercial judges. This is a significant stride in Malawi’s reforms, which seek to pave the way for growth of the private sector and investment. One of the beneficiaries of these reforms is Ivy Gondwe, who with her husband has transformed a huge spread of idle land in Malawi’s capital Lilongwe into the luxurious Ufulu Gardens Hotel. “It just started with the idea of going back to Malawi, but wanting to build something there,” said Gondwe. “One day, at the dinner table, we talked about buying land and building. A friend drew a sketch, a typical American neighborhood in the suburbs. Now I am managing the business.” In 1996 when the Gondwes started their business, things were very difficult in Malawi. They were venturing into the hotel industry in which they had no experience; they had neither guidance nor information on government regulations on setting-up such a business; and had no funds beyond their savings. No local bank was willing to finance their project. The Gondwes finished their project in 1999 after getting support from the IFC. They are now expanding their premises with the addition of a 25-room hotel, restaurant, bar and conference center.

(WorldBank)

Tom Minney

ADDIS ABEBA, Sep 27 (IPS) - Behind the media headlines about China’s scramble into Africa, new trends are emerging of far-reaching involvement in finance, infrastructure and manufacturing. A two-way engagement even sees African lessons shaping Chinese foreign policy.

This is the argument presented by researchers from the South African Institute of International Affairs (SAIIA), a foreign policy think tank. They were hosted by the African Union’s Department of Economic Affairs in Addis Abeba, Ethiopia, on Sep. 8, to present their ongoing China in Africa project.

”We’re at the end of the beginning of the Chinese surge into Africa,” said team leader Chris Alden of the London School of Economics and Political Science. ”China is diversifying its investments and changing its policies. It is developing a sustainable engagement.”

Alden said media headlines describe China as ”leading the charge” in a recent investment surge into Africa, under a ”no conditions” aid and investment policy and welcomed by Africans rebelling against Western donors who link aid to democracy and governance conditions.

China’s arrival is backed by deep financial pockets and a history of strong support for African independence. It has rapidly become a significant player in resources, especially in oil-rich Angola, Sudan and Nigeria, is Africa’s leading infrastructure lender and is in the forefront of two-way trade.

Chinese construction firms are turning to Africa as China’s domestic construction slows. Projects are often linked to access to Africa’s rich resources but, once established, Chinese firms also compete in the local market. Researcher Isaac Idun-Arkhurst, of the UK’s Cambridge University, said China’s growing aid programme to Ghana includes the 600 million dollar Bui Dam on the Black Volta River.

China’s Sino Hydro is building it and China’s ExIm bank is financing it, backed by cocoa revenues. Sino Hydro has since won contracts on four more hydro-electric projects, some backed by international finance consortia.

Chinese manufacturing in Africa is a change in a market used to deadly competition from cheap Chinese imports. In October 2007, Beijing’s Tianpu Xianxing Enterprises and Kenya’s Electrogen Technologies started building the first solar panel factory in Eastern Africa, in a 125 million dollar joint venture. The plant highlights China’s new role in creating local employment, technology transfer and a lasting partnership.

SAIIA’s Tsidiso Disenyana said solar energy is growing fast in Kenya, particularly in rural areas affected by poor transmission and distribution infrastructure. Some 200,000-350,000 photovoltaic systems are in use, demonstrating that solar power is viable even for poor households in an unsubsidized market. The new plant could bring the cost of panels down by 40 percent, ensure faster take-up of solar energy and be replicated elsewhere in Africa.

Chinese banks are entering emerging banking and capital markets just as the West is reeling and likely to focus on rebuilding at home, said SAIIA financial consultant Riaan Meyer. Chinese banks have little exposure to the ”toxic products” that are crippling Western banks.

”China has a unique problem — it has too much cash,” he said. Acquisition is one route into new markets, such as the Industrial and Commercial Bank of China’s 5.5 billion dollar investment for 20 percent of South Africa’s Standard Bank in October 2007; that purchase brings ICBC good banking systems and a presence in 18 African countries and London. More mergers and acquisitions could follow.

