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Deborah Brautigam provides an overview and description of China's development finance to Africa. "Looking at the nature of Chinese development aid - and non-aid - to Africa provides insights into China's strategic approach to outward investment and economic diplomacy, even if exact figures and strategies are not easily ascertained", she states as she describes China's provision of grants, zero-interest loans and concessional loans. Pambazuka Press recently released a publication titled India in Africa: Changing Geographies of Power, and Oliver Stuenkel provides his review of the book.
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Emerging powers news

Emerging Powers in Africa News Round-up

2010-07-23, Issue 491

http://pambazuka.org/en/category/emplayersnews/66200

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In this week's emerging powers in Africa round-up, a big shift in trade relations is taking shape across Africa, China's Liu Zhenmin meets AU Chairman Ping, India targets more links in Africa’s food supply chain, World Cup lends South Africa confidence to unite continent, and NGOs slam EU-Brazil plans to develop biofuels in Africa.

General

Big shift in trade relations taking shape across Africa
Africa’s total merchandise trade with non-African developing countries surged from $34-billion in 1995 to a material $283-billion in 2008, making this category of trading partner the continent’s fastest growing, a new United Nations Conference on Trade and Development (Unctad) study shows. It also shows that China’s role as a trade and investment partner has underpinned much of the expansion. Overall, the contribution of non-African developing countries to Africa’s external trade increased from 8% in 1980 to 29% in 2008. In fact, Africa’s trade with all developing countries, including intra-African trade, actually surpassed that of the European Union (EU) for the first time in 2007, indicating a marked increase in the importance of develop- ing countries to Africa’s merchandise trade patterns. While the EU remained Africa’s largest trade partner, its share of trade declined from around 55% in the mid-1980s to below 40% in 2008.However, as a source of foreign direct investment in Africa, non-African developing countries’ share rose more modestly, from the 12% level recorded between 1995 and 1999 to 16% between 2000 and 2008. This investment was mostly directed towards natural resources, but there were also significant investments into infrastructure, as well as finance, agriculture and light manufacturing. The report, which was unveiled by Unctad secretary-general Read More

China surpasses US as world's top energy consumer
China is now king of the world in energy consumption, surpassing the U.S. years ahead of forecasts in a milestone that left the Asian giant immediately rejecting its new crown. Sensitive to its status as the world's biggest polluter, China has long pointed fingers at developed nations in climate change talks and resists any label that could increase international pressure for it to take a larger role in curbing greenhouse gas emissions Read more


China in Africa

China is 'not that big a force in Africa'
China is among the most active investors in Africa, but developed countries still account for most foreign direct investment (FDI) into the continent, according to the 2010 World Investment Report. South Africa - and not China - was the biggest emerging market investor in Africa between 2006 and 2008 with $2.6 billion (R19.3bn) of average annual FDI flows. China invested $2.5bn in Africa between 2006 and 2008, a fraction of its overall investment outflow Read More

CHINA’S FRENCH KING IN AFRICA
Evan Osnos chats to a young Chinese Pharmaceutical Researcher selected by his company to join an agricultural project DRC. The young scientist informs Osnos that the project is aimed at growing rice to ship back to China. But more than that he indicated that project was prestigious because it made his company look good and patriotic in the eyes of the local Chinese officials Read More

AGREED MINUTES BETWEEN KENYA¹S MINISTER FOR TRADE HON. AMOS KIMUNYA AND THE VISITING HON. JIANG ZENGWEI, VICE MINISTER OF COMMERCE OF THE PEOPLE¹S REPUBLIC OF CHINA ON 12TH JULY 2010
During a meeting between the respective the Kenyan trade minister and his Chinese counterpart, both sides agreed to review the outdated Bilateral Trade Agreement to reflect the current situation in Kenya and china where the two are members of various trading blocks. Trade between the two countries has been growing very fast, but it is heavily in favour of China. In view of this several measures were discussed to rectify the situation including exchanging Trade and Investment related information, participating in Trade Fairs and Exhibitions in each other’s countries Read More

Tanzania bows to Chinese investor over setting up new state airline
Tanzania is to set up a new state airline to replace the ailing Air Tanzania Company, bowing to pressure from Chinese investors who are refusing to take over debts incurred by the airline over the past four decades. The formation of a new airline, to be announced after the end of the national parliamentary session, was at the centre of prolonged negotiations with Hong Kong-based Sonangol International, which have taken about three years Read More

