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We all know that China is deeply invested in Africa. There is, at least on the surface, a mutually beneficial relationship to be had between China and individual nation states. China has money, the capacity to invest and build in Africa, and tends not to be too concerned with such niceties as human rights. Africa has natural resources, a craving for outside investment, and a desire to work with investors who won’t go about encroaching on national sovereignty.
So what are the countries that most benefit from Chinese investment and partnership? The Christian Science Monitor has a slideshow of the top five. The top three will come as no surprise: Angola, Nigeria, and Sudan are big countries with vast (and reasonably developed) oil resources and are happy to partner with China, which is happy to extract the oil while ignoring the political situation on the ground. The last two are something of a surprise. Mauritania has experienced two coups in the last decade, but it seems that on all political sides there is agreement on a desire for a heightened Chinese presence in a country that has both burgeoning reserves and an ambitious port project.
President Zuma in China
Coming in fifth is Botswana, which does not have oil like the other four, but it does have abundant natural resources, a fast-growing economy in a stable society, and a desire for strong investment partnerships. China is happy to reciprocate. Anyone who has spent time in Gabarone and has visited the University of Botswana or the National Stadium has seen the almost stunning volume of building that Chinese companies are carrying out.
Chinese involvement in Africa is a dual-edged sword. After all, looking beyond the West for investment and other partnerships makes complete sense, especially in a post-Cold War world where the bilateral struggle for dominance by the superpowers that led to considerable (if oftentimes deleterious) attention from the United States and Soviet Union gave way to not-so-benign neglect. But the question remains whether many African states are inviting unintended consequences much like those they faced during the Cold War when they largely represented pawns in a geo-political game. It’s savvy to look east as long as doing so does not preclude continuing to peer westward as well. Indeed, looking both ways and not going all-in with any particular partner, however seductive, might just provide the best path for true growth, development, and political autonomy.
About four decades ago, the Chinese braved the natural elements to help construct what has come to represent one of the great symbols of Sino-Africa cooperation – the nearly 2,000 kilometer Tazara railway stretching from land-locked Zambia through Tanzania to the coast. Delivered in the midst of the Cultural Revolution, this gift represents China’s agenda to reach out even during turbulent times in its history. This expensive project also exemplified a major step towards enhancing South-South cooperation, which had been initiated in 1955 at Bandung, Indonesia.
Last month, China once again delivered a symbolic structure in the form of a $200 million headquarters to house the African Union. Indeed, this superstructure has transformed the skyline of Addis Ababa, but more importantly, has added a crucial layer to the Sino-African discourse – helping connect Africa’s present to its past.
From stadiums in southern Africa through government offices and cultural buildings in western Africa to hydroelectric projects in the north of the continent, both apologists and critics of China’s engagements in Africa have found pillars for their arguments in these structures. Mostly, these passionate arguments concern issues around the ratio of Chinese to African labor at the sites of these projects, the nature of funding involved in a particular project, the quality of these structures and the motives behind Beijing’s seeming embrace of all things African. These are pertinent discussions to have, but should be well placed in the thicket of poignant messages that these strategically placed contributions (including the AU headquarters) by China send to stakeholders of the African continent. These gestures hold subtle insights and implications for understanding Sino-Africa relations, particularly for the West.
First, the versatility of China’s approach in engaging African countries is partly responsible for its surge as one of the major economic influences on the continent. From its earlier encounters with the continent at the 1955 Bandung Conference to present, China has played different roles in its relationship with African countries. Beijing has emerged from its largely ideologically driven encounters with African countries to become an economically driven pragmatist, which is largely manifested in its resource and market deals as well as its vivid role as “constructor-in-chief.”
In spite of the challenges that lurk in the margins of China’s resource deals and access to markets, which veritably range from language barriers to organized anti-Chinese protests and kidnapping of Chinese workers, Sino-Africa engagements have progressed well along these contours. In September 2011, the world expectantly watched as Zambian oppositionist Michael Sata won that country’s presidential elections riding on the wave of an anti-Chinese campaign. After the political dust settled, it became clear that the Chinese haven’t been spooked by Sata’s pre-election anti-Chinese rhetoric as Beijing’s interest in the copper industry even further deepened with companies such as Jinchuan Group and Non-Ferrous China Africa (NFCA) bolstering their investments in copper in Zambia.
Interestingly, Sata’s harsh anti-Chinese stance has given way to a more cooperative posture as he emphasizes the importance of foreign investments and cautioned all foreign investors (including the Chinese) to adhere to the labor laws, during his inaugural address. There’s certainly growing opposition to China’s increasing presence in Zambia and other African countries, but China and its investors find some solace in the support from the African elites and large portions of the population who are either content to have a committed partner-in-development or intrigued by the dedication of the Chinese in completing projects on schedule.
The AU's Chinese-built base is not only a source of controversy but also a symbol of the challenge facing African enterprise
Sleek and glinting in the sun, combining a traditional office tower with a more unusual spherical conference centre, shaped like a flying saucer, the new African Union(AU) headquarters in Addis Ababa, the Ethiopian capital, is an impressive symbol of modernity.