Chinese banks are increasing trade finance and following Chinese businesses into Africa by setting up corporate and retail banking services and expanding branch networks. The China-Africa Development Fund, set to grow to 5 billion dollars, is funded by the China Development Bank and China ExIm Bank. It signed its first four deals with Chinese companies in January 2008 for infrastructure and housing projects.

In project finance, Sonangol-Sinopec International, a joint venture between Angola’s state oil company and a Chinese refiner, successfully bid a record 1.1 billion dollars for oil bloc 18 off Angola’s coastline. The deal was opened to Western banks to help finance what one magazine termed African oil and gas ”deal of the year”.

Elaborating on China’s policy after the presentation, Zhang Yeubang, Counselor at the Chinese Embassy in Addis Abeba, said China’s cooperation with Africa follows principles of mutual respect, believing that countries should respect each other’s ”dignity” and work on the basis of equality and mutual benefit. He said China had also experienced bullying.

On competition, he explained: ”We have developed our technology and skills in the past decades — we have the most railways, the longest bridges and the biggest dams. We have a workforce that can stand up to hardships”.

Summing up, Alden said China is proving ”the catalyst for African development”, but must calm disquiet. On the positive side is the substantial hard infrastructure, including roads, railroads and hydro-electric dams, where the skills and overcapacity of China’s construction sector means mutual benefit from the interaction. Local manufacturing, banking and a willingness to open projects for Western and other financing and support show China’s evolving role.

On the negative side is ”de-industrialisation” as Chinese imports destroy local manufacturers. Other concerns include that Chinese aid is tied to using Chinese firms and doubts about whether local contractors have capacity to take up their smaller share of projects.

In some countries, infrastructure projects are run by the Chinese embassies and handed over when complete. There is concern whether project supervision is adequate to ensure Chinese companies deliver to their potential. While state-owned companies are getting better at governance, private Chinese firms have a reputation for exporting ”worst practice”.

On the political front, China is learning fast from its involvement in Africa. Popular activism about Darfur dented China’s image-building around the Olympic Games. Resource firms worry their massive investments will be subject to the fortunes of unstable regimes. China may soon find its interests aligning with those of other superpowers.

Problems such as sole sourcing, corruption and environment are not limited to the Chinese and many of Africa’s previous partners are also guilty. Controlling them requires effective regulatory regimes and civil society, says Alden, and getting the best of the new partnership could ”come down to African governance”.

(globalnewsblog)

On September 27, the conference of “China-Africa economic trade and cooperation-how to open up African market” was held in Beijing. It was organized by Chinese-African People Friendship Association and Chinese Research Society of African Issues.

Abdul’ahat Abdulrixit, vice chairman of National Committee and president of Chinese-African People Friendship Association, attended and addressed on the conference.

He said that China-Africa Cooperation Forum marked a new epoch of cooperation between China and Africa, and promoted the trade cooperation to enter a new era of rapid development. In recent years, the total value of trade between China and Africa increased nearly 40% every year. Now, the cooperation has been in the phase of all-dimensional, multi-level and wide-ranging development.

He also mentioned that the economics of two sides have great complementarity and cooperation potential. It is helpful for promoting the Chinese-African relationship to a new level to practice the effects of China-Africa Cooperation Forum Beijing Summit.

By People’s Daily Online

China on Friday provided 1 million U.S. dollars and another 2 million dollars worth of building materials to Kenya to help the country recover from the consequences of the post-election riots.

“The Chinese government and its people are very sympathetic to the tens of thousands of Kenyans rendered homeless in the riots,” Chinese ambassador Zhang Ming said, noting that China has provided humanitarian aid to the East African country soon after the riots flared up in January.

To show its support to the Kenyan coalition government, which has done a great deal in restoring social economic order and resettling refugees, China has decided to send this new batch of aid to Kenya, the ambassador said during a meeting with Kenyan Finance Minister John Michuki.

Michuki expressed his gratitude to China, saying the donation would further strengthen the friendship between the peoples of the two countries.

Disputes over the result of the December general election triggered widespread riots and ethnic violence that killed at least 1,200 people in Kenya. More than 300,000 others were displaced.

With the mediation efforts by the African Union, the two major political parties in Kenya agreed to a power-sharing deal and formed a coalition government in mid-April.

