BuaNews (Tshwane)
18 March 2007
Addis Ababa — The Secretariat of the New Partnership for Africa's Development (NEPAD) said Chinese investment and its huge infrastructure projects in Africa are an opportunity for the growing continent.
Chief Executive of the NEPAD Secretariat, Professor Firmino Mucavele made this observation this week at an expert group meeting here, entitled "Investment for African Productive Capacity."
The meeting was organised by the United Nations Industrial Development Organization (UNIDO) and the African Union (AU).
Asked about the pros and cons of Chinese investment in the continent, Professor Mucavele said that a lack of infrastructure limits investment expansion in Africa.
"Lack of adequate infrastructure hinders private sector initiatives and increases their investment costs. China is giving Africa infrastructures [such as] railways, roads, and others which other development partners are not providing."
The continent's leaders and China convened the first Africa-China Forum last year, which served as a platform to strengthen their partnerships and discuss further cooperation in politics, economics and aid amongst others.
High level Chinese delegations have been visting Africa in recent months conducting historic visits to a number of countries. These have included tours by President Hu Jintao and Premier Wen Jiabao.
The head of the secretariat said that Africa is very different from what it was six years ago, in that it has exceeded a 5 percent annual economic growth rate for the past three years.
This, he said, indicated an end to decades of economic stagnation.
"Foreign Direct Investment (FDI) reached 31 billion USD in 2005 surpassing Official Direct Aid (ODA) for the first time. While food processing, textiles and services now attract a growing proportion of foreign investments from new source countries such as China, India, Malaysia and South Korea," Prof Mucavele said.
China's high levels of reserves and capital to promote investment would lead to the promotion of comparative economic advantages, he said.
Prof Mucavele did however point out the need for changes in Africa.
"The norms, institutions and how business runs in the continent should be improved to avoid any problems with the Chinese investment in Africa, and on the other side there are some agreements in some areas that limit imports from China," he said.
He also stated that Africa should emphasise transforming its economy and increase the use of comparative advantages and competitiveness in the market, rather than worrying about the threats of Chinese investment and imports.
"The problems we have with China exist in our relations with the European Union, the United States and others. What we need is to work together, and NEPAD and China are working on the problem together," Prof Mucavele said. - BuaNews-NNN
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It is no doubt that chinese investment in africa, both financially and infrastructural,is an obvious opportunity in relation to the growth of the continent.My question is, is it fair or do they have something else under their sleeves?