Some, however, harbour mixed feelings towards the complex, which is scheduled to be opened by President Hu Jintao on Saturday, the eve of the Au summit. Why was it, they ask, that the 20-storey main office building and conference centre, which can seat more than 2,500 people, was built by a Chinese company with Chinese labour, rather than by Africans?
The new AU building, the physical embodiment of China's complex links with the continent, is thus both a source of pride and reproach for Africans.
"It's a beautiful, beautiful building full of grandeur and it will save a lot of money because it will help in the co-ordination of the AU's business," said Michael Orwa, a project co-ordinator for State of the Union (Sotu), a group of NGOs that wants the AU to live up to its rhetoric of unity and progress. "It's a shame the AU was not able to build it itself."
China has made its presence felt throughout Africa, building a bridge in Niamey, Niger, constructing a "super-highway" in Nairobi, Kenya, digging for oil and minerals from South Sudan to Zambia, and flooding the continent with cheap goods. The last of these activities is a source of concern to officials at the African Development Bank (AfDB).
"Cheap Chinese goods cause a lot of damage," said Gerald Ajumbo, principal trade officer at the AfDB. "They hurt consumers as they can be substandard – a battery with a very short battery life, for example. They hurt producers, who lose market share. And they have an impact on government revenues, as governments do not collect tax on these goods."
There is suspicion that China is dumping its goods in Africa, but so far no African governments have made any official complaint to the World Trade Organisation, the trade watchdog. This may be because such cases are complex and costly to pursue, because governments do not want to offend a powerful benefactor, or – more likely – both.
The African Union's Addis Ababa headquarters, scene of the AU summit, are a source of both pride and reproach for Africans. Photograph: AU Commission
AfDB economists bemoan the lack of competitiveness and productivity of Africa's private sector, reproaching private companies for their reluctance to invest and reliance on governments to do so instead. One way to boost competitiveness and productivity, they say, is to increase trade between African countries – precisely the theme of the AU summit.
Most African exports are still sent to markets in industrialised countries; only 10-12% go to other African countries. This is less than half the level in other emerging markets, and half the continent's intra-regional trade occurs within the Southern African Development Community (SADC), dominated by South Africa. The AU has set an ambitious timetable of 2017 to realise a Cape-to-Cairo free trade zone encompassing 26 countries, 525 million people and $1tn in output.
It is a grand plan and, given the precarious nature of the global economy, a timely one.
"It is a good time to increase intra-Africa trade and generate badly-needed jobs," said Alex Rugamba, director for regional integration and trade at the AfDB. "There is a huge opportunity at a summit like this; much depends on the leaders gathered here to provide the momentum for us footsoldiers."
There has been some progress. Two of Africa's eight regional trading blocs, the Common Market for East and Southern Africa (Comesa) and the East African Community (EAC), already have tariff- and quota-free trade. Efforts have been made to cut down time at border crossings. Zambia and Zimbabwe have reduced the time trucks spend at their border crossing at Chirundu from a week to three hours. Work is progressing on a north-south highway between Durban, South Africa, and Dar es Salaam, Tanzania. Free trade zones would also help deal with cheap Chinese products, since a tariff belt around African markets would have the effect of making Chinese goods more expensive.
A Cape to Cairo market sounds like a great idea for African producers and consumers. For Orwa, the trick is to make it happen. The proposed African grand freetrade area, which would encompass 26 countries, 525 million people and $1tn, risks becoming another flight of fancy and rhetoric that goes unmatched by concrete actions. Pointing to the looming humanitarian crisis in the Sahel, Orwa argues that if the African countries had lived up to their previous pledge of spending 10% of their budget on agriculture, perhaps the continent would have achieved food security by now. In another example of unfulfilled promise, he points to a failure to ratify and implement a protocol on a code of justice, creating an African version of the International Criminal Court. If that had been the case, Kenya would not have suffered the humiliation of sending Kenyans to stand trial at the Hague.
"We want the AU to go beyond trophy projects like this new headquarters," said Orwa. "We want the AU to ratify and implement policy declarations and instruments so that Africans can see tangible benefits. We want an AU of the people, for the people and not just for states and leaders."
Mark Tran, a reporter at The Guardian on international news, previously worked as a correspondent for the Guardian in Washington (1984-1990) and New York (1990-1999).
USA 5 : China 1 : Africa 0. It's Time to Get Our Game On
Team China has exactly one objective in Africa: the Chinese want to capture as much of the natural resource base as is possible to continue to fuel China's economic growth. Because the Chinese are singularly focused on this objective, they are incredibly efficient. Their development policy, their trade policy, their above board payments, and even their corruption are all perfectly aligned. They are a formidable opponent on this continental battlefield.
