Economy

Firms urged to invest in Africa

By Zhou Yan (China Daily)
Updated: 2010-05-29 09:19

BEIJING - Government officials on Friday urged more Chinese companies to invest in Africa's agricultural and manufacturing sectors to help the continent improve its economic structure.

"There are very broad investment areas in Africa, Chinese companies can explore more opportunities in sectors like agriculture and manufacturing, apart from the current focus on infrastructure and energy resources," Lu Shaye, director-general of the Africa affairs department under Ministry of Foreign Affairs, said on Friday at a China-Africa forum in Beijing.

He said that Africa's investment environment has greatly improved in recent years, and many nations have introduced preferential policies including lower tax rates to attract foreign capital.

"The business potential in Africa is infinite," Lu said.

Competition in energy resources investment is stiffer given rivalries from Western countries, and Chinese firms could shift their focus more to sectors like agricultural development that are much easier to operate and more in line with African countries' needs, said Liang Guining, deputy director of the research center for foreign investment under the Ministry of Commerce.

According to Anthony Desir, a fund manager at the Strategic African Mineral Investment Fund, Africa is China's largest supplier of oil, accounting for 75 percent of China's total imports from the continent. Most products bought by Africa from China are for infrastructure needs.

"Africa's vast amount of resources provides great conditions to grow crops in the continent," Yang Haomin, chairman of Shaanxi Nongken Group Ltd Co, which operates a 10,000-hectare agricultural project in Cameroon.

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According to Wei Jianguo, former vice-minister of commerce, there are over 2,180 Chinese firms investing in around 7,800 projects in Africa including power stations, harbors and airports, pushing China-Africa trade volume to an all-time high of $106.8 billion in 2008 from $10 billion in 2000.

"Now is the best time for Chinese firms to invest in the continent as Africa needs to upgrade its economic structure," Wei said, adding that cooperation between China and Africa is mutually beneficial.

The continent's economy grew more than 5 percent annually between 2004 and 2008, followed by a slower increase of 1.6 percent in 2009 due to the global financial crisis.

The International Monetary Fund estimates that Africa's economy will grow by 4 percent in 2010 and 5.5 percent next year.