Assistant Foreign Minister Liu Zhenmin Meets with African Union (AU) Commission Chairman Jean Ping
On July 21, 2010, Assistant Foreign Minister Liu Zhenmin, as special envoy of the Chinese government, met with African Union (AU) Commission Chairman Jean Ping on the sidelines of the 15th Ordinary Session of the Summit of the African Union (AU). Liu said that China is ready to work with AU to continuously keep closer bilateral coordination and cooperation in major international and regional issues, expand pragmatic cooperation in all areas and push forward China-AU friendly ties Read More

New Refinery Planned for Lagos Free Trade Zone
Nigeria is a place where many more deals are announced than are ever completed. But July saw progress towards the construction of one of three new Nigerian refineries expected to reduce imports of refined petroleum products, a costly and ironic feature of the oil-rich nation's economy. The memorandum, signed in May 2010, proposed the building of three refineries at a total cost of $25 billion dollars. Not surprisingly, it's in the bustling economic engine of the country, Lagos, that concrete details of funding of a public-private partnership to build a refinery have emerged. The eight billion dollar refinery will be located in the southeastern state's Lekki Free Trade Zone, and NNPC Executive Director in charge of Engineering and Technology, Billy Agha, commended Lagos State Governor Babatunde Fashola for incorporating an oil and gas project into the LFTZ Read More

Concerns over Chinese Investment and Working Conditions
Chinese investment in African countries comes with few strings attached – which is exactly what concerns civil society organisations. During the Annual Bank Conference on Development Economics (ABCDE) held last week various members of African civil society organisations expressed concern about the terms of China’s increasing activities on the continent. The World Bank conference, organised with South Africa’s treasury department, ran from June 9 to 11 in Cape Town, South Africa. ‘‘Zambian civil society agrees that international finance is needed for development and it should not matter whether the assistance comes from Europe or China,’’ said Stephen Muyakwa, an agricultural economist in Zambia and chairperson of the Zambian Civil Society Trade Network Read More

Rhino Farms in China: Stimulating Illegal Trade, Fuelling Demand for Rhino Horn
As Asian demands for rhino horn medicine continue to keep rhino poaching syndicates in business, an alarming report has revealed that China is likely “farming” rhinos for horns – a practice that is poised to further invigorate the demand for rhino horn and drive wild rhinos ever closer to extinction Read More

China to Assist in Bridging Entrepreneurship Gap
The Office of the Special Adviser to the President on Relations with Civil Society (OSAP-CSR) has initiated fresh steps to explore the various opportunities which China is providing through its Economic and Commercial department. The office is seeking to build a stronger partnership with China in the area of entrepreneurship and skill acquisition to help in the implementation of its economic development drive for the actualisation of the country's push to become one of the major economic forces in 2020 Read More

China avoids condemnation of ICC’s fresh move against Bashir
The Chinese government appeared to move to a more neutral position regarding the International Criminal Court (ICC) arrest warrant issued for Sudanese president Omer Hassan Al-Bashir. On Monday, the Hague Tribunal added genocide charges to the counts against Bashir which already included war crimes and crimes against humanity for his alleged role in orchestrating the conflict in Sudan’s western region of Darfur where hundreds of thousands are believed to be killed and millions displaced. When the warrant was originally issued last year China was among the leading countries to criticize it saying it will complicate peace efforts in a nation which has suffered from chronic instability. It has also sought to convince western members of the UN Security Council (UNSC) to adopt a resolution to freeze the indictment under Article 16 of the ICC statute. This time, China’s tone was much more reserved, and did not directly address the issuing of the warrant. Foreign Ministry spokesman Qin Gang in reaction to the genocide charges said: "We hope relevant sides will listen to the African Union, the League of Arab States and countries concerned, and play a constructive role in maintaining peace and stability in Sudan and the region" Read More

Nigeria's refinery project to create 7,000 jobs: official
An estimated 7,000 jobs will be created in Nigeria's southern Bayelsa State when a refinery is built there in a joint project with China, state oil officials said. State-run Nigerian National Petroleum Corporation (NNPC) said in a statement that the Bayelsa refinery is one of three to be built across the country with a total installed capacity of 750,000 barrels per day.The three 'Greenfield Refineries' will be located in Bayelsa, the commercial capital Lagos and central Kogi state, the statement said Read More