Team US is in disarray. Part of this stems from the fact that U.S. citizens are among the most generous people in the world. As a result, we have a multitude of agendas in Africa. We are interested in eliminating disease, decreasing poverty, improving education, and putting an end to child slavery. We are interested in ending the rape crisis in the Congo, saving the gorillas in Uganda, stopping the genocide in Somalia, and eradicating malaria across the continent.
We are interested in these things while simultaneously recognizing that we too can benefit from Africa's vast natural resources. Our cheap cell phones, our stunning diamonds, our superior Gibson guitars, not to mention some oil, are all made possible by the same natural resource base that China is trying to make away with.
In fact, US tops Germany and China by about 200 billion as the world's top exporter. Frankly, we simply don't have a domestic natural resource base that is large enough to maintain that level of production over the long term so we have to source the supplies from developing countries.
But, our interest in Africa isn't all work and no play. Have you ever been on a safari? It is fabulous. Mind blowing. Life changing. We want to visit Africa, spend our tourist dollars, photograph people, hunt wildlife, check off birds on our bird lists, buy souvenirs, and accrue fantastic stories. We spend billions of dollars to do these things.
Finally, we need an African continent that is reasonably stable because it has direct bearing on our own national security. The Department of Defense spends more than a few dollars in ensuring that poverty and disease don't translate into more terrorism training camps.
In summary, we have economic, development, philanthropic, recreational and security interests in Africa all of which are predicated on the same thing the Chinese want: the natural resources.
The problem is that while China has the singularly focused, narrowly honed strategy, we have absolutely no coherent policy on natural resource management whatsoever. Effectively, our right hand doesn't know what our left hand is doing. Sometimes our right hand doesn't even know there is a left hand.
For example, in Tanzania, the famed Serengeti generates over $1 billion in tourist dollars a year and employs 600,000 people. The Chinese are financing a road that will run right through the middle of the park threatening the tourism industry.
Simultaneously, Tanzania is in the middle of a drought and the Tanzanians are upping their development aid requests to the U.S. This 11th hour battle makes no sense: the Tanzanians are going to work with the Chinese to destroy one of their biggest revenue sources and then ask us for money to save their poor who are facing a seemingly interminable drought. What is especially mind blowing is that the Tanzanians have been asking for help to build a road, any road, for the last 14 years, but we couldn't get our act together to come up with a coordinated plan -- and we still can't.
Further afield, the South Pacific Tuna treaty collapsed last week because several businessmen were able to co-opt the playing field, and the natural resource management community was nowhere to be seen.
In short, Papua New Guinea wanted tuna to be more sustainably sourced because catch data shows a steep decline in the numbers of fish left. Bigeye Tuna catches, for example, are down over 50 percent.
A couple of U.S. businessmen, who own Taiwanese companies, thought it would be handy if they flew the U.S. flag on 25 of their Taiwanese vessels allowing them to dodge rules such as boats should be built in the U.S., vessels should carry U.S. crews, and tuna should be canned in the United States or U.S. territories.
While returning little value to the U.S. taxpayer and/or consumer, the businessmen benefited from treaty perks such as a $1600 per U.S. vessel cost to fish as compared to Japan's $6000. The treaty fell through because the conservation folks, Commerce, Department of Defense, and State Department have absolutely no idea what their position is and taxpayers are left with a fishery on the verge of collapse, 25 years of hard work in shambles, and millions of U.S. philanthropic and taxpayer dollars wasted.
What do we do about this quandary? Three things:
First we encourage the US Government to get organized. One way to do this is build a unit that coordinates efforts between departments. While this is a new idea as pertains to management of natural resources, it has precedents in different shapes and sizes. Such coordination in effort won't cost more, in fact, it will save money. Efforts to do this are underway and should be supported.
Second, civil society, including NGOs, foundations, and corporations, need to work across sectors to plan, implement, and monitor efforts. There are a lot of organizations trying to make a lot of good things happen. All it takes is one Chinese road through a project area to undermine the thousands, in some cases millions of dollars that are being invested. The only way to garner enough strength to stop the Chinese is to combine financial and technical resources and work together as a team.
Finally, we have to recognize that careful use of natural resources and smart economic planning are necessary to help developing countries climb their way out of poverty. This means listening to the needs and objectives of developing countries and ensuring that solutions are found that support the big picture. It is hard to see the big picture when your citizens are dying from famine, disease and drought. Our generosity and economic policies can help bridge the divide between the short term needs and long term goals that poor countries often face.
If we are going to play this game we have to play smarter and faster than the Chinese. These natural resources in Africa, and elsewhere, are finite. The solutions are there, the money is there, the technology is there, we just have to get our lineup in order.
Jamie Bechtel is an American citizen and the Co-Founder and CEO of NEW Course and is a highly regarded leader in international conservation. Her work has led to strategic advances in the fields of conservation, sustainable finance, and biology.
A sign of growing Chinese presence in Nigeria and Africa
It was just a matter of time before Chinese currency Yuan will join the family of currencies traded in Nigeria’s foreign exchange market. Therefore it was no surprise when Nigeria's central bank made it official that Chinese Yuan has been included “to a list of currencies that can be used for trade settlement in the domestic foreign exchange market as trade flows with Beijing increase.”
