Africans In China

CALGARY, Alberta (AP) — Chinese refiner Sinopec agreed to acquire oil and gas exploration company Addax Petroleum Corp. in a deal valued at $8.27 billion Canadian (US$7.2 billion), gaining access to reserves in West Africa and the Middle East.

The wholly owned subsidiary of China Petrochemical Corp. will pay $52.80 Canadian (US$46.17) per share.

Geneva-based Addax, which previously disclosed it was in sale talks, said Wednesday its board has unanimously approved the deal, which is subject to regulatory approval. It is listed on exchanges in London and Toronto.

The takeover is the latest effort by Chinese energy and resource companies to expand and diversify overseas assets as Beijing seeks to secure scarce resources for the country’s future growth.

Beijing-based Sinopec, whose formal name is China Petroleum & Chemical Corp., is China’s biggest refiner by capacity.

It urgently needs to expand its upstream international assets to help cushion against spikes in global crude oil prices that have caused it to post billions of dollars in losses in recent years due to caps on domestic fuel prices.

Addax’s oil and gas exploration and production is based mainly in west Africa and the Middle East, including joint operation of the Taq Taq field in Iraq’s self-ruled Kurdish region with Turkey’s Genel Enerji.

The company reports it produced 134.7 million barrels a day of crude oil in the first quarter of this year.

The offer is a 47 percent premium to the closing market price on the Toronto Stock Exchange of Addax Petroleum common shares on June 5, the day prior to Addax’s public announcement that it was in preliminary discussions with parties regarding a potential transaction.

“We are pleased that Sinopec has recognized the highly attractive asset portfolio and exceptional team that we have assembled at Addax Petroleum,” CEO Jean Claude Gandur said in a statement.

“The efforts and accomplishments that Addax Petroleum has achieved thus far will be built on through increased investment in the business and acceleration of development and exploration plans.”

(Associated Press)

China Petrochemical Corporation (SINOPEC) will drill its first exploration well in the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ) in July.

The Chinese firm will start the oil exploration after some delay caused by the shortage of deepwater rigs, competent industry watchers told the News Agency of Nigeria (NAN) in Abuja on Wednesday.

Nigeria and the two archipelago islands of Sao Tome and Principe have a treaty to jointly manage the resources of their common maritime boundary in the ratio of 60 percent to 40 percent respectively.

Under the joint development agreement, both countries would ensure the orderly exploitation of the hydrocarbon and non-hydrocarbon resources in the JDZ.

Some officials familiar with SINOPEC’s activities said the exploration was in line with efforts to speed up exploration in oil Block 2 in the JDZ, as the Chinese firm seeks to take over Addax Petroleum Ltd., one of its partners in the JDZ.

JDZ oil blocks

The 692 sq. km. Block 2 is linked to many partners including SINOPEC, which has a majority stake of 28.67%, ERHC (22%), Addax (14.33%), ONGC Videsh (13.5%), Equator (9%), MoMo Deepwater, JDZ Limited and Foby Engineering (each with 5%), and A & Hartman (with 2.5%).

Apart from having a 14.33 percent working interest in Block 2, Addax Petroleum is also the operator of Block 4 with a 45.5 percent interest as well as 40 percent and 15 percent interests in Blocks 1 and 3 respectively, according to the company’s 2008 Annual Report.

“The Transocean SEDCO-702 deepwater rig is due to arrive at Block 2 around July 1 and drilling will start immediately afterwards,” NAN quoted an official with the JDZ.

“SINOPEC secured the production and sharing contract on the block in 2006, but it has not been able to start drilling due to a shortage of deepwater rigs,” a SINOPEC official and the JDZ official said.

The two officials, who preferred anonymity, declined to speculate on the SINOPEC-operated block’s potential reserves, but industry reports point to a pre-drill resource estimate of about 275 million barrels.

There have been varied reports on the Addax-SINOPEC deal, but nothing has been concluded.

SINOPEC offer

Initial reports on the buyout had earlier quoted the Chinese firm denying making an offer of $8bn for Addax’ assets in Nigeria and the Middle East.

But Bloomberg News reported on Wednesday that China Petrochemical Corp. has agreed to buy Addax Petroleum Corp. for C$8.3 billion ($7.3 billion) in the nation’s biggest overseas takeover, gaining oil reserves in Iraq’s Kurdistan and West Africa.

The report quoting an Addax statement on Wednesday also said that SINOPEC, China’s second-largest oil company, will pay C$52.80 a share in cash, which is 47 percent more than Addax’s closing market price in Toronto on June 5, the day before the company said it was in takeover talks.

It further said that parts of the deal would see the SINOPEC Group getting 42.5 million barrels of proved and probable reserves in the Kurdish region of Iraq, where the start of oil exports earlier this month sparked a wave of takeover interest.