India in Africa

Indian investment to Ethiopia reaches $5 billion
Indian investment to Ethiopia has reached a record of $ 5 billion in 2010, up from $ 300 million five years ago. A 24-member Indian investors’ team is in Ethiopia on a business trip, which aims at assessing business opportunities in the country Read More

Nagarjuna Fertilisers plans African foray
Indian Compnay Nagarjuna Fertilisers and Chemicals, the flagship company of the Nagarjuna Group, plans to set up an urea manufacturing plant in Nigeria. This would be Nagarjuna Fertilisers’ first foray into Africa. Though the plan is in a nascent stage, the company plans to invest about Rs 5,000 crore. For this, it would set up a joint venture (JV) with a local partner. The plant would have a one million tonne capacity. The African countries want India investors to invest in agriculture and allied fields. Gas, critical for urea production, is available aplenty. “There would be scope to sell the produce domestically or import to India,” said K S Raju, chairman of Nagarjuna Group Read More

'Independent' Gupta daily will back government
Atul Gupta, the politically well-connected computer tycoon behind South Africa's latest daily newspaper, declared that The New Age would be independent but "broadly supportive" of the government. The Indian-born head of Sahara computers, who has interests in mining, aviation and property, revealed that investors in the title to be launched in September included the Times of India - the world's biggest English language newspaper. The New Age was the product of two years of feasibility studies and his team would avoid the mistakes that had seen other titles like This Day and The Weekender close their doors, he said Read More

Punjab’s African plot
Jagjit Singh Hara’s 50-acre farm in Kanganwal village in Jalandhar leaves him with little time for anything else. Still, he has taken time off to make a trip to the Pasteur Institute in Kasauli, Himachal Pradesh, to get himself inoculated against yellow fever before he sets out to scout for land in Africa Read More

India targets more links in Africa’s food supply chain
Trade between Africa and Asia is booming like never before, and it’s no surprise that India will again have a substantial presence on Africa’s Big Seven food and beverage expo (AB7) to be held at the Gallagher Convention Centre in Johannesburg on July 25-27, 2010. The Indian companies have returned en masse for this year’s event and will install an even larger Indian Pavilion at AB7 to showcase new products and services. Visitors can expect to find tea, coffee, spices, rice, maize and cashew nuts amongst the many other familiar favourites from this country’s producers Read More


In Other emerging News

Why China Wins Africa Game
From the southern tip of their own continent and across to Latin America, Asia’s two rising and aspiring powers are set to compete for supremacy and the mantle of superpower status. But it’s in between these two points that the biggest competition between China and India is set to unfold. Forget Central Asia—Africa is the scene of the next ‘great game.’ The reason why the two will zero in on Africa is simple—both have burgeoning, resource hungry populations and rapidly growing economies. If they are to have any chance of sustained competition with developed Western economies, they will need access to the rich natural resources that Africa can provide. China already looks to have a significant edge on its rival, with two-way trade with Africa set to top $100 billion this year, compared to about a third of that between India and Africa last year Read More

World Cup Lends South Africa Confidence to Unite Continent
When it comes to trading partners, African countries have long looked beyond their neighbors. And when inadequate infrastructure makes transporting a car across the continent about triple the cost of importing it from Japan, it's not hard to understand why. Hosting the World Cup has given the continent's largest economy a huge shot of confidence, which the government and South African companies are expected to parlay into a bigger role reshaping trade and investment across the continent Read More

NGOs slam EU-Brazil plans to develop biofuels in Africa
EU and Brazilian leaders are set to announce a new “triangular co-operation” initiative, under which they will aim to work together in some of the world’s poorest countries, but NGOs say the duo’s scheme is self-centred and will simply make conditions worse. But as EU and Brazilian officials prepare to start studies on how best to develop bioethanol, biodiesel and bioelectricity projects in Mozambique – already a leading African producer of biofuels – environmental groups say the initiative will simply serve to displace people from their land and exacerbate food shortages Read More

SOUTH AFRICA PROMOTES ENERGY, ENGINEERING AND ICT AT SHANGHAI EXPO
South Africa’s Department of Trade and Industry (DTI) has kicked of its promotion of Energy, Engineering and ICT with a trade mission to Shanghai led by senior executives. Consul-General of Shanghai and Commissioner-General of the South African Pavilion at Shanghai Expo Mr. Khumalo explained As South Africa develops, there are opportunities for companies in related sectors ranging from raw materials to energy exploration. The theme of the South African Pavilion is Ke Nako! It’s Time: The Rise of the Modern Economy. By this we mean it’s time for you to find out about the opportunities which await you in South Africa Read More