Chinese Yuan will join other 13 currencies including the U.S. dollar, Euro, British Pound and Japanese Yen that are traded in Nigeria’s domestic foreign exchange market. Many other countries including Russia, Turkey, South Africa's Standard Bank and now Nigeria are offering Yuan for bilateral exchange and trade in their local respective markets.
Apart from China’s encouragement to trading partners to employ the use of Yuan for trade transactions and settlements in the local exchange market; it does make sense at this point in time for Nigeria to make the strategic move of expanding the number of currencies in the domestic exchange market with latest inclusion of Yuan. For China has become a major trading partner with Nigeria, the second largest economy in Africa.
China growing bilateral relationship with Nigeria is progressively stronger, a testament to a successful strategic partnership. The increasing level of trade and investments between the countries are growing tremendously. According to Chinese Ambassador to Nigeria H.E Mr. Deng Boqing, “The volume of trade between Nigeria and China recorded a significant improvement, rising by 41.8 per cent to N540 billion ($3.67 billion) in the first half of 2010. The trade volume between the two countries grew by nearly 300 per cent since 2004 and reached the peak of $7.2 billion in 2008.”
China with over $2 trillion foreign reserve is making her presence felt heavily in Nigeria. The flowing in of Chinese money and investments in Nigeria is staggering, if not mind bugling. Short while ago, China signed a $23 billion ‘sunshine deal’ to build four major oil refineries in Nigeria. While in July of 2010 China also signed another business deal to build $6 billion oil refinery in Lagos. It was also recorded that China direct investments in Nigeria has exceeded $7 billion and China is also committing $20 billion investments on Nigeria’s infrastructures. Recently China Export-Import Bank signed $900 million loan with Nigeria.
China is a significant player in Nigeria’s economic landscape with the numerous investments and deals in the country; she has garnered a great deal of respect in Nigeria. China has truly proven to herself and to Nigeria that she is committed partner in country’s development for a long term. In return China needs natural resources especially oil from the oil-rich Nigeria for fueling her economic expansion and feeding the mountainous appetite of her local industries.
With level of China’s contributions to Nigeria’s bulging economy, it is not really a big deal after all for Nigeria to trade Chinese Yuan in the domestic foreign exchange market.
On part of China there will be a growing confidence of their presence in Africa and Nigeria in particular. China can flex its financial and economic power in Nigeria and the admission of Chinese Yuan in domestic currency market shows that China is a significant player in Africa. Although the presence of Yuan and other currencies in Nigeria’s market will decrease the demanding pressure on dollar, the principal trading currency in the market.
The point must be that dollar will not be displaced in the market by any other currency in the Nigeria’s domestic foreign exchange market. Dollar continues to be the dominant currency due to its value, universal acceptance and in its surging demand by the local banks and business community of Nigeria.
The volume of Yuan at initial stage maybe small, but progressively it will get bigger because the presence of China with regards to trade and investments will drive the demand for Yuan. The Nigerian local business communities are grateful of the arrival of Yuan in the market for they do not have to buy other currency first and convert it to Yuan later.
Chinese Yuan presence in the baskets of currencies used for transactions in the local African markets will continue to increase. The massive economic presence of China in Africa will continue to mature and enhance as Africa leverage the economic bilateral relationship with China to develop her economy.
Full Text: China-Africa Economic and Trade Cooperation (5) VII. Giving Full Play to the Guidance Role of Forum on China-Africa Cooperation (FOCAC)
Founded in 2000 by China and Africa, FOCAC has formed dialogue and cooperation mechanisms at various levels such as ministerial conferences, senior official meetings and entrepreneurs' conferences. So far, four ministerial conferences and a summit have been held within this framework. Owing to the joint efforts of China and Africa, FOCAC has become an important platform for collective dialogue and an effective mechanism for practical cooperation between China and Africa. It enhances political mutual trust, leads to cooperation, especially economic and trade cooperation, and expands and deepens China-Africa relations, and raises the level of their relations.
Since the first FOCAC Ministerial Conference in 2000, the Chinese government, focusing on the challenges and opportunities facing China and Africa, has taken a series of steps to deepen China-Africa economic relations and trade on the basis of long-term cooperation, mutual respect and consultation on an equal footing. These steps, fitting the needs of Africa, represent the practical spirit and creative endeavors of the Chinese government.
At the first FOCAC Ministerial Conference China announced it would reduce or cancel African countries' debts to China, and encouraged Chinese companies to invest in Africa and train professionals for Africa. At the second FOCAC Ministerial Conference in 2003, China pledged to increase aid to Africa, enhance cooperation in the sphere of human resources development and give zero-tariff treatment to some of the exported products from the Least Developed Countries (LDCs) in Africa with diplomatic ties with China.