China has spent as much as $5.4 billion since December on oil assets in Singapore, Syria and Kazakhstan after the price of crude fell from a record high and equity markets tumbled.

“The offer price is fair given prevailing oil prices and project risks,” Gordon Kwan, head of Regional Energy Research at Mirae Asset Securities Ltd. Hong Kong, said by email. The transaction would be “China’s single largest oil acquisition” by value, he said.

The deal surpasses China National Petroleum Corporation’s $4.18 billion takeover of PetroKazakhstan Inc.. in 2005 and comes three weeks after Rio Tinto Group scrapped a $19.5 billion proposed investment from Aluminum Corporation of China.

The takeover “fits well with the nation’s global energy strategy as the country pushes for diversification of its oil supplies, and increased access to oil in the Middle East and Africa will no doubt boost its energy security,” said Jiang Xinmin, an energy researcher at the National Development and Reform Commission, China’s top economic planner.

NAN reports that SINOPEC’s executives might have travelled to London last week to meet with Addax Petroleum to discuss the takeover bid.

SINOPEC said the acquisition of Addax is a “transformational transaction,” as it would help it to “achieve its strategic objective to build a stronger presence and operations in West Africa and Iraq, accelerating its international growth strategy as well as optimising its offshore oil and gas asset portfolio,” the unit said in a statement in state-run China Daily on Wednesday.

(234next.com)

JOHANNESBURG – President Barack Obama has tentatively accepted an invitation to attend the opening ceremony of the 2010 World Cup here next June, Joseph Blatter, the president of FIFA, said Monday.

“He accepted,” Blatter told a small gathering of reporters here. “But you know that heads of state are extremely busy. Hopefully his schedule will allow him to attend.”

A visit by the American president – especially one whose father was born in the African nation of Kenya – would lend an additional measure of credibility and cachet to the World Cup, the world’s largest sporting event, which is being hosted in Africa for the first time and which faces significant challenges in terms of security, transportation and lodging for the 450,000 expected international visitors.

The American president is extremely popular here. Several times, an American reporter, asked where he is from, and replying that he is from the U.S.A., has then been asked, “How’s Obama?”

Obama has also lent his support to an effort by the United States to host the World Cup in 2018 or 2022.
(goal.blogs.nytimes.com)

To meet up its target of generating 6000mw by December this year, the Federal Government is to partner the Peoples Republic of China to generate 500mw.

The Minister of Mines and Steel Development, Mrs. Dieziani Alison-Madueke, made this disclosure in Abuja, during a meeting with the Chairman of Industrial and Commercial Bank of China (ICBC) Limited, Mr. Jiang Jianqing.

She said “We want to start with modules of 500mw transmission, but we will be using the smaller modules of 300mw in multiples, just as you have in Botswana 150mw in multiples.”

She described it as a strategic project since the era of colonial masters in the 60s.

“The coal has been there. We have over 2.7 billion metric tonnes of coal in the country, and for these projects not to have been kick-started seems bare, but it is an exciting project. We expect to support the ministry of power very adequately in doing this, in conjunction with Standard Bank, since you have currently gone into over 60 deals infrastructure across the African continent,” she added.

The minister also said that the project was of great interest to Nigeria because the country has other strategic mineral resources it is keen on developing with its creation of a very robust framework on which to move forward, like the bitumen, which more major investors are expected to show interest in.

She noted that economic emphasis on some key minerals was strategic because of their economic importance to the nation. “Some of these minerals, are coal for the cost of diesel because it is high in terms of commodity market”, she stressed.

“Limestone has very high quantity of 2.2 feet trillion and Nigeria also has deposit of cement which has other uses and we have 27 billion barrels of bitumen and tar sands in Nigeria not to mention the actual asphalt content of the bitumen that we would like to exploit for the purposes of road construction, Barite, lead and zinc as well.

“And so, this is really the time that we are deliberating and articulating very strong programmes and projects to try and exploit our mineral resources to the optimum. We have 100 percent ownership of mines by foreign investors, they are also guaranteeing tenure as well as various incentives that are being put in place to ensure that we improve the environment and put things on ground this time for international investors. This is an on-going effort by the federal government.

She added that the Nigeria is in dire need of extra power in the national grid of the country, to this effect, we have put together eleven strategic coal cluster, the intention behind this is to ensure that each of these strategic clusters will provide quantities of coal to supply Independent Power Project (IPPs) that will be situated within the clusters that will generate power to transmission of five megawatts and above as production rounds up.

The reason for having the IPPs situated within the strategic clusters is to mitigate the amount of infrastructure logistics required to take the heavy quantities of coal from the companies to the actual power point themselves, because as you know we do not have the requisite quantities of infrastructures like the railway in the country at the moment to take these coal to the seaports or other parts of the country where they are demanded or the supply required.

