Trans-national transport network in Africa receive investment of US$1 trillion lead by China

13 January 2014

Trans-national transport networks, which cross countries such as Angola and Mozambique, are expected to be the main beneficiaries of an investment of US$1 trillion by China in Africa over the next 12 years.

“We have a lot of money to invest,” the chief country risk analyst of the China Export Import Bank (ExIm), Zhao Changhui, said at the end of last year at the African Investment Summit (Hong Kong), which ended with a commitment of investment of US$1 trillion by China and state banks in beneficiary countries.

Of this total, 80 percent will come from the ExIm bank and will be used for construction of trans-national highways and airports and, according to Zhao, US$500 billion may be used for the project to link Cairo to Cape Town by rail.

According to Robert I. Rotberg, a professor at the Paterson School of International Affairs of Carleton University (Ottawa, Canada), China’s investment and support in Africa will become “even more valuable” over the next few years for continued economic growth, with the expected expansion of the African population, in countries such as Nigeria or the Democratic Republic of Congo.

“Thankfully China seems focused on boosting its partnership with key countries in Africa (…) Chinese investment may help the African population to continue to achieve high standards of living and greater economic independence,” said Rotberg in an article in the China-US Focus newsletter, analysing the meeting in Hong Kong.

As a sign of the importance given to relations with Africa, China’s Foreign Affairs Minister, Wang Yi, chose Africa as the destination for his first visit in 2014, which ended on 11 January. His visit included Ethiopia, Djibouti, Ghana and Senegal.

“This is also the first visit by the minister to Sub-Saharan Africa after China’s new administration,” noted the spokesman for the Chinese Foreign Affairs Ministry, Qin Gang.

At the end of last year a new economic and technical cooperation agreement was signed in Luanda by the Secretary of State for Cooperation, Ângela Bragança, and the Chinese ambassador to Angola, Gao Kexiang.

As part of the agreement, China will provide non-refundable aid to the Angolan government of 200 million yuan, which will be used to rebuild the Luanda General Hospital.

Speaking to the press, Bragança said that this was another step in the consolidation of the strategic partnership between the countries, and the Chinese diplomat said that signing the agreement showed Beijing’s interest in remaining involved in the process to develop Angola.

China has foreign reserves of around US$3.5 trillion, which can be applied to direct investments in African countries, commercial loans or financial assistance.

Amongst the projects to be negotiated are an “air corridor” of the Democratic Republic of Congo, made up of one or more airlines and a network of regional airports that will allow the country to overcome its difficulties in terms of transport.

According to Rotberg, the ExIm bank will also focus on agricultural investments given the large amount of available arable land as well as creating an industry, the value of which may jump from US$280 million to US$880 million over the next few years.

“As sub-Saharan Africa will be amongst the fastest growing regions of the world until 2100, something that China can do to help the continent to have better infrastructure, grow food, electrify its grids and get drinking water for consumption and irrigation, will improve the wellbeing of Africans and the prosperity of the countries,” the researcher said. (macauhub)