At the Beijing Summit and third Ministerial Conference of FOCAC in 2006, China announced an eight-point plan for strengthening practical China-Africa cooperation and supporting the development of Africa, including increasing assistance; providing preferential loans; helping the African Union (AU) to build a convention center; raising the number of African export items to China eligible for zero-tariff treatment; setting up a China-Africa Development Fund; building overseas economic and trade cooperation zones in African countries; setting up demonstration centers of agricultural technology; and setting up malaria prevention and treatment centers. All the above-mentioned eight commitments were fully in place by the end of 2009 with the joint endeavors of China and Africa.
In 2009 China declared another eight-point plan at the fourth FOCAC Ministerial Conference, covering agriculture, environmental protection, investment promotion, debt reduction and cancellation, wider market access, education, and medical care and public health. These eight commitments, focusing on improving the living standards of the African people, enhancing cooperation in agriculture and human resource development and raising Africa' s self-reliance capacity, aim to help African countries solve their current practical problems, realize sustainable growth, and further consolidate the foundation for economic and social development.
China's commitments offered through FOCAC help all African countries having diplomatic ties with China, and provide practical benefits to these countries and their peoples.
In future, based on the spirit of mutual benefit and progress, friendly consultation, pragmatism and high efficiency, the Chinese government will, together with African countries, continue to strengthen the economic and trade cooperation between China and Africa within the FOCAC framework, and further develop a new-type of China-Africa strategic partnership. Conclusion
The world today is undergoing great changes and adjustments. The economic recession triggered by the international financial crisis hasn't come to an end yet. Global issues of food security, energy supply, climate change and prevention and control of epidemic diseases have become more prominent. And uncertain factors in the global economy are increasing. As developing countries, China and African countries now face good opportunities to boost their growth and also the challenges of complex global problems.
China and Africa enjoy complementarity. Their common interests are constantly expanding, and the future of their economic and trade cooperation is bright. On the principles of equality, mutual benefit and common development, China will continue to promote China-Africa economic exchanges within bilateral or multilateral frameworks, broaden the scope of cooperation, explore new methods of cooperation and share the fruits of development with the African countries.
As economic globalization progresses, the economic and trade cooperation between China and Africa will definitely gain momentum to reach a larger scale, broader scope and higher level with their joint endeavors, which can give new energy and vitality to overall China-Africa cooperation and make more contributions to building a world with long-lasting peace, common prosperity and harmony.
African dancers perform at a performing gala themed on "Ode to Friendship" staged to mark the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC
The Eight-Point Plan China Pledged at the FOCAC Beijing Summit
1. Increase assistance to African countries, and by 2009 double the size of its assistance to African countries in 2006.
2. Provide US$3 billion in preferential loans and US$2 billion in preferential export buyer' s credit to African countries in the next three years.
3. Set up the China-Africa Development Fund, the total amount of which will gradually reach US$5 billion, to give encouragement and support to Chinese companies investing in projects in Africa.
4. Help the African Union to build a convention center in order to support African countries in their efforts to strengthen themselves through unity and speed up African integration.
5. Cancel the repayment of interest-free government loans that had become due by the end of 2005 to China by Heavily Indebted Poor Countries (HIPCs) and Least Developed Countries (LDCs) in Africa that have diplomatic ties with China.
6. Further open the Chinese market to Africa, and increase from 190 to over 440 the number of African export items to China eligible for zero-tariff treatment from the LDCs in Africa having diplomatic relations with China.
7. Set up three to five overseas economic and trade cooperation zones in African countries in the next three years.
Train 15,000 professionals for African countries in the next three years; send 100 senior experts in agricultural technology to Africa; set up in Africa 10 demonstration centers of agricultural technology with special features; assist African countries in building 30 hospitals and provide a grant of 300 million yuan to African countries that is used to buy anti-malaria drugs like artemisinin and build 30 centers for prevention and treatment of malaria; dispatch 300 young volunteers to African countries; help African countries set up 100 rural schools; increase the number of Chinese government scholarships for African students from the current 2,000 per year to 4,000 per year by the end of 2008. Appendix II
The New Eight-Point Plan China Pledged at the Fourth FOCAC Ministerial Conference
1. China proposed the establishment of a China-Africa partnership in addressing climate change and the holding of senior official consultations on a non-regular basis to strengthen cooperation in satellite weather monitoring, development and use of new energy, prevention and control of desertification, and urban environmental protection. The Chinese government has decided to assist African countries with 100 clean energy projects in the fields of solar energy, biogas and small hydro-power stations.
2. To intensify cooperation in science and technology, China pro-posed to launch the China-Africa Science and Technology Partnership Plan, carry out 100 joint research and demonstration projects, invite 100 African post-doctoral students to conduct scientific research in China and subsidize them when they return to their home countries to work.
3. In order to raise African countries' capacity in financing, the Chinese government will provide US$10 billion in preferential loans to African countries. China supports the establishment by Chinese financial institutions of a special loan of US$1 billion for the development of small and medium enterprises (SMEs) in Africa. The Chinese government will cancel debts of interest-free government loans that will mature by the end of 2009 owed by all HIPCs and the LDCs in Africa having diplomatic relations with China.
