Chinese investment important for Africa's growth
Chief Executive of NEPAD, Professor Firmino Mucavele made the observation recently at the expert group meeting, held in Addis Ababa.
The meeting entitled ``Investment for African Productive Capacity'' was organized by the UN Industrial Development Organisation (UNIDO) and the AU, the report said.
He said that Chinese investment in the continent was being hindered by lack of infrastructure which is a menace for growth and development in Africa.
``Lack of adequate infrastructure hinders private sector initiatives and increases their investment costs, and China is giving Africa infrastructure such as railways, roads, and others that some development partners are not providing," he stressed.
Mucavele said that Africa was really different than it was six years ago and that the continent had exceeded five per cent growth rate for the past three years indicating an end to decades of economic stagnation.
``Foreign Direct Investment (FDI) reached 31 billion dollars in 2005 surpassing Official Direct Aid (ODA) for the first time.
``Food processing, textiles and services now attract a growing proportion of foreign investments from new source countries such as China, India, Malaysia and South
Korea", the NEPAD boss helmsman added.
He said China's high levels of reserves and capital which the continent lacked to promote investment could lead to the promotion of comparative economic advantages.
Mucavele noted that there was a need for changes in Africa, saying; ``the norms, institutions and how business run in the continent should be improved to avoid any problems with the Chinese investment in Africa,
He however, stressed that there were other clauses in the agreements with the country that limited imports from China.
He urged Africans to lay more emphasis on transforming the economy and increase the use of comparative advantages and competitiveness in the market rather than worrying about the threats of Chinese investment and imports.
"The problems we have with China exist in our relations with the European Union, the United States and others. What we need is to work together as NEPAD and China are working at the problems together,'' Mucavele said.
Source : The Guardian (20/03/2007)