(xinhuanet)

The oil-rich African nation of Angola and China plan to start direct flights between their capitals next month, the state-run Jornal de Angola reported.

Under the deal signed Thursday in Beijing, Angola’s state-run TAAG airline and Chinese carriers will begin flying from Luanda to Beijing and the southern Chinese city of Guangzhou, the paper said.

“Initially TAAG chose to fly to two cities, Beijing and Guangzhou,” the airline’s vice commercial director Jacinto Junior said in the paper.

He added the airline was waiting for Chinese authorities to allocate timetables and airspace for the flights.

“The profitability of the route is proven, given the number of Chinese companies operating in Angola under the national reconstruction program,” he said.

State-run radio RNA reported earlier this week that China’s Hainan Airlines and Oriental Sky Aviation were set to win contracts to fly into Luanda.

Angola’s airlines were banned last year from flying to the European Union over safety concerns.

(quamnet)

by Anurag Viswanath / New Delhi

The Chinese have mapped out a true sweetheart deal - marrying national economic interests with philanthropic overtones

China is courting the African continent big-time and how. Sino-African trade of $12 million in 1956 reached $39.7 billion in 2005 and is expected to reach $100 million by 2010. China ‘looking at Africa’ has translated into over 71 agreements covering science, technology, trade; a reduction or annulment of debt of 31 African countries, special treatment to 190 products from 29 African nations; an estimated 800 aid projects and 18,000 scholarships; in addition, 16,000 doctors and 3,000 Chinese peacekeepers are stationed in Africa. In fact, China celebrated the 50th anniversary of diplomatic relations between 46 of 53 nations of Africa in 2006. With 30 per cent of China’s oil supply coming from Africa, the question is whether this is 21st century brand of neo-colonialism — oil diplomacy and a scramble for Africa’s abundant natural resources and extensive markets.

China claims that Sino-African relations are “embedded in the long history of interchange” and that the Sino-African bilateral relations are on a sturdy keel of “sincerity, equality and mutual benefit, solidarity and common development principles” and this is fundamentally guiding the exchange. However, with Chinese eyes on oil-rich and resource-rich countries in Africa such as Nigeria (Africa’s largest oil producer and the world’s sixth largest oil exporter), Angola, Algeria and Congo-Brazzaville, critics in the western world are slamming China’s foray as a competitive global player into Africa.

According to a recent estimate, between 2001 and 2006, Africa’s exports (oil, gas, minerals and metals) to China increased at an annual rate of over 40 per cent, rising from $4.8 billion to reach $28.8 billion in 2006. During the same period, Africa’s imports from China (manufactured products, machinery) quadrupled to $26.7 billion. The composition of trade — 62 per cent of Africa’s exports is oil and 13 per cent crude metals — is quite obviously in energy- and resource-hungry China’s favour.

China’s thrust into Africa began with normalisation of relations with Egypt in 1956. In the 1960s, following Taiwan’s successful ‘Project Vanguard’ in Africa (support for recognition of Taiwan), and against the backdrop of the Sino-Soviet rift, China supported liberation movements such as UNITA in Angola and ZANU in Zimbabwe. The need for better understanding of the continent started in the late 1970s under Deng Xiaoping. In the 1970s, China’s presence came to be identified with the Tazara (Tanzania-Zambia Railway) railroad. By the 1980s, notions of international solidarity and socialist brotherhood were already on the wane. Deng’s successor, Jiang Zemin set the tone for pragmatic cooperation in 1996 — a five-point proposal for the 21st century — encapsulating sincere friendship, treating each other equally, unity and cooperation, common development and looking into the future. Since then, there has been no looking back.

Current president Hu Jintao made three high-profile visits to the continent since he assumed office in 2003 — generously dropping off Chinese largesse in geo-strategic regions and embracing countries with a poor human rights record — selling weapons and securing oil concessions for its state-owned companies along the way. Under the rubric of upholding a non-intervention policy, China has embraced variegated regimes, including rogue countries such as Sudan, Zimbabwe, Nigeria, Libya, Somalia, all of whom have been damned by civil and human rights activists. China’s direct investment to Africa for 2000-2006 stands at $6.6 billion. The first batch of investment projects under the auspices of China-Africa fund, which China instituted after the 2006 Summit, totals over $90 billion.