4. China will further open its market to African countries. It will gradually give zero-tariff treatment to 95% of exports from the LDCs in Africa having diplomatic relations with China. As the first step, China grants zero-tariff treatment to 60% of the exported commodities from those countries in 2010.
5. In order to further strengthen agricultural cooperation and improve African countries' capacity for food security, China will in-crease to 20 the total number of agricultural technology demonstration centers built for African countries, send 50 agricultural technology teams to Africa and help train 2,000 agricultural technicians for African countries.
6. China will continue to deepen China-African cooperation in medical care and public health service. It will provide 500 million yuan worth of medical equipment and malaria-fighting materials to 30 hospitals and 30 malaria prevention and treatment centers which have been built with China's assistance, and help African countries train a total of 3,000 doctors and nurses.
7. In order to further enhance cooperation in human resource development and education, the Chinese government will help African countries to build 50 China-Africa friendship schools and train 1,500 school headmasters and teachers; increase the number of Chinese government scholarships for African students to 5,500 by 2012; and train a total of 20,000 professionals in various sectors for African countries in the next three years.
8. To enlarge people-to-people exchanges, China proposed to implement a China-Africa Joint Research and Exchange Plan to strengthen cooperation and exchanges between scholars and think tanks, which will also provide intellectual support for better policy-making regarding cooperation between the two sides.
Africa's economic outlook could suffer if foreign investment pushes up the value of its currencies and cripples exports
As a result of chronically deficient demand in the aftermath of the 2008-09 financial and economic crises, global imbalances are on the rise again, as is the risk of protectionism. The US thinks China is undervaluing its currency to support its industry. The situation could lead to an "international currency war". What does this herald for African countries?
If history is any guide, we might look into previous currency conflicts to gauge the future. In the 1930s, currency wars led to competitive devaluations, protectionism, high inflation, economic collapse, the rise of Hitler in Germany, and eventually the second world war.
Africans were drafted in their thousands to fight alongside the allied forces against the axis armies. Many of them died. Africa's consolation prize came with the political awakening, the fight for freedom, and the independence that followed.
Postwar international euphoria did not last long before another currency conflict struck. In 1971, President Richard Nixon levied a 10% import surcharge and ended dollar convertibility into gold. This is how the debt-economy was born, further compounded and universalised by the Big Bang, the fall of the Berlin Wall, the repealing of the Glass-Steagall Act, China's embrace of the "one state, two systems" model – totalitarian politics and economic liberalism – and globalisation.
Cheap money flooded the world, leaving out African countries, which – except for white-ruled South Africa and Northern Rhodesia (Zimbabwe) – were locked out of capital market borrowings. Again, their consolation came when, devoid of toxic assets, they escaped almost unscathed the current twin woes of financial turmoil and economic downturn.
Quantitative easing (QE) adopted by the US Federal Reserve, the Bank of England, the European Central Bank and the Bank of Japan – printing hundreds of billions of dollars of electronic money – is the current weapon of choice in an escalating global currency war. Since the official interest rates set up by these central banks are close to zero, QE is flooding emerging market economies as investors search for higher yields. As a result, the exchange rates of their currencies are rising.
This invokes the 1985 Plaza agreement, whereby the US pressurised Japan into an appreciation of the yen. Japan never recovered from the huge monetary expansion that followed. China is unlikely to follow in Japan's footsteps. With its huge population, immense foreign exchange reserves and capital control, Beijing still has considerable scope to thwart speculative capital inflows and expand domestic demand to ward off western currency bullying.
Africa is being caught in the crossfire of this currency clash. In South Africa, the continent's biggest economy, capital inflows induced a rally in the rand, which last month rose to its highest level against the dollar in almost three years, undermining key export-led industries.
The CFA franc, which is freely convertible into hard currency at a grossly overvalued parity pegged to the euro, is still more vulnerable. The franc zone, which gives France control of 65% of the African member-countries' foreign-exchange reserves deducted directly from their oil, gold, cocoa, coffee and other commodities' exports earnings, will be a first choice for hot money inflows.
A foreign exchange cover of 110%, combined with soaring interest rates, low inflation and free capital movement, fuels capital flight to the benefit of France and French private companies. Moreover, the franc zone is particularly attractive to speculative capital inflows. Speculators transfer huge amounts of money to high-interest local accounts, collect their tax-free gains every three months, and take the no-risk plunge over and over again.
The brewing currency war is all the more unwelcome in Africa when one considers that the continent is enjoying a particularly good economic outlook. According to McKinsey & Company, Africa was the third-largest contributor to world economic growth in 2009, after China and India. It also credits the continent with delivering the highest rate of return on foreign investment.