Beijing gazumps New Delhi
The Lagos State government, the Nigerian National Petroleum Corporation and the China State Construction Engineering Corporation signed an US$8 billion deal this month for a 300,000 barrel-per-day oil refinery and a liquefied petroleum gas refinery that will produce 500,000 tonnes a year in the Lekki Free Trade Zone. Lagos will provide land and infrastructure for the project; the CSCEC will provide 80% of the finance and the NNPC will raise the rest. This plan, however, worries India's companies in Nigeria, especially ONGC Mittal Energy (OMEL), the consortium created by New Delhi's state-owned Oil and Natural Gas Corporation and the Mittal Group. OMEL had sought assurances of support from the NNPC and the Nigerian government in December last year for its plans to build a refinery in the Lekki Free Trade Zone but the deal has gone awry Read More

Brazil's poverty makes its aid donations both natural and surprising
Brazil's emergence as one of the world's biggest providers of help to poor countries is forcing a rethink. China's growing, and rapacious, interest in Africa's natural resources has now been well documented, but Brazilian investments are not that far behind. The country's official aid budget has tripled in the last two years. Brazil is also dramatically increasing its diplomatic corps, and opening a string of new embassies across the continent. As the Economist recently noted, its total development spending could be about $4bn a year, which roughly matches the spending of traditional donor countries such as Canada and Sweden. Like China, Brazil does not impose western-style conditions on recipients, but its aid is focused more on social programmes and agriculture than the infrastructure projects that China is using to extract Africa's raw materials. Brazil is also interested in buying up African commodities and in creating markets for its "green" ethanol and business opportunities for its powerful agricultural lobby Read More

Brazil's foreign-aid programme
In search of soft power, Brazil is turning itself into one of the world's biggest aid donors. But is it going too far, too fast? ONE of the most successful post-earthquake initiatives in Haiti is the expansion of Lèt Agogo (Lots of Milk, in Creole), a dairy co-operative, into a project encouraging mothers to take their children to school in exchange for free meals. It is based on Bolsa Família, a Brazilian welfare scheme, and financed with Brazilian government money. In Mali cotton yields are soaring at an experimental farm run by Embrapa, a Brazilian research outfit. Odebrecht, a Brazilian construction firm, is building much of Angola’s water supply and is one of the biggest contractors in Africa Read More

Pick 'n Pay to open more stores in Zambia
South Africa's Pick 'n Pay will open seven stores in Zambia in the next five years as the country's second biggest grocery retailer builds its presence in the continent. Pick n Pay, which on Tuesday opened its first store in the copper-rich southern Africa nation, will spend $25 million over the period. The Cape Town-based company has embarked on an expansion drive in the rest of the continent and plans to also launch operations in Mozambique and Mauritius in a bid to offset slack demand at home Read More


Blogs, Opinions, Presentations and Publications

South-South versus North-South preferential trade access: Different countries, same outcome?
China announced a zero tariff treatment to 95% of products imported from the least developed African countries having diplomatic relations with China (i.e. those that do not recognise Taiwan). This tariff removal is being phased in with 60% of imports to be tariff-free from 1 July 2010, and the whole 95% of products to be tariff-free by 2013. By 2013, the tariff exemption list will have been expanded from its initial 478 products in 2006, to 4,700 kinds of products. As part of its official interpretation of the measure, the Chinese Ministry of Commerce states its purpose to be to “further open market access to Africa and to increase the competitiveness of African export.”However, Africa has been the beneficiary of similar preferential access agreements with similar aims from other countries. The United States of America (USA) implemented the African Growth Opportunity Act (AGOA) in 2000, and the European Union (EU) created Everything but Arms (EBA) in 2001. In order to assess the potential impact of China’s free access agreement, this article considers the degrees of success achieved by existing trade agreements, the make-up of trade between Africa and China and finally, Africa’s potential to develop an export-oriented manufacturing sector Read More

Asia's rise and the economic implications for Europe, the UK and Africa
Overseas Development Institute (ODI) hosted a one day event exploring the implications of Asia's economic rise for Europe, the UK and Africa and how they might forge closer economic ties to mutual advantage Presentations Available Here