We have gone ahead and put together this strategic platform with the expectation that with an alignment with the power ministry, we would be able to kick off this project in not too distant future. That was the whole purpose of creating the strategic clusters. So, we put together various blocks to ensure that the quantities of coal within those blocks will be able to supply these items.

The power ministry had to come in because of cost as this is happening, they will not only increase but strengthen the transmission grid to the nearest major power plants and then from there out to other parts of the country. We are looking hopefully to pick up a pilot project, and we have had discussions with IBTC regarding strategic support for the framework that will assist us in taking off this particular project with great interest and your strategic project in Botswana .

“The fact that you have put up power plants and have in-fact estimated that you will be able to put up about four independent turbans that is giving at least 150MW each at the end of the day and this is exactly the sort of project we would like to be put up in Nigeria.

Speaking also, the Chairman ICBC, Mr. Jianqing said as it is his last visit among the four countries trip to Africa; Nigeria is the most important economy in Africa due to its large population and big market.

According to him, “the rich natural resources and the short break in power, the shortage of Electricity is a symbol of the very hard movement of a country, we are here for an agreement for power station project.”

Adding, he said the choice of Nigeria among the countries to visit is of great benefit to both countries.

“I came to you and the Ministers of Finance and Power and also the Chief Economic Adviser to the President and they mentioned seven challenges in seven most important areas for Nigerian economic development and power industry is the ministry’s top agenda from the meeting.

Yesterday, I had lot of discussions with local companies and the government representatives and I got to know the importance of developing energy infrastructure and power. So far, a lot of people may know that Nigeria is rich in oil and gas resources production. It is also important to know that Nigeria as a country is rich in oil resources and in this regard, we do hope to work with the ministry to develop close cooperation with the mining industry in the country,” he added.

Assuring, he said, “ICBC as China ’s largest bank, hopes to provide the bridge between Nigeria and China in economic and social development.
(leadershipnigeria.com)

The China National Electric Equipment Corporation (CNEEC) has shown interest in developing the Kafue Lower Gorge Hydro Power Station at a cost of $1.5 billion.

Corporation President, Zhao Ruolin, says the Chinese power company will source for the money if the Zambian government agrees to contribute fifteen per cent of the total cost.

Znbc’s Luckson Nthani reports that Mr. Zhao made the pledge in Beijing on Monday.

This was when a delegation of Zambian parliamentarians and government officials visited the Headquarters of CNEEC which is solely-owned by the Chinese government.

He also said CNEEC is willing to help Zambia to develop alternative sources of energy from bio-mass, thermal, solar and wind.

At the same meeting, Chief parliamentary Whip, Vernon Mwaanga thanked the government of China for supporting Zambia’s efforts to meet its energy needs.

And Commerce Minister Felix Mutati has invited the President of CNEEC, Mr. Zhao to Zambia in July to attend a SADC pledging conference for the Kafue Lower Gorge Power Station Project.

Mr. Mutati said Zambia’s power deficit needs urgent attention.

CNEEC has already signed a Memorandum of Understanding with private investors in Zambia who are planning to develop a hydro-power station on the Kalungwishi River in the Luapula Province.

The Kalungwishi River Power Station is expected to cost $600 million.

[ZNBC]

(lusakatimes.com)

Chinese investment in Zambia is expected to hit $4 billion when Zhonghui Mining Group limited invests $3.6 billion in mining projects in North-Western and Luapula provinces.

Commerce Deputy Minister, Richard Taima says this makes China the single largest investor in Zambia.

Mr. Taima said this in Lusaka, Friday when he received a business delegation from China at his office.

The seven-member delegation is in Zambia for two days and will also visit Livingstone.

Mr. Taima paid tribute to economic relations that exist between Zambia and China particularly with china’s support in developing the economic Zone in Zambia.

Delegation leader, Chen Bing Hui said the team is in the country to explore investment opportunities in mining, automotive and furniture sectors among others.

He said the visit to Zambia is aimed at assessing the country’s investment climate and which areas of the economy offer the best investment opportunities.
(thelusakapaper.com)

VICTORIA FALLS - Africa needs more Chinese investment in the manufacturing sector so that it can move up the value chain and increase the incomes of its people, a senior COMESA official said on Saturday.

The Common Market for Eastern and Southern Africa (COMESA) secretary-general Sindiso Ngwenya said that although Chinese companies had invested mainly in the services sector, Africa would want them to do more in the manufacturing sector so that less wealth is exported abroad

“With regard to trade, the trade between COMESA countries and China has been growing more than 50 percent to 100 percent depending on the country but on average more than 50 percent annually, and this can be reflected by the trade figures themselves where by the end of 2008 China-Africa or Africa-China trade was approaching the US$100 billion mark,” Ngwenya said.