Several factors have contributed to this upturn. Rapid urbanisation – 40% of Africans live in cities – has created a dynamic informal sector. This cash-based economy is a major contributor to the continent's productive capacity. It employs over 90% of the workforce, is home to three-quarters of retailers, and plays a leading role in increasing regional trade. By 2015, Africa will be the only continent where the working age percentage of the population will still be growing. The number of households with earnings over $5,000 – a threshold for consumption spending – will rise from 85m to 128m in the next decade.
Increased demand from emerging countries such as Brazil, India and China has pushed up commodity prices and increased export revenues. The scramble for large-scale purchases and leases of hundreds of thousands of hectares of farmland in the region has made the headlines across the world. There is no doubt that the opacity and the dubious conditions surrounding some of these deals are cause for concern. However, the fact remains that investment to harness Africa's huge agricultural potential is one answer to rising global food prices, "food riots", and climate change-induced food security concerns.
Economic reforms implemented throughout the 1970s and 1980s have improved the macroeconomic environment. Annual foreign direct investment flow in Africa rose from $9bn in 2000 to $62bn in 2008.
These are the bright development prospects that the currency sabre-rattling could jeopardise. However, Africa might find consolation in the fact that when the world's major economies are in trouble, wary investors find solace in "refuge values" like gold, silver, oil, base metals and other commodities in which Africa abounds.
Sanou Mbaye is a London-based Senegalese development consultant and a former senior official at the African Development Bank. He is the author of L'Afrique au secours de l'Afrique (Africa to the rescue of Africa).
CAMAC Energy Inc. (NYSE Amex CAK 3.97, -0.18, -4.31%) US publicly traded Energy Company that primarily engaged and focused on strategic development of oil projects by singular and multilateral operations. The market capitalization of the formerly Pacific Asia Petroleum Inc is about 632.1 M and the stocks have been hovering slightly below or above $ 4.00 momentarily.
With the market prospect of Camac Energy Inc, the stocks are highly recommendable for a diversified portfolio especially at this time in the global economy and the stocks are likely to appreciate in near future. The stocks which traded without much exposure at OTC bulletin board as Pacific Asia Petroleum is now a listed company at AMEX and NYSE as Camac Energy Inc after acquiring principal assets in the Oyo Oilfield. With its superior management team and implementable strategies it can grow to become a mid cap or even a large cap energy company at a faster pace. Superior management as an invaluable human capital can be an antidote to mistakes and bulwark to unforeseen circumstances and risk management.
Camac Energy Inc has opportunities for advancement and growth because of its holdings particularly in West Africa and China oil fields. Moreover the management has high quality individuals who have been in oil business for long time with enviable experience. The human capital can be leverage for advancing the energy company. The beginning of standard & Poor’s Factual Stock Report coverage comes with a credit rating that will enhance accountability and transparency, thus affirming optimum confidence in the company.
In Nigeria, Camac energy’s " principal assets include the Oyo Oilfield, an offshore oil asset in deepwater Nigeria that started production in December 2009; the Zijinshan Gas Asset, a 100%-owned gas asset in the Shanxi Province, China; and the Enhanced Oil Recovery and Production business in Northern China."
With its footing in west Africa, Camac Energy Inc may not only have to rely only its operation in Oyo Oilfield but it can also bid for oil exploration licenses in Nigerian deep waters and off shore. In Nigeria the risk of political tension and disturbances in Niger Delta is slowing down and it can minimize the political risk by bidding for off shore drilling. In China, Camac Energy with its subsidiaries can explore more oil fields in negotiated partnership with the authorities of provinces in the country.
The quantum development of Energy Company entails high intensive capital and lot of patience and prudence. This is where the experience and management acumen of quality individuals including the company’s President and CEO, Frank C. Ingriselli and Dr. kase lawal, a board member of the company, The chairman and Founder of Camac International Corporation comes handy.
Dr. Kase Lawal as a strategic asset
kase Lawal, Chairman of Camac Energy Inc has a strategic experience in global oil business, his dealings and undertakings in the world of oil deals can help propel Camac Energy Inc to greater heights. The management skill of the CEO Frank C. Ingriselli has been noted and enhanced since his touch of guidance he gave to the formerly Pacific Asia Inc until it became Camac Energy Inc and his invaluable experience as the former president of Texaco international. Lawal and Ingriselli intellectual synergy is a solid foundation.
Dr. Kase Lawal has a good and solid track record in company development and management. He has not been exempted from risks and mistakes associated in the business world but he has a sustainable quality that aided him to triumph over hiccups. He is the Founder/chairman and chief executive officer of CAMAC International Corporation and chairman of Allied Energy Corporation. The managerial prudence, business touch and guidance he utilized as he continued to develop his CAMAC Holdings can become a great asset to Camac Energy Inc. Kase Lawal as board member of Camac Energy Inc may not manage the daily business activities of Camac Energy Inc but his strategic input from his long accumulated experience can become an essential building block to the company.
Reorganization as inevitable tool for growth
Camac Energy Inc needs middle managers who are willing to work hard and provides the strategic compass for the company’s growth. These managers must be willing to take calculative risks and willing to feel the pulse of the shareholders. Reorganization enable a company to adapt to dynamics of the market place and able to compete effectively in the high energy of oil exploration and development.
