Turn­ing Africa’s re­sources into re­wards

Richard At­tias is an eter­nal op­ti­mist who be­lieves Chi­nese en­trepreneurs will play a big role in trans­form­ing Africa into an eco­nomic en­gine.

China Daily (Canada) - - FOCUS - By ZHANG YUWEI in New York yuweizhang@chi­nadai­lyusa.com

As the ex­ec­u­tive chair­man of Richard At­tias and As­so­ciates, the US-based global strate­gic con­sult­ing firm, and the founder of the New York Fo­rum Africa, an an­nual meet­ing that pro­motes eco­nomic lead­er­ship in Africa, he says that though the con­ti­nent has been long ne­glected, it still has the po­ten­tial to of­fer rich re­wards for in­vestors

The 54-year old At­tias, who was born in Morocco, says he be­lieves in new ideas and mak­ing things hap­pen, some­thing that he finds in abun­dance among present day Chi­nese en­trepreneurs.

“They (Chi­nese en­trepreneurs) are play­ing a key role every­where,” At­tias says point­ing to the dif­fer­ent projects, in­clud­ing roads, hos­pi­tals and sports cen­ters, that Chi­nese com­pa­nies have helped build in Africa.

The Pan-Africa eco­nomic con­fer­ence, or­ga­nized by the New York Fo­rum Africa in Li­bre­ville, Gabon ev­ery year is con­sid­ered to be an im­por­tant eco­nomic event as it brings to­gether the key stake-hold­ers who have a big role to play in the con­ti­nent’s de­vel­op­ment.

The third edi­tion of the New York Fo­rum Africa will be held from May 23 to May 25 in Li­bre­ville and will draw more than 150 speak­ers and 800 par­tic­i­pants in­clud­ing busi­ness lead­ers, pol­i­cy­mak­ers, and even some heads of state from 50 coun­tries. The main points for dis­cus­sion this time around are topics per­tain­ing to the broad trans­for­ma­tion of the con­ti­nent.

“Trans­for­ma­tion is a key word — it means all nat­u­ral re­sources should be trans­formed on the ground, in­vest­ment should be trans­formed in in­dus­tries, and ed­u­ca­tion should be trans­formed into tal­ents,” At­tias says.

“Chi­nese in­vestors have a big role to play in this trans­for­ma­tion,” he says. More im­por­tantly, it is also the op­por­tune time for Chi­nese in­vest­ment in Africa to be more “in­clu­sive” and for the part­ner­ship to be a “win-win” one that cre­ates more jobs and boosts the lo­cal econ­omy.

“(Chi­nese) in­vest­ment is cer­tainly en­ter­ing a new phase. It has moved be­yond the tra­di­tional realms of just bring­ing in cap­i­tal and ex­per­tise,” At­tias says.

“The strik­ing dif­fer­ence is that Chi­nese com­pa­nies have now re­al­ized that be­ing a good cor­po­rate so­cial re­spon­si­bil­ity part­ner can bring huge eco­nomic ben­e­fits.”

For this, At­tias says, it is im­por­tant that Chi­nese in­vestors form “long-term” goals and fo­cus on what they can do “for” the lo­cal com­mu­ni­ties.

“The chal­lenge for Chi­nese com­pa­nies is to form sus­tain­able eco­nomic part­ner­ships and get the lo­cal work-force more in­volved in such projects,” At­tias says.

Jerome Youmani Lankoande, chief ex­ec­u­tive of In­no­va­tion Que­bec, a Mon­treal based firm spe­cial­ized in tech­nol­ogy scout­ing, says China will need to in­vest more in mar­ket re­search if it wants to make tan­gi­ble gains in Africa as the African mar­kets are very frag­mented.

“Africa is a con­ti­nent with many coun­tries, many re­gions and dif­fer­ent cul­tures. Chi­nese in­vestors should get to know more about African cul­ture — re­gion by re­gion, coun­try by coun­try — as French and Bri­tish in­vestors did,” Lankoande says.

“For that, an im­por­tant el­e­ment will be to in­vest in African cul­ture from coast to coast.”

China- Africa trade has grown rapidly in the past decade. In 2000, the bi­lat­eral trade be­tween the two sides was around $10 bil­lion, while in 2012 it topped $200 bil­lion. Chi­nese for­eign di­rect in­vest­ments in African na­tions is ex­pected to reach $50 bil­lion by 2015, ac­cord­ing to a re­port pub­lished by Stan­dard Bank, a South African lender.

In March last year, Chi­nese Pres­i­dent Xi Jin­ping vis­ited Tan­za­nia, South Africa and the Repub­lic of Congo as part of his first over­seas tour as pres­i­dent.

Ear­lier this month, Chi­nese Pre­mier Li Ke­qiang made an eight day trip to Africa and vis­ited Ethiopia, Nigeria, An­gola and Kenya, as part of China’s ef­forts to ex­pand eco­nomic ties with the con­ti­nent. Li’s visit con­cluded with the sign­ing of a num­ber of deals on trade, en­ergy, in­vest­ment and de­vel­op­ment, in­clud­ing a call to ex­pand co­op­er­a­tion in in­fra­struc­ture and a pledge to in­crease Chi­nese aid to Africa by $12 bil­lion (which in­cludes $10 bil­lion in loans and $2 bil­lion for the China-Africa De­vel­op­ment Fund).