“But regarding investment, yes, Chinese companies are in the region. For example in Zambia when other companies were closing the mines the Chinese companies have continued to operate because they are not there for the short term but they are there for a long term partnership that is mutually beneficial to all of us,” he said.

“This is the situation but I would hasten to add that we need more Chinese investment in manufacturing so that we can then go up the value chain and increase the incomes of our peoples and ultimately of our governments,” he said.

Ngwenya said this on Saturday one day before the 13th COMESA Summit meeting in the Zimbabwean resort city of Victoria Falls. A customs Union of the region will be launched during the summit meeting by 19 African state leaders.

On how this could also benefit China, he said the current economic crisis had resulted in many companies shutting down in China. But if Chinese companies had taken advantage of COMESA with its access to the European market, they could have managed to operate from Africa and still export to Europe and the Americas while fulfilling Africa’s quota.

“So the challenge is that China needs to not only invest in resource extraction like mining et cetera, but we also need to see Chinese investment in manufacturing. I know that they have investments in services, restaurants and so forth, but that is not good enough because we must begin to add value. For instance you have the China Non-Ferrous Metal Corporation in Zambia where they are building their exclusive economic zone.”

However, he thanked China for the support it has continued to render to Africa in general and COMESA in particular.

On whether the COMESA market was big enough to absorb Chinese investment, Ngwenya said the region was a huge market of 400 million inhabitants, and the fact that China has always been selling to the region meant that the market was there.

“But regarding infrastructure investments, I would urge that the strategy should be that China should come together with our own companies to build capacity and at the same time implement these projects because if they are implemented without any local participation, there would be no transfer of knowledge and skills, “he said

He said joint ventures like the Tazara railway line between Zambia and Tanzania were the ideal partnership.

Ngwenya also urged China to cooperate more with COMESA as a regional grouping rather than with individual countries. “There are certain things that we can do regionally like for instance in terms of trade, in terms of investments, although they will take place at the national level.”
(chinadaily.com.cn)

BEIJING, — The union is the second crucial step taken by the Common Market for Eastern and Southern Africa, or COMESA, as the continent moves toward economic integration. The 19-member bloc was established in 2000 to become Africa’s first free-trade area.

As Africa’s largest trading group, the regional customs union aims to lift tariffs among member states and reduce trade barriers with third parties.

Sunday’s summit followed a Council of Ministers meeting from Tuesday to Thursday, and talks between COMESA foreign ministers on Friday and Saturday.

In other developments, Zimbabwean President Robert Mugabe replaced his Kenyan counterpart, Mwai Kibaki, as COMESA’s chairman.

The summit, which had originally been set for last year, was postponed twice, the first time to allow the host country Zimbabwe to complete its electoral process amd form an all-inclusive government.

The meeting was postponed again while organizers studied issues related to Free Trade Areas and common external tariffs.

Xinhua News Agency correspondents reporting from Victoria Falls. (XHTV)
Editor: Chris

Johannesburg - China will intensify its efforts to obtain resources assets in Africa after the failure of its attempt to gain a stake in Rio Tinto’s iron-ore and copper mines.

Martyn Davies, one of the country’s foremost experts on Chinese relations, says certain officials in the Chinese government will be seriously disappointed and frustrated about the partnership announced between BHP Billiton and Rio Tinto on Friday.

This has spiked the plans of Chinalco, China largest aluminium producer, to acquire a $19.5bn interest in Rio Tinto.

“The government will probably interpret this as a political decision against the Chinese acquiring overseas assets,” Davies commented over the weekend from Beijing, which he is visiting.

He reckons certain Anglo American assets would be particularly attractive to China.

The deal between Billiton and Rio will help Rio’s massive debt problem, but at the same time will impede outsiders’ access to the Pilbara region, the world’s richest iron-ore field that is the closest to China.

Chinalco would have acquired 15% of Hamersley Iron, Rio’s iron-ore company in the Pilbara. Hamersley and Robe River, Rio’s second iron-ore producer in the Pilbara, will now merge, forming a 320m ton/year producer in the already concentrated iron-ore market.

The extensions that can be developed thanks to the partnership will boost iron-ore production by the Pilbara region to more than 350m tons.

Billiton has seven iron-ore mines in Pilbara and Rio eleven. At least two ore bodies currently belonging to Rio can be developed owing to the partnership because their ore can now be delivered to a port using a Billiton rail line.

Brazil’s Vale will then be the second largest producer, with an output of some 220m tons/year. The shipping costs for Vale’s ore from South America will however make it virtually impossible for the Brazilian company to beat the two Australians on the threshold of China’s numerous steel mills once the steel market recovers from its current slump.

Kumba, Anglo’s iron-ore subsidiary that manages Sishen in the Northern Cape, is next on the list, yet far behind.