AFRICAN AGRICULTURE: AN ABIDING INVESTMENT VENUE FOR INDIA
Dr. Suresh Kumar argues that India can play a vital role in strengthening Africa’s development by collaborating with Indian partners to take advantage of benefits in scientific agriculture Read More

Chinese aid and investment unlikely to pull Africa out of its predicament
The news that Kenya has received Sh980 million from China as part of a continuing technical co-operation agreement is music to those who believe that external aid will pull Kenya out of poverty. But EGARA KABAJI argues It is, however, important to reflect on the true implications of external aid to Africa before we start celebrating. Africa’s experience with aid has, to say the least, been disastrous. Trillions of dollars have been poured into Africa for the past half a century, yet the continent has remained poor, ravaged by abject poverty and desperation Read More

Resurgent Continent? Africa and the World
To mark the launch of the LSE IDEAS Africa International Affairs Programme this Strategic Update considers the opportunities and the challenges facing the continent Articles available here

BRICs: Aid and Investment and Impressions from the West
Emerging economies such as Brazil, China and India have always been recipients of foreign aid from Europe and North America since the end of the Second World War and were the subjects of global development projects that often failed to bring BRICs and similar economies out of poverty and create sustained and viable growth. Brazil, China and India managed the economic crisis in 2008-2009 with temporary recessions during the global economic crisis, and were the first countries to see solid growth in 2010. As the US and EU struggle to manage their economies, countries like Brazil and China seek to invest in many developing nations, as well as give aid to many of those countries that have lost aid from the West or have political divisions with Western donor countries that often tie aid policy to political relations with their leaders Read More

China Bashing & Foreign Investments in Africa
Who exactly defines, asserts, defend and protect continental Africa's best interests? Why are too many Africans aping, and regurgitating acerbic criticisms of China by America and European nations, western nations who have in fact, had 600 years of dominating Africa? Western nations which have enjoyed unbridled and unmitigated monopoly of African human and material resources? Paul I. Adujie asks Why would Westerners ignore all the “evils” reeking off China's clothes, when the bell tolls for Westerners? But, the same Westerners are trepidations and stampede to warn Africa off, of, Chinese pungent undemocratic ways, and perverse-putrid human rights abuses, only now, because China is giving the Westerners a run for their money in Africa? Western self-interests of course! In China's forays into various African nations, Westerners finally have a fidelity challenge. Let the competition begin! Read More


Podcasts, Reviews and Interviews

Liberians divided over Chinese investment plan
China is set to make one if its biggest overseas investments, in the west African nation of Liberia. It’s promising to spend $2.6bn developing an iron ore mine. It’s hoped the project will create 3000 jobs in a country struggling to recover from years of war. Dan Nolan reports from the mine site, about 150 kilometres north of the capital, Monrovia Watch Here

When China met Africa
Reviewing Deborah Brautigam’s lates book The Dragon’s Gift: The Real China in Africa Story, Solange Guo Chaterland, a PhD candidate at Sciences Po in Paris. Focusing her PhD thesis on ethnography of Chinese engagement in Zambia from the 1990s until today, provides an insightful and compelling analysis by recognising that the book is an attempt to dig beneath the headlines and the hype which have blurred the boundaries between fact and fiction in order to provide a systematic and empirical account of what Chinese aid and state-sponsored economic engagement in Africa are, and what they are not. But more than this Ms Guo Chaterland challenges Brautigam around the complexities of state theory, which the reviewer feels the book lacks a convincing theory of the state Read More

Africa-India cross border mergers increase
Is Africa the next frontier for Indian business? To discuss, B Muthuraman, Vice Chairman, Tata Steel, part of The Tatas which has been in Africa since 1977 and today they make revenues of over USD 600 million from Africa and hope to reach one billion in two years and Manoj Kohli, Bharti Airtel, the guy who has just betted USD 10 billion on the continent. Mr Kohli has just today returned from a 20-day tour of 15 African countries participated in an exclusive interview with CNBC-TV18 Read More

China: Outsmarting the West in Africa
China's interest in Africa is frequently portrayed simply as that of a rising economic power seeking natural resources. In an interview with Inter-Press Service (IPS) Deborah Brautigam argues that this portrayal misses the full complexity of business relations between China and the continent Read More


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* Sanusha Naidu is research director of Fahamu’s Emerging powers in Africa programme.
* Please send comments to editor@pambazuka.org or comment online at Pambazuka News.

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