Camac Energy Inc has good people in management including the recently new CFO Abiola Lawal, an erudite and intelligent manager. Mr. Abiola Lawal has been among the pillars of Oando Plc from where he came to joined Camac Energy, his strategic endeavors at Oando Plc speaks volume of his vision and skill. He brings the strategic depth to bear to the new position.
Camac Energy Inc is poise for growth and advancement but it must be prepare and ready for the challenges and opportunities in this competitive arena of oil’s exploration and production.
Afripol Organization. Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.
Federal Republic of Nigeria and People’s Republic of China signed memorandum of understanding - for China to finance and build $23 billion oil refineries in Nigeria. The deal was signed between the state-owned Nigerian National Petroleum Corporation (NNPC) and its Chinese counterpart China State Construction Engineering Corporation Limited for the construction of oil refineries in three strategic centers in Nigeria including Lagos and in troubled Niger Delta. At optimum production the refining capacity is expected to be 750,000 barrels daily.
His Excellency Emmanuel Egbogah, The special adviser to the president of Nigeria on petroleum matters and a powerful member of the negotiation team confirmed the signing of the deal to Financial Times of London. It was reported by Financial Times that Dr. Egbogah said that signing of the memorandum of understanding “is a starting point but it's a serious proposal."
China is a big player in Africa and Nigeria in particular especially in oil and gas industry. China has a history of trying to consolidate the deal to refurbish Nigerian refineries. “But previous Chinese offers to build or renovate Nigerian refineries as part of haggling over oil blocks between 2005 and 2007 have run aground. Beijing's emissaries have had far less success navigating Nigeria's perilous political terrain than they have in Angola or Sudan, both of which have emerged as crude suppliers to China. The new accord might represent a breakthrough, however.”
China with its big appetite for energy and together with its enormous foreign reserve of $2 trillion has found Africa as its resistible landscape for investments. Africa is rich in natural resources especially in oil and gas. Therefore China the most populous nation and the fastest rapidly growing economy in the world is willing to put her money where her interest can be solidified. The bulk of the financing for $23 billion refineries is from China Export & Credit Insurance Corp. and rest from a consortium of Chinese banks.
This investment can be fruitful and beneficial for both sides and it can become a boost for Nigeria to solve her refined petroleum problem. China can benefit enormously because it will make her foot on Nigeria much stronger and enable her to acquire more oilfields without much ado. Nigeria has major refineries in Warri, Kaduna and Port Harcourt but they are not functioning at an optimum capacity. The problems of corruption, poor management and lethargy have weakened Nigeria’s resolve to run efficient oil refineries.
A successful completion of the deal will enable President Goodluck Jonathan’s administration to bring to an end the scarcity of petroleum products especially petrol in Nigeria. On the money issue, Nigeria has wasted bundle of billions of dollars in the importation of refined fuel for local consumption. It has been estimated that Nigeria shoveled away $10 billion annually in the importation of the refined fuel. The demand for refined fuel in Nigeria is in increased brought by demand from electric energy supply industries and electric generators, factories and the increasing automobiles presence in Nigeria.
This is sunshine deal for the investment is in the core needed-area in Nigeria. A win-win deal for everybody, China will get what she wants - the rights for oil exploration while Nigeria will ameliorate her energy problems.
China has been cultivating interest in Africa for sometime and in 2006 she organized the first major summit between Africa and China. The Chinese President Hu Jintao opened the summit in Beijing attended by nearly 50 African heads of state and ministers. China has pledged to double its aid to Africa and provided $5bn in loans and credits over the next three years. China emphasized that it has no political agenda but doing business with Africa on mutual benefit. China has been accused by the West of downplaying human rights and corruption in Africa.
The President of China, Mr. Hu later embarked on official African tour in 2006 that took him to Nigeria, Kenya, Morocco and others. In Nigeria, President Hu addressed the joint National Assembly and called on greater ties between Africa and China and he made business deals in Nigeria including:
*Seven co-operation agreements were signed by Nigeria and China during President Hu 's visit.
*China will buy a controlling stake in Nigeria's 110,000 barrel-a-day Kaduna oil refinery
*Build a railway system and power stations in Nigeria
*China National Petroleum acquired right for oil exploration blocks - comprise two areas in the oil-producing Niger Delta - one onshore and one in shallow water - and two areas in the higher-risk inland Chad basin, where no oil is produced at present.
*Chinese state oil firm CNOOC completed a $2.3bn deal to buy a stake in a Nigerian oil field.
*Chinese companies constructed factories in Nigeria and more are planned for a free trade zone in the south-east of the country
Therefore the oil refineries constructions deal with Nigeria goes along with China strategic and calculative business ventures in Africa and Nigeria in particular. For this significant business deal in Nigeria, China in spite of her ambition in Africa deserves praise. Nigerian economy needs the boost from functioning oil refineries.