Kumba currently produces just less than 40m tons/year. Kumba is, however, doing extremely well owing to the quality of its lump ore.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.(fin24.com)

Five African leaders will attend the World Economic Forum on Africa in Cape Town next week.

Speaking at a media briefing in Johannesburg on Friday, the forum’s director Katherine Tweedie said heads of state who had confirmed their participation included presidents Jacob Zuma, Kenya’s Raila Amolo Odinga, Lesotho’s Pakalitha Mosisili, Rwanda’s Paul Kagame and Zambia’s Rupiah Bwezani Banda.

The World Economic Forum - which takes place from 10 to 12 June - will feature over 800 participants from 50 countries.

“Most of South Africa’s Cabinet will be there too,” Tweedie said.

Explore opportunities

She added there was a need now, more than ever before, “to explore how macro-economic shifts are shaping the global agenda and how these trends are affecting Africa’s diverse economies”.

She said the meeting would facilitate discussions among leaders on the immediate problems the global economic crisis posed to Africa.

The forum would also allow leaders to “fully explore the unique opportunities that Africa has on its doorstep in the new global arena”, Tweedie added.

While the forum was in progress, the one year mark to the kick-off of the 2010 World Cup would be celebrated, Tweedie said.

“The forum will discuss the World Cup - both the economic and social impact of it.”

China would also be represented at the forum by the Chairman of the Industrial and Commercial Bank of China, Jiang Jianqing.

“China is usually thought of in relation to resources, but this time it’s finance,” Tweedie said, adding that it was this Chinese bank that had bought 20% of South Africa’s Standard Bank.

The group chief executive of Standard Bank, Jacko Maree, would also participate in the forum’s discussion entitled “Exploring China’s New Silk Road”, she said.

Agriculture

Another important discussion would be held on the G20 meeting and would be led by those who had attended the recent G20 discussions such as National Planning Commission Minister Trevor Manuel, Donald Kaberuke, president of the African Development Bank and Ngozi Okonjo-Iweala of the World Bank.

Agriculture would also feature on the forum’s agenda.

“We want to know what is stopping Africa from becoming the breadbasket of the world,” Tweedie said.

Former secretary general of the United Nations Kofi Annan would join the discussion on agriculture, Tweedie added.

Women

It was important to note that 20% of the participants at this year’s forum were women.

“It is fitting that we have discussions about women,” she noted.

The interactive session entitled “The Girl Effect in Africa” would deal with the issue of empowering young girls in order to break the cycle of intergenerational poverty and help build a sustainable economy.

“Investing in girls’ education, sexual and reproductive health and economic empowerment has powerful multiplier effects on families and communities.”

Tweedie said that former president Nelson Mandela’s wife Graca Machel - who would attend the forum in her capacity as president of the Foundation for Community Development in Mozambique - had been particularly supportive of the forum in its endeavour to address women’s issues.

Sapa (southafrica.info)

China is offering a 9 percent value-added tax rebate on exports of several high-end steel products, the Ministry of Finance said on Monday June 8, in what analysts saw as the latest move to support domestic steel mills.

The country, the world’s biggest steel maker, will refund the tax on flat-rolled steel products and hot-rolled ferro-alloy products effective from June 1, the ministry said in a statement on its website.

The rebate cuts more than half off the value-added tax rate of 17 percent, giving producers a strong incentive to export the products covered by the rebate.

Chinese steel mills are facing losses this year, as exports have shrunk due to weakened overseas demand and relatively high export costs, since the central government had capped rebates in the past few years to try to restrict production.

“I think many steel mills can take advantage of this. They can apply for rebates on products if minor metals were added during production,” said Henry Liu, an analyst at Macquarie Bank in Shanghai.

The China Iron and Steel Association, the industry group that monitors all China’s major steel mills, has urged the government to adopt more generous export tax rebates for steel products to bolster the industry.

China has already encountered friction with its trading partners over its steel export tax rebates, including an anti-dumping investigation over steel pipe imports in the United States.

Source: Reuters June 8, 2009

LUSAKA (Reuters) -

China Nonferrous Metal Mining Corp. (CNMC) on Saturday pledged to invest $400 million in Zambia’s Luanshya Copper Mines (LCM) after formally taking over the running of the mines, officials said.

Mines and Minerals Development Minister Maxwell Mwale said CNMC would also develop the Mulyashi project, which previous owners of LCM had said could start producing 60,000 tonnes of copper cathode by 2010.

“It is the expectation of the government that CNMC will invest no less than $400 million in re-opening Baluba mine and developing the Mulyashi project,” Mwale said during the ceremony to hand over the mine to CNMC.

Both Baluba and Mulyashi are part of LCM, a joint venture of International Mineral Resources (IMR) and Bein Stein Resources Group (BSRG), which also operated Chambishi Metals Plc, the southern African country’s largest cobalt producer.