Getting a share are countries like Angola, Africa’s second largest oil producer (after Nigeria) which got a generous amount to aid post-civil war reconstruction. Oil-rich Congo-Brazzaville got gratuitous aid for social and economic development. China has also pursued a strategic trade relationship with leading trade partner, South Africa.

Besides, Chinese oil companies are making hay — China’s Sinopec acquired Shell in Angola. Tipping the scale was a $2 billion soft aid package. China National Offshore Oil Corporation (CNOOC) purchased for over $2 billion a 45 per cent stake in a Nigerian oilfield. China National Petroleum Corporation (CNPC) is the largest investor in Sudan. Chinese entrepreneurs are also making a beeline for Africa investing in hotels, infrastructure and business.

Ironically, while the Chinese government is driving the wave into Africa, it has yet to socialise its citizens as racial stereotyping is rampant in China. “Black” carries negative connotations — Africa or Feizhou in Chinese can be translated into an evil continent. The Nanjing riots against Africans in 1988-89 saw coloured people at the receiving end. In a twist of sorts, with Chinese entering Africa in a steady stream, an anti-China wave has broken out in places such as Zambia (2006) and Lesotho (2007).

Ruffled by increasing Chinese presence in Africa is the western world, which is waking up belatedly to China’s scramble. While critics slam China’s policy, the western world has not exactly been a gallant no-strings attached aid-giver. While the US does not view Chinese engagement as a threat, but has ‘concerns’, it has been pragmatic enough to send Condoleezza Rice, Secretary of State to Tripoli, Libya, despite all the noise about Libya and Colonel Qaddhafi. The US supports its own ‘Golden Rule’— partnership and cooperation — as the stakes are high, with the proportion of African oil imported by the US rising to 16 per cent and expected to hit 25 per cent by 2015.

Most recently, Russia has sought to expand her influence and has committed to quadrupling bilateral trade to $12 billion by 2012. Russian oil giants such as Lukoil, Rosneft, Stroytransgaz and Russia’s largest gold miner, Norilsk, are striking deals already. France is already re-thinking its Africa policy and plans to mobilise $3.8 billion aid for sub-Saharan Africa. Japan has also jumped on the bandwagon, pledging $4 billion in soft loans and $1.9 billion in grants over the next five years.

India lags behind as it has just recently thrown in the gauntlet for Africa. This April, it hosted the India-Africa Forum, granted duty-free access to Indian markets for products from 34 African countries and doubled the size of credit lines to projects in Africa. It also pledged development aid to the tune of $500 million over the next five years. This, however, pales in comparison to China’s benevolence and strategic thinking, but perhaps it is never too late.

China has succeeded in mapping out a true ‘sweetheart deal’ — marrying strong national economic interests with philanthropic overtones, a pragmatic Chinese model. For now, India must contend to be at least one step behind.

The author is a Sinologist

(business-standard)

Africa, China safe from global economic turmoil

John Bailey
The new chief executive for Standard Bank/ICBC Strategic Partnerships, Craig Bond says
Africa and China’s economies will not be adversely affected by the current turmoil in the world economies.

Speaking in Beijing Bond says the two economies will survive the instability because China has a huge burgeoning economy and many foreign reserves, while Africa’s economies are growing and has enormous resources.

Relations between Africa and China are at an all time high. The trade volume between the two partners is expected to reach R800 billion by 2010. To fast track Chinese investment activities in Africa, a dedicated Chinese language Pan-African investment magazine has now been launched. Investors say the Sino-Africa partnership will substantially strengthen and their economies will withstand the current global financial crisis.

Bond says: “Because of the way China operates and because the way that business is done here is far more conservative than most Western countries, that are being hurt at the moment…. I think Africa has been relatively isolated because we are an emerging market and because we are not involved in the kind of investment that has given rise to the sub-prime crisis.”

