China’s investments in Africa accounted for about a third of total foreign direct investment (FDI) and jobs created by these projects on the continent in 2016, according to a study by consultancy EY (Ernst & Young).
The EY study, entitled “Redefined Link” counted 66 Chinese investment projects in Africa, more than double the previous year, after the United States (91 projects, 5.2% less) and France (81 projects, +39.7%).
By value, Chinese projects totalled US$36.1 billion, 38.4% of the total and created 38,417 jobs, 29.7% of the total in the period.
“By 2016, jobs created by Chinese FDI projects hit a record high, more than double that in 2015 and more than three times the number of jobs created by the next largest investor, the US. This underscores the creation of jobs and the impact of Chinese FDI in Africa,” said EY.
“Across Africa, Chinese investors in 2016 have taken an active role in the technology, media and telecommunications, automotive and business services sectors,” said the study, noting that Sino-African trade has grown rapidly, and that China is Africa’s largest trading partner.
In 2016, China’s exports to Africa totalled US$82.9 billion, while imports from Africa were valued at US$54.3 billion.
Most of China’s financial flows to Africa, “have been in the form of development aid through lending and bilateral aid.”
EY’s figures show that since 2005 China has invested capital in 293 FDI projects in Africa, totalling US$66.4 billion and created 130,750 jobs.
In July 2016, it said, Chinese companies and banks reached US$17 billion in preliminary cooperation agreements with their African counterparts in sectors such as infrastructure, energy and technology.
EY data also pointed to the diversification of Chinese investment, “covering both resource-rich countries such as South Africa, Nigeria and Angola, and agricultural exporters such as Kenya.”
In addition to trade and FDI, it said, Chinese companies and state-owned entities have financed and built many infrastructure projects across the continent, including ports, roads, railways, dams, telecommunications networks, and airports.
The “One Belt, One Road” initiative aims to lay the foundations for the next phase of the Sino-African economic relationship, and EY said the initiative “could prove to be advantageous for both sides, positioning Africa as an appropriate channel for China’s surplus savings and infrastructure capacity.” (macauhub)