CNMC Vice President Tao Xinghu said CNMC would reopen Baluba and develop Mulyashi as soon as possible, but he gave no timeframe.

“For Mulyashi, we need to carry out (a new) study and make a new development plan,” Tao said.

The minister said the re-opening of the Baluba mine would make it possible to reemploy some of the 1,740 miners who were laid off after the mine was placed under care and maintenance at the end of last year.

CNMC’s Xinghu said at the ceremony the company had commissioned the Chambishi smelter after a $520 million investment in the operation and its support facilities.

Tao said the smelter, with an annual capacity of 150,000 tonnes, would help Zambia increase its output, estimated to reach 600,000 tonnes in 2009.

“Our investment in Zambia and in Luanshya aims for long-term development rather than for profits in a short time,” Tao said.

Mwale also said the government had raised its own stake in Luanshya to 20 percent from 15 percent, following the pledge it made earlier this year to raise state shareholding in all the mines to 35 percent in a bid to influence decisions in the running of the mines, the country’s economic lifeblood.

(Reporting Shapi Shacinda; Editing by Agnieszka Flak and Keiron Henderson)

Sierra Leone President Ernest Bai Koroma (L) shakes hands with China’s Shanghai mayor Han Zheng during their meet in Shanghai, east China, on May 29, 2009. Ernest Bai Koroma, accompanied by Chinese ambassador to Sierra Leone Qiu Shaofang, paid a visit to Shanghai on Friday. [Photo: Xinhua/Pei Xin]

President of Sierra Leone Ernest Bai Koroma on Friday hoped to expand cooperation with Shanghai in various fields.

In his meeting with Shanghai Mayor Han Zheng, Koroma highly spoke of the rapid economic growth of China.

“We can learn from China and expand bilateral cooperation in trade, agricultural, tourism and mining sectors,” he told Han.

Shanghai is speeding up its efforts to prepare for the World Expo, due to be held in 2010.

“It is the first time for a developing country to host the event,” Han said, adding there is a special hall pertaining to African countries.

After hearing the introduction, Koroma said he wished the expo a great success.

Koroma also visited the Baosteel, a steel giant, the local urban planning museum and Yu Yuan, a tourist attraction. Koroma arrived in Beijing on Sunday for his first state visit to China since assuming presidency in September 2007.

1  2 3 4 (english.cri.cn)

Deborah A. Br?utigam, an associate professor of the School of International Service, was in Nigeria for two weeks as part of a research work on the impacts of Chinese engagement in Africa. Br?utigam, who will tour not less than 12 African countries in the course of the project spoke to ONYEDIKA AGBEDO on her findings concerning Nigeria, with a verdict that it stands a chance to benefit from the relationship in the long run if well harnessed.

What informed your current visit to Nigeria?

I have been here for two weeks as part of a research project on Chinese engagement in Africa. I chose to come to Nigeria because I have been here three times before now.

However, my mission this time is to see how Chinese engagement is doing in the country and what impacts it is having on the country’s economy. The intention is to approve or disprove what I read in the newspapers about China and Africa.

The study is part of a book project I am writing a called the Dragons Gift, which will tell the real story of China in Africa. I have visited some countries in Africa in for this purpose. I have been to Sierra Leone, Tanzania, Zambia, Mauritius and South Africa and I expect to go to Zimbabwe and Mozambique soon. I have an assistant that is also going to Ethiopia, Egypt, Kenya and Uganda. He will equally go back to Zambia.

What are your findings so far from these expeditions?

Well, I would say it is a mixed impact here in Nigeria. On the one hand, a lot of Nigerian manufacturing companies have been battered by competition. I went to Nnewi in Anambra State where I first visited in 1991 and then in 1994 and found that a lot of the industries I visited then have folded up because they could not face the competition from China. People said Nigerian industries don’t really have a fair chance to compete because of the problems of power, poor road networks, unpredictable taxes, poor water supply and poor security, among others. These problems combine to make their products and services cost higher, which results in unfair competition.

On the other hand, one can also see some very interesting signs in the Nigerian engagement with the Chinese companies. In Nnewi I found out that there are some robust factories in the town, which had Chinese partners. There are other factories that had only Chinese technical partners where they don’t put in any money but put in the expertise. This was interesting to me because such partnerships are helping some new industries take off again in Nnewi. So, on the one hand is the Chinese competition and on the other hand you have the Chinese stimulating industrial development in Nigeria.

The competition might seem harmful to the Nigerian economy at present but in the future, I think it is quite possible that the technical cooperation could aid in the industrialisation of Nigeria. It is possible.

Of what benefit is this study to you and the American academic community as a whole?

Actually, I was commissioned to write the book by the Oxford University Press in England. They asked me to do that because 10 years ago, I published a book on Chinese aid to Africa. Initially, not many people were interested about China and Africa and I was one of the few experts that really undertook to look at that. So, when the Oxford University Press learnt that I had worked on in the past, they asked me to write a fresh book on the topic for further explanation and understanding.