Biggest emerging continent
The new magazine is likely to give Chinese investors and government officials more reliable investment information on Africa. A member of China Africa Business Council, Li zhang says: “Africa is the biggest emerging continent, while China is the biggest emerging country. The co-operation between these two parties which has the biggest dynamism and potential, will surely contribute to the development and momentum of the relations between the two sides.”

There is growing Chinese foreign direct investments in Africa especially in the resources sectors such as mining, oil and gas, but there is also an interest in telecommunications and infrastructure. The Chinese see the success of Africa as being crucial in their recipe that they want Africa’s economies to grow, because not only will it build a strong alliance between the two partners, but it will also create a big market for the future. The more affluent the African economies become, the better it is for China.

(sabcnews)

By Samuel Kamndaya

The failure to implement pro-business reforms is driving prospective foreign investors away from Tanzania, a top official warned yesterday.

Mr Emmanuel Ole Naiko, the Chief Executive Officer of the Tanzania Investment Centre, said countries with less “attractive opportunities and resources” were receiving more foreign direct investment.

Mr Ole Naiko was speaking during the launch of the World Investment Report 2008, which revealed the transfer of huge FDI to other countries in East and Central Africa.

He said the culture of politicking and negative public sentiments against foreign investors were among factors impeding the inflow of investments.

Public and private sector leaders entrusted with promoting development, he said “are good at talking and writing well-crafted development action plans but poor at executing them”.

He warned against the growing perception that Tanzania “can do without foreign investors who are just out to grab our country?s riches”.

Mr Ole Naiko said the country’s ability to attract FDIs had remained static in the past two years.

According to the report, Tanzania attracted foreign investments worth $600 million (over Sh600 billion) last year, up from $522 million (over Sh522 billion) in 2006. Mr Ole Naiko said his agency was targeting $700 million (Sh700 billion) by next year.

Tanzania lags behind neighbours Kenya, Democratic Republic of Congo (DRC), and Zambia and also Madagascar. Kenya attracted one of the largest investments over the period, rising from $50 million (over Sh50 billion) to more than $700 million (over Sh700 billion).

“Our problem is that we engage ourselves too much in debate but, for sure, we are very poor when it comes to implementation,” Mr ole Naiko said.

He was surprised that Zambia and Madagascar had surpassed Tanzania in attracting foreign investment.

Each recorded FDI flows of more than $1 billion in 2007. The report entitled, ‘World Investment Report 2008 ? Transnational Corporations and Infrastructure Challenges’, attributes the higher investment in Zambia to an upsurge in the copper mining industry.

Top on the list is Nigeria, with FDI worth $12.5 billion. Egypt is second with $5.7 billion and Morocco and Sudan are third and fourth, with $2.6 billion and $2.4 billion, respectively.

Equatorial Guinea and Algeria recorded $1.7million each, as Tunisia received $1.6million in foreign investment. Madagascar and Zambia each recorded FDI inflows of $1 billion. Ghana had $0.9 million, leaving Kenya and DRC, to rake in $0.7 million.

The investment promotion authorities said Tanzania was less attractive because of slow implementation of reforms started six years ago.

East Africa received the least FDI on the continent, $4 billion in 2007, a $1.6 billion increase over the 2006 level of $2.4 billion. West Africa got $5.5 billion, North Africa and South Africa, $12 billion and $7 billion, respectively.

Kenya’s FDI share rose from only $51 million in 2006 to $728 million last year due to large privatisation sales in the telecommunication and railway sectors.
Mauritius improved from $105 million to $339 million mainly due to tourism and policy reforms, which have enabled the registration of investments within three days.

Like Rwanda, which recorded increase in FDI from $16 million in 2006 to $67 million, Mauritius does not restrict skilled labour recruitment.

Uganda’s FDI declined while Burundi recorded no FDI for the whole year.

“There is no reason why Zambia and Madagascar should beat us,” said Mr Ole Naiko. He cited the potential investment areas as the abundant deposits of nickel, cobalt iron ore, gold/silver, industrial minerals like soda ash and petrochemical minerals such as coal.

“It is very difficult to understand that a newly independent country such as Mozambique has managed to develop its coal mines so fast, leaving us debating who should develop Mchuchuma coal and Liganga iron ore deposits,” Mr Ole Naiko said.