In Kenya, Li signed agree­ments with Kenyan Pres­i­dent Uhuru Keny­atta and other East African lead­ers to build a $3.6-bil­lion, 380-mile rail­way line con­nect­ing Nairobi to the Kenyan port of Mom­basa. Con­struc­tion is ex­pected to start in Oc­to­ber and go on till March 2018 and will be part of a re­gional rail­way sys­tem that will ex­tend through Rwanda, Uganda, Bu­rundi and South Sudan. The Ex­port-Im­port Bank of China will fund most of the project and the bal­ance by the Kenyan govern­ment.

At­tias says that China’s com­mit­ment to build in­fra­struc­ture will help in forg­ing long-term re­la­tion­ships with lo­cal com­mu­ni­ties in Africa.

“It’s im­por­tant to un­der­stand the vi­sion and strate­gies of the Chi­nese com­pa­nies,” he says.

Wang Xiaoy­ong, sec­re­tary­gen­eral of China-Africa Busi­ness Coun­cil, says the rail­way agree­ment is an im­por­tant mile­stone in Sino-African re­la­tions.

“Build­ing the rail­way is a sig­nif­i­cant step for Kenya and other African coun­tries. At the same time, it is also im­por­tant for China to be part of this process and help in the ac­tual con­struc­tion,” Wang says.

Ac­cord­ing to Wang, con­struct­ing the rail­way line will in­volve not only fi­nanc­ing and con­struc­tion but also ma­te­ri­als sup­ply and vo­ca­tional train­ing of lo­cal work­ers. “Chi­nese in­vestors can help on dif­fer­ent fronts and it will help them build their rep­u­ta­tion as in­vestors in Africa,” Wang says.

Lankoande, the au­thor of the book the po­lit­i­cal econ­omy of China’s For­eign Di­rect In­vest­ments in Africa, says China stands out as an in­vestor not by short term but “by long-term re­turn on in­vest­ment in Africa”.

“While oil and min­ing re­main an im­por­tant fo­cus, Chi­nese in­vest­ments are tar­get­ing sec­tors rang­ing from man­u­fac­tur­ing to food. This di­ver­si­fi­ca­tion is very im­por­tant for the African econ­omy,” Lankoande says.

How­ever, he also agrees with At­tias’ ideas about African trans­for­ma­tion.

“I think the most im­por­tant thing the Chi­nese in­vestors can bring to Africa and make a dif­fer­ence is through tech­nol­ogy trans­fer,” he says. “As we all know, China be­came a ma­jor player in tech­no­log­i­cal in­no­va­tion and it has sev­eral tech­nolo­gies that meet Africa’s needs, es­pe­cially in terms of the fea­tures and cost,” Lankoande says.

Terming China, “a hu­man re­sources power in the global mar­ket”, Lankoande says there is im­mense po­ten­tial to cre­ate a win-win part­ner­ship with Africa in vo­ca­tional train­ing.

“China pro­duces over 400,000 en­gi­neers ev­ery year, and this is huge com­pared to any other coun­try in the world. These en­gi­neers can help make tech­nol­ogy trans­fer from China to Africa a re­al­ity,” he says.

There are also op­por­tu­ni­ties for Sino-Africa tech­nol­ogy trans­fer in nat­u­ral re­sources also as Chi­nese en­gi­neers are fac­ing the same de­vel­op­ment chal­lenges that African en­gi­neers are striv­ing to over­come, Lankoande says.

He says that most of the in­vest­ment op­por­tu­ni­ties in Africa are still un­tapped. “Africa is the last fron­tier for growth,” Lankoande says. “Many African coun­tries are gen­er­at­ing wealth at a rate presently un­matched in any other part of the world and that makes them pri­mary des­ti­na­tions for in­vest­ment from all around the world.”

Op­por­tu­ni­ties with high re­turn on in­vest­ments ex­ist in sec­tors such as in­fra­struc­ture, man­u­fac­tur­ing, agri­cul­ture and telecom­mu­ni­ca­tions, he says.

“Africa is a play­ground for ICT (in­for­ma­tion and com­mu­ni­ca­tions tech­nol­ogy) in­no­va­tion, es­pe­cially in the tele­coms sec­tor. With a mo­bile mar­ket of over 700 mil­lion people, Africa is def­i­nitely the place to be for any tele­com com­pany,” Lankoande says.

Chi­nese in­vestors have al­ready tapped into most of the in­dus­tries in­clud­ing health, ed­u­ca­tion, trans­port and stor­age sec­tors. There are now more than 1,600 Chi­nese de­vel­op­ment fi­nance projects to­tal­ing $75 bil­lion in more than 50 African coun­tries.

Lankoande says Chi­nese in­vestors are also fac­ing chal­lenges that any other in­vestor would face in Africa.

“These chal­lenges are the po­lit­i­cal in­sta­bil­ity in some coun­tries, macroe­co­nomic in­sta­bil­ity, in­suf­fi­cient in­fra­struc­ture and the lack of mar­ket in­sights,” he says.

At­tias says the pos­si­bil­ity of build­ing part­ner­ships is one of the ma­jor goals of the New York Fo­rum Africa, some­thing that he de­scribes as a “mar­ket place” for global in­vestors to show “con­crete ac­tions”.

“Global part­ner­ships can help cre­ate lo­cal jobs,” says At­tias. “If we put Chi­nese com­pa­nies to­gether with US and Euro­pean com­pa­nies and maybe build joint ven­tures in Africa, this is the fu­ture of our econ­omy.”

Scan it!

ZHANG YUWEI / CHINA DAILY

Richard At­tias, co-founder of New York Fo­rum Africa, gives a key­note speech dur­ing the sec­ond edi­tion of the fo­rum in Li­bre­ville, Gabon in June 2013.

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