I think the United States and Europe are very concerned about China. In fact, I find the United States and Europe more concerned about China coming to Africa than Africans themselves. It makes me think that a lot of people are afraid of China in my country and see China as a threat to American interest. May be, they also think that China is a threat to Africa. So, that is what I am trying to work out, to find out whether China is really a threat to Africa or it is merely being misconceived. I would also be looking at what the good things about this relationship are and then the demerits. So, I am trying to sieve facts from fiction, realities from myths. I may not be able to get to the bottom of if here but I think by being here, I would be in a better position to forge ahead than if I had not come at all.

I visited the Chinese Embassy in Nigeria and they gave me some statistics. I understood that they have invested about $6 billion so far in Nigeria. So they are growing in putting industries here. I don’t know how Nigerians regard them; what the impression is, but I think it is interesting that they have been here. Some of the companies have been working in Nigeria since 1979. That makes it 30 years. So, it has been a long time and a long relationship.

What material benefit do you hope to gain after this study or you are just doing it for academic fulfilment?

As a scholar, I think there is a benefit to understand what is really happening between China and Africa. As I earlier said, there are a lot of people that are interested in the topic. But I think they have some mistaken ideas already that have become widely accepted.

There is this believe that Chinese aid is so big on Africa, but it is not. There is also the belief that China is only interested in oil but it is interested in business. The trading between China and Nigeria is mostly Chinese export to Nigeria. Last year Nigeria exported almost no oil to China but they exported a lot of goods to the country. For America, I think China is competing really with us. They are penetrating our markets. So, they are just competitors like Japan is today and they are not as threatening as some people in America seem to think. I don’t think they are very different actors in Africa.

How would you react to the view in some quarters that Nigeria has become a dumping ground for Chinese products, which are allegedly sub-standard mostly?

I guess this is the way to look at it. China produces some of the best products in the world now. But they are also producing very poor quality products that are very cheap. So, when Nigerian traders go to China to import goods to the country, they have a choice. They can buy the best quality or go for the cheap goods. The Chinese would sell to them. So, what they bring back is a lot of what you have in the market. If you go to a shopping mall in Lagos, you can get very good quality things from China and you will pay more. But if you go for the cheap ones, which are of poor quality and it breaks down the next day, then you got what you bargained for. So, I would not say that they are actually dumping their goods in Nigerian markets. The technical definition of dumping is selling something below cost, which I believe is not what is going on. It is only a question of ensuring proper regulation by the authorities to safeguard the health of the citizenry.

We have had the same issue in America and even China in the past. So, these things are problems elsewhere and it is probably as a result of an early stage of capitalism without good regulatory systems in place. So beefing up your own standards, health inspectors and borders would help to protect Nigerians. But at the end of the day, you get what you paid for in terms of the quality of goods.

Let me take you back to your trip to Nnewi. What exactly were your findings about some of the companies you visited in the past that have folded?

Let me say that it is natural for companies to fold. It is unnatural for companies to succeed. If you look over a 10-year period and the businesses that were started then, most of them have gone out of business. That is the natural way that it happens. It is competition.

An Australian economist that visited the United States sometime ago gave us this idea of creative destruction. He said capitalism is not about destruction but about creative destruction because new products and new competition will make things better. So, that is one thing that is going on in Nnewi. Another thing that has happened over the course of industrialisation is that some of the smaller companies will go into a business and after sometime become bigger and diversified. This has also happened in Nnewi.

There is the Ibeto group, which was before now a very small business until it grew and diversified. There is also Chikason, which started off an agro industry in a very small scale but it has now become very large. There is Innoson, which started with a motorcycle assembly. Now he has built a factory in Enugu where he would be producing tyres and assembling vehicles. There are many more companies like that which have taken the place of the other ones which are using simpler technologies and not able to compete.

It is probably the result of Nigeria liberalising trade over the past decade over the past decade or so and making competition greater for Nigerian manufacturers. But again if the Nigerian government could guarantee infrastructure, a lot of businesses in Nnewi would bounce back because they are very entrepreneurial. Inadequate infrastructure constitutes extra costs for manufacturers and they don’t have these kinds of problems in China by and large.

Which other parts of the country do you intend to visit apart from Nnewi and Enugu?

I have been to Abuja, the Federal Capital. I am now in Lagos where I will be visiting some of the companies.

When do you hope to complete the study?

Well, I have gone very far now and hope to get the work out soon.

With what you have seen so far, to what extent do you think China could assist in the industrialisation of Africa?