Six years ago, he said, public and private sector leaders came up with an action plan that identified impediments to investment but nothing much has changed. The country did not make any major reforms in business regulations last year, dropping by three slots in this year’s World Bank Doing Business report.

Tanzania dropped three points each in the categories of ease of doing business and paying taxes. It also dropped by two points in starting a business and employment.

Mr Ole Naiko said the public was generally ignorant of the motives for investment and cited a recent uproar over “mere changes in company names”.

While trade between China and Africa is growing, with an initial $5 billion China Africa Development Fund set aside, TIC boss Ole Naiko said the Chinese were being segregated in Dar es Salaam’s Kariakoo area.

“People in Kariakoo hate the Chinese just because they see them doing small businesses, while in the minds of locals, they are supposed to be big investors.”

(thecitizen)

Note: I came across on this article and loved it, so I want to share it with u. However I think he made a small thin mistake by saying that Ethiopia is home to the source of Nile river.  The source of Nile is in Burundi ( Rutovu).

Ethiopia, one of the oldest independent countries in the world, is a resource rich nation. Long regarded as the water tower of Africa, Ethiopia is blessed with many rivers and is home to the source of Nile, the world’s longest river. The country is the birthplace of coffee plant and Africa’s largest coffee producer and the World’s fifth largest. Ethiopia is also rich in cattle, the latest data from UN’s Food And Agriculture Organization (FAO), places Ethiopia 6th in the world with 43 million cattle. The country is also home to one of the world’s largest beehives and it is no exaggeration to say Ethiopia is indeed land of milk and honey. We have compiled the following top 10 lists from the latest FAO data on Ethiopia and we share it with our readers.

Despite all its natural resources, Ethiopia suffers from frequent droughts and political upheavals, but the focus of this blog is in Ethiopia’s potential to be not just a military power but also an economic power in Africa.

Without further ado here are the Top 10 Lists.

Top 10 Cattle Countries (2007)

1. Brazil 207,170,000
2. India 177,840,000
3. China 116,861,393
4. USA 97,003,000
5. Argentina 50,750,000
6. Ethiopia 43,000,000
7. Sudan 39,500,000
8. Pakistan 29,600,000
9. Mexico 29,000,000
10. Australia 28,400,000

Top 10 Beehive Countries

1. India
2. China
3. Turkey
4. Ethiopia
5. Iran
6. Russia
7. Argentina
8. Tanzania
9. Kenya
10. Spain

Top 10 Camel Countries

1. Somalia
2. Sudan
3. Ethiopia (2,300,000)
4. Mauritania
5. Kenya
6. Pakistan
7. Chad
8. India
9. Mali
10. Niger

Eritrea ranks 23rd with 76,000 camels

Top 10 Coffee Producers

1. Brazil
2. Viet Nam
3. Colombia
4. Indonesia
5. Ethiopia
6. Mexico
7. India
8. Peru
9. Guatemala
10. Honduras

Top 10 Donkey Countries

1. China
2. Ethiopia (4,265,194)
3. Pakistan
4. Mexico
5. Egypt
6. Iran
7. Brazil
8. Nigeria
9. Burkina Faso
10. Morocco

Top 10 Goat Countries

1. China
2. India
3. Pakistan
4. Bangladesh
5. Sudan
6. Nigeria
7. Iran
8. Ethiopia (18,000,000)
9. Mongolia
10. Indonesia

Top 10 Horse Countries

1. United States of America
2. China
3. Mexico
4. Brazil
5. Argentina
6. Colombia
7. Mongolia
8. Ethiopia (1,600,000)
9. Russian Federation
10. Kazakhstan

Top 10 Sheep Countries

1. China
2. Australia
3. India
4. Iran
5. Sudan
6. New Zealand
7. United Kingdom
8. Pakistan
9. Turkey
10. South Africa
11. Nigeria
12. Ethiopia

Top 10 Papaya Producers

1. Brazil
2. Mexico
3. Nigeria
4. India
5. Indonesia
6. Ethiopia
7. Congo, Democratic Republic of
8. Peru
9. Philippines
10. Venezuela

