China, US investment in Africa

CNC
Added On June 16, 2015

China and the United States, the world's two biggest economies, are among the top 10 foreign investors in Africa.
 
A veteran expert says that the two nations' investment on the continent does not conflict, but is complementary in many cases.
 
James Newlands, a leading expert with more than 33 years of experience in the field of Africa investment, made the remarks on the launch of an annual report on Africa's attractiveness survey.
 
His statement helps rebuke the so-called "new colonialism" allegation that China has exploited Africa's resources, given that China has made great efforts to help the continent's development and benefit its people. 
 
Newlands says that the Chinese and American investment is needed by Africa and is also in the interest of African countries as a whole.
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"If we look at those two countries, and we look at three measures, we look at the number of FDI projects, we look at the capital value and we look at the jobs created, so it's important to look at all the three."
 
According to Newlands, the U.S. has the largest number of FDI projects in Africa.
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"If we look at the number of FDI projects, the U.S. is the number one investor from any country in the world, about 13.8 percent of the FDI projects are from the U.S., and China in that ranking is in the top 10."
 
While China enjoys a better ranking in terms of capital value and jobs created.
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"The capital value of those Chinese projects is somewhat higher, but (it's) interesting that the number of jobs and the capital value is disproportionately more than the number of projects." 
 
Given the huge demand of finance in the continent, Newlands believes that the investment from both countries does "not conflict".
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"If you look at the needs Africa has or the unmet needs of the population, there's more than enough opportunity for all investors. I don't see a great competition, to say, well, these opportunities will be taken and not available. There's more than enough opportunity, so frankly I see it as complementary in many cases."  
   
Newlands says that there are several similarities in the Chinese and American investment.
 
Both nations have taken South Africa as the leading investment destination and they both see technology, media and telecommunications as the leading sectors to invest.
   
On the differences, the expert says that consumer products are an important sector to invest, but probably more so for U.S. companies.
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"We see perhaps more Chinese investment in mining, the automotive sector. More U.S. investment is in things like financial services and business services. That's where the main difference from a sector perspective happens."
 
When talking about the driving force behind foreign investment in Africa, Newlands says that there is a new story for the continent whose traditional investment attractiveness is about resources, mining, coal, oil and gas.
 
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"But I think increasingly we're seeing the story that's driving a lot of investment in Africa from both China and the U.S., it's the same factors driving that investment -- the large population, the increasing disposable income of that population, urbanization and a young population. So it's a market for consumer goods and other things that consumers need. So a lot of technology, media, telecommunications, those are the sectors that are attracting a lot of interest, particularly from both China and the U.S."
   
Newlands also spell out five priorities for both African governments and foreign investors to boost healthy economic growth on the continent. 
 
They are shared value, partnerships, infrastructure, regional integration and entrepreneurship.
   
SOUNDBITE (ENGLISH): JAMES NEWLANDS, Africa Investment Expert
"We spelt out what we see as five priorities for Africa that governments and investors need to embrace if Africa's really to grow, continue to grow, and grow in a sustainable and an inclusive way. Now in each of those five aspects, I think there's a role to play for government and there's a role to play for investors, and those would be the things that I would say Africa is looking for from investors like the U.S. and China."