Chinese investors look to broaden their African portfolios

Chinese investors look to broaden their African portfolios

17 June 2013

Mahamat Mouta Djirabi, a Chadian, walks through the hotel lobby of the New York Forum Africa conference carefully searching for participants to connect with. He stops at a group of Chinese people and starts pulling out promotional materials from his suitcase.

Djirabi looks prepared as he talks slowly in English to the Chinese. After briefly introducing himself as an investment promotion director with Chad's Ministry of Trade and Industry, he gets right down to business.

"There are three Chinese companies in my country," he says. "We are resource-rich and we welcome more Chinese investors.

"Their projects help us create jobs, we need that. They do things in our country, and they don't take them away later," Djirabi said. "Our cultures are similar to each other in some ways, because they never impose their traditions on us like some Western investors do."

Djirabi was one of several African networkers actively searching for Chinese connections during the forum in Libreville, Gabon this past weekend. He said meeting Chinese investors was the main reason he came to the event - dubbed the largest business conference in the Pan-African area - which gathered more than 1,000 business leaders, politicians, and policy-makers from around the world with the intent of turning economic opportunities in Africa into a realities.

Despite many challenges - one of which is that Chinese investment is perceived as "colonialism" by some Western countries - Chinese businessmen do make a difference when they carry out projects in Africa.

"They go into the African business environment and try to understand the business culture in the African way," said Angelle B Kwemo, president of A Strategik Group, a US-based consulting firm specializing in business advice about building in-roads into Africa and other emerging markets.

Chinese investment in Africa totaled $2.9 billion in 2012 in 50 of the continent's 54 countries with an average annual growth rate of 50 percent compared to 2003. About 2,000 Chinese companies - both State-owned enterprises and private small- to medium-sized enterprises - have footprints across the continent in various sectors, including infrastructure, manufacturing and others.

As China's investments in Africa rise, experts say Chinese investors should work out a strategy to both expand their investment range - going beyond the sectors into broader ones - and help local communities generate growth among themselves, instead of having them purely receive investment, which doesn't necessarily lead to sustainable growth.

Chinese investors haven't ignored this. In recent years, more and more Chinese projects are followed up with vocational training for the Africans who work on them.

Gemsy New Group Co Ltd, a Zhejiang-based sewing machine company, does vocational training at their operation in Algeria, where they also export their products. There students receive a certificate at the end of training, which helps them find work on their own.

But there is more to do to create a sustainable investment and a win-win situation that can make their presence more positive.

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