Top 10 Seaseme Seeds Producers

1. India
2. Myanmar
3. China
4. Sudan
5. Uganda
6. Ethiopia
7. Nigeria
8. Paraguay
9. Bangladesh
10. Tanzania

Top 10 Chickpea Producers

1. India
2. Pakistan
3. Turkey
4. Australia
5. Iran
6. Myanmar
7. Canada
8. Ethiopia
9. Mexico
10. Iraq

Top 10 Nut Producers

1. United States of America
2. Indonesia
3. Mexico
4. Ethiopia
5. China
6. Australia
7. Guatemala
8. Portugal
9. Thailand
10. Philippines

Top 10 Sorghum Producers

1. United States of America
2. Nigeria
3. India
4. Mexico
5. Sudan
6. Argentina
7. China
8. Ethiopia
9. Burkina Faso
10. Brazil

Top 10 Wheat Producers

1. China
2. India
3. United States of America
4. Russian Federation
5. France
6. Pakistan
7. Germany
8. Canada
9. Turkey
10. Kazakhstan

Ethiopia ranks 27th in the world in wheat production and 2nd largest wheat producer in Africa after Egypt.

Top 10 Maize Producers

1. United States of America
2. China
3. Brazil
4. Mexico
5. Argentina
6. India
7. France
8. Indonesia
9. Canada
10. Italy

Ethiopia is the 18th largest producer of Maize in the world and 4th largest maize producer in Africa after Nigeria, South Africa and Egypt.

Other rankings

Ethiopia is the 16th largest producer of Avocados in the world
* 18th largest producer of Sweet Potatoes
* 19th in Barley
* 22nd in Dry Bean
* 41st in Banana


Data is from Food And Agriculture Organization of the United Nations. The latest data is from 2007.

(nazret)

The African Union (AU) and a Chinese firm signed a contract agreement on Wednesday for the construction of the AU Conference Center.

The signing ceremony at the AU headquarters in Ethiopia’s capital Addis Ababa took place in the presence of some AU officials and a thirteen-man Chinese delegation, led by Chinese Ambassador to Ethiopia Gu Xiaojie, who came to witness the event.

The Chinese firm, China State Construction Engineering Corporation, in July won a bid to build the Chinese government-aided AU Conference Center.

The conference center comprises a 99.9-meter-high office building and a 30-meter-high conference hall with a vault totally covering 11.3 hectares.

At a signing ceremony, Erastus Mwencha, deputy chairperson of the AU Commission, said the signing ceremony of the construction of the new AU Conference Center is an exciting moment and a time to reflect on the existing friendship between China and the AU.

“It is a significant step to realize the project,” said Mwencha, while thanking the Chinese government for their commitment to ensuring the effective implementation of the project.

He further expressed, on behalf of Chairperson of the AU Commission Jean Ping, the satisfaction and commitment of the AU to work hand in hand with the Chinese delegation in facilitating and ensuring the realization of the project within the three-year deadline.

Meanwhile, Mwencha announced that a high-level Chinese delegation will arrive at the AU headquarters on Nov. 7 for the actual groundbreaking ceremony of the construction of the conference center.

(ethiopianreview)

South Korean electronics and home appliance manufacturer LG has invested US$50 million in East Africa in order to gain a foothold in the market for its mobile-phone handsets.

The investment will be used to import a range of premium mobile handsets, create awareness through marketing the handsets and carry out market research for the products, said Byung Su Lee, LG Nairobi Liaison Office general manager.

With East Africa being an emerging mobile-phone market, LG has earmarked $2 million for marketing in Kenya, Uganda, Tanzania, Burundi and Rwanda, Lee said.

LG hopes to beat competition by cheap handset makers from the Far East by providing handsets targeted at the premium low, medium and high ends of the market, he said. The company projects a 50 percent increase in sales, from the 500,000 handsets sold last year to 1 million by 2009.

LG has also invested in longer-lasting batteries for use in rural areas, where electricity penetration is low.

“The longer-lasting battery power allows for more convenient use of the high-technology features like cameras, MP3 players, radio and video players,” said LG regional marketing manager Anthony Hutia.

(IDG News)