This blog is a recap of the first day of IGD Fall Frontier 100 Forum held at Covington law firm in Washington, D.C. The forum devoted a special session to discuss Chinese investment in Africa and its impact on Africa’s private sector.
Afreximbank and Exim Bank of China: Collaborating for Africa’s Industrialization and Economic Success
Dr. Benedict Okey Oramah, President | African Export-Import Bank (Afreximbank). Opening remarks delivered by Dr. Hippolyte Fofack, Chief Economist and Director, Department of Research and International Cooperation | African Export-Import Bank.
To read the full remarks, please click here.
PANEL SESSION: Chinese Investment in Africa: A Balanced View of China’s Role and Impact on Africa’s Private Sector
Moderator: Dr. Deborah Brautigam, Director |China Africa Research Initiative, School of Advanced International Studies (SAIS), Johns Hopkins University
- The Honorable Henry Rotich, Cabinet Secretary for the National Treasury | Republic of Kenya
- Dr. Witney Schneidman, Senior International Advisor for Africa | Covington
- Dr. Hippolyte Fofack, Chief Economist and Director, Department of Research and International Cooperation | African Export-Import Bank
- Ambassador Helen Hai, CEO | Made in Africa Initiative, UNIDO Goodwill Ambassador
- Nick Earlam, Chief Executive Officer and Director | Plexus Cotton Ltd.
- Michelle Na Zhang, Former Consultant | China Development Bank
The IGD Fall Frontier 100 forum kicked off with welcome remarks by Robert Mosbacher, Board Chair of the Initiative for Global Development (IGD) and Dr. Witney Schneidman, Senior International Advisor for Africa at Covington & Burling.
“IGD Forums aim to draw attention to some of the critical developments taking place across the African continent. Chinese investment in Africa is one of the emerging issues,” Chairman Mosbacher emphasized. He challenged attendees to ponder “[how] American and African firms should position themselves for the reality that China is now the largest trading partner of Africa?”
Dr. Hippolyte Fofack, Chief Economist of the African Export-Import Bank (Afreximbank) offered remarks on behalf of Dr. Benedict Okey Oramah, President of Afreximbank, to open a provocative panel session on “Chinese Investment in Africa: A Balanced View of Its Role and Impact on Africa’s Private Sector.”
Dr. Fofack’s remarks drew attention to the collaboration between Afreximbank and the Export-Import Bank of China to support industrialization and economic development in Africa. He stated that a $1 billion Memorandum of Understanding between the two banks will enable African corporations to have “value addition to their businesses.”
“However, growth opportunities in Africa are endless and the impact of Chinese investment on Africa’s private sector will very much depend on steps taken by African governments and the resilient African private sector to take advantage of changes happening in China,” said Fofack.
The Afreximbank’s chief economist stated that the process could result in the transfer of low skills and light manufacturing industries with the potential of transferring more than 80 million jobs to the most competitive African countries still at the lower end of the development ladder.
Dr. Deborah Brautigam, Director of China Africa Research Initiative at Johns Hopkins University, presented an “Overview on Chinese Investment in Africa”, where she dispelled misperceptions that China has a “grand strategy” towards its investment in Africa.
UNIDO Goodwill Ambassador and CEO of Made in Africa Initiative Helen Hai spoke passionately about her experience in establishing a shoe manufacturing factory in Ethiopia that created more than 4,000 jobs for local workers. “Job creation is the key to economic development in Africa,” said Hai.
The Honorable Henry Rotich, Cabinet Secretary for Kenyan National Treasury shared his insight on Chinese investment from an African government perspective. He pointed out that “many African countries are beginning to follow the Chinese model [of industrialization]”.
“Chinese investors are trying to be adaptive,” said Michelle Na Zhang, a former consultant to the China Development Bank, about the evolving business environment in Africa. Zhang noted that Chinese investors tend to be “problem-driven” and aim to fill existing gaps in African countries.
Nick Earlam, CEO of Plexus Cotton Group, a global agribusiness committed to promoting sustainable cotton agriculture, observed that there are managerial and cultural differences between Chinese and other foreign investors in Africa.
“Chinese investors tend to control, but Western investors like to empower people,” Earlam said. “China knows that their culture is quite alien often to African countries and vice versa. And they are operating through third parties who know better [about] how to play cultural differences.”
Dr. Witney Schneidman of Covington stressed that “we cannot afford to see African market as a zero-sum proposition.” And global investors must ensure that “Africa has the access to the best global practices.”
Panelists agreed that Africa needs to play a more proactive role in engaging with global investors operating in their country.