Commitment to Africa's Growth

Business people in Africa are very confident about the African growth story that now seems ready to come to fruition, and China is playing a big role in transmitting its own growth story to the budding African one.

Africa's time and Africans know it

In the midst of a period of economic and regulatory reform since the end of the Cold War that have resulted in impressive economic growth and an improving business environment, Africa seems to be on the brink of an economic take-off, and Africans themselves are more confident than ever about the economic outlook for their continent. This is one of the findings of Ernst & Young's 2011 Africa attractiveness survey, which tracked perceptions of investing in Africa among 562 business leaders in 38 countries.

In terms of which industries have the highest potential for investment in Africa, a large majority (44 percent) of respondents pointed to extractive industries, yet the survey also identified a diverse range of sectors that are beginning to emerge as attractive investment options, including tourism, financial services, telecommunications and consumer products. A total of 68 percent of respondents in the survey believed that Africa has become more attractive for business, yet African respondents in the survey were overwhelmingly positive about Africa's progress in the last three years, with 86 percent noting an improvement. Around 75 percent of business leaders were positive about Africa's prospects for the next three years, and 88 percent of respondents from Africa had a positive outlook in this regard. Yet the vast majority (71 percent) believed that Africa will provide high and robust growth potential in more than three years, thus taking a more long-term view.

China prides itself on taking such a long term view in its expansive business dealings with Africa. Through the Forum on China-Africa Cooperation (FOCAC), China has established structures for providing Africa with development assistance over the long term, such as concessional loans, training programs, and aid to small and medium-sized enterprises. Chinese construction firms are active across the continent in building civil infrastructure that will be used by the people of Africa long into the future, and China is also constructing seven special economic zones in Africa that will create jobs and boost industrial development. Such zones played an instrumental part in China's own long term development, and China is now imparting this know-how to these zones in Africa, which are located in Nigeria (2), Mauritius, Uganda, Ethiopia, Egypt, and Zambia (with discussions underway for more zones to come in Tanzania, Mozambique and Angola. In these ways, China is making its own significant contribution to the positive outlook among African business people. 

The ChinAfrica Econometer is produced by The Beijing Axis, a cross-border business bridge to/from China in four principal areas: Commodities, Capital, Procurement, & Strategy.

For more information, please contact: Barry van Wyk, barryvanwyk@thebeijingaxis.com

www.thebeijingaxis.com

➲ ZAMBIA _MAY: A state-owned Chinese bank will lend Zambia $180 million to upgrade 170 km of road leading to Zambia's Mpulungu harbour at the southern tip of Lake Tanganyika. The upgraded road will boost trade with Rwanda, Burundi, the DRC and Tanzania.

➲ ZAMBIA_JUNE: Chinese bank ICBC will grant a loan of $285 million to Zambia for the development of a new electricity transmission line. The new line will connect Zambia with Tanzania and Kenya.

➲ KENYA_JUNE: Chinese motor vehicle manufacturing company Foton Motor Group is constructing a local assembly plant along the Mombasa road that will produce around 5,000 pick-up vehicles annually. In June, Foton rolled out its first pick-up vehicles for the Kenyan market.

➲ SOUTH AFRICA_MAY: CITIC Group, China's largest state owned investment company, along with some of its partners agreed to buy Gold One International Ltd. for about $469 million, with CITIC Group in the process also gaining gold assets in South Africa