The Chinese are interested in investing outside their country now. They have a policy called the New Centre Back 2001, otherwise known as going global. For over a period of 20 to 30 years, the Chinese government has invited foreign investments into China. They have invited foreign industries and technologies and learnt about how to do things. Now the government is try to push Chinese companies to go out and become multinational corporations and invest overseas. So they have been doing that since 2001 and are interested in coming to Africa.

You may not know it but there are two special economic zones that the Chinese are setting up in Nigeria. The Chinese found that the special economic zones were very useful for their own development in the past and now they want to do such overseas. Right now they have seven in Africa with two situated in Nigeria. These zones would have their own power supply and infrastructure and would be close to the port and I think they would be doing manufacturing and exports from there. They are doing it in Zambia, Egypt, Algeria, Ethiopia and Mauritius with the support of their government. And so, I see their interest in the industrialisation of Africa as very real. I think you would be seeing more Chinese companies coming here when the zones are finished.

There will be benefits in the form of employment. You can also benefit through technology transfer. I don’t know what the system is but it is possible that Nigerians could also invest in those special economic zones. I don’t know for sure if it is possible but I know in some countries it is possible for local industries to invest in those zones. And if your government is smart it would ensure that Nigerians could also invest there.

This is your fourth visit to Nigeria. What is your impression about the country?

Well, when I first came here there was no Abuja so that is a big change. But I think a lot of things are still the same. A lot of the challenges are still here especially in infrastructure. When I came here in 1987, people said NEPA meant ‘Never Ever Power Again.’ And they are still saying that today. I am wondering when it would become over.

I think the country should at appoint figure out something other than NEPA to provide power. In Abah there is an interesting experiment going on by Geometrics. I didn’t visit the place but I understood the man is trying to do an independent power production. If more of this could happen around the country, may be the people could take care of the power problems themselves.

I keep coming back to Nigeria because I really like it; I enjoy the country. And Nigerians are the most amazing people. They are so intelligent, so full of ideas and creativity that I think if channelled to how the country could be developed, it would just take off. Nigeria is a country with so much potential but being held back. I wish it good luck.

(ngrguardiannews.com)

The Export-Import Bank of China has agreed to finance construction of the 1,500-MW Mphanda Nkuwa hydroelectrict project on Mozambique’s Zambezi River.

Mozambique’s O Pais newspaper quoted Energy Minister Salvador Namburete saying construction of the US$2 billion dam is to begin in 2010 in the northern Tete Province. The China Exim bank’s US$2.3 billion loan package also includes funding a transmission line from the dam site to Maputo, the capital.

A detailed proposal for construction of Mphanda Nkuwa boosted the capacity of the proposed project to 1,500 MW from 1,300 MW in 2007. Additionally, the project is seen potentially expanding to 2,400 MW. (HydroWorld 3/19/09)

“We expect to finalize concession contract negotiations with the electricity company (Electricidade de Mocambique) and other clients by June this year, then conclude financial deals,” Namburete said. “We expect the process to be finalized by December this year and construction should begin between April and May next year.”

International law firm Linklaters was appointed project counsel to Mphanda Nkuwa in 2008. (HydroWorld 10/30/08) The project is being developed by Brazil construction firm Camargo Correa, national utility Electricidade de Mocambique (EDM), and Energia Capital to supply power to Mozambique, South African utility Eskom, and the Southern Africa region.

Mphanda Nkuwa is to be built 60 kilometers downstream from the existing 2,040-MW Cahora Bassa hydroelectric project on the Zambezi River (HydroWorld 5/7/09), as well as the proposed 800- to 1,200-MW Cahora Bassa North hydro project. (HydroWorld 12/2/08)

EDM recruited consultants in March to serve as procurement specialist for a transmission backbone system to deliver power from proposed new hydro and thermal power plants in the area to southern Mozambique. Some of Mphanda Nkuwa’s electricity would be used in Mozambique, with the surplus exported to other countries of the Southern African Development Community.

(hydroworld.com)

LUANDA (AFP) — In the lobby bar of one of Luanda’s few decent hotels, suited businessmen sit in deep leather armchairs waiting for a meeting in the oil-rich country which could change their fortunes.

“Angola is one of the last great emerging market opportunities,” one European man told AFP between sips of whisky.

“I don’t care about the logistical problems as long as the solutions and rewards are there — I’m in this for the long term to make money.”

Thanks to high oil prices and a peacetime construction frenzy, Angola has enjoyed annual double-digit growth since a 27-year civil war ended in 2002 to become one of the world’s fastest growing economies.

Growth is set to slow this year, but interest from international investors has not abated with a recent flurry of high profile trade delegations, all hoping to get a piece of the action.

The government’s response to falling commodity prices, which threaten public spending aimed at Angola’s poor majority, is diversification into areas such as agriculture and manufacturing.

Until now, Angola’s main foreign players have been Brazilian and Portuguese firms, and Chinese companies helped along by close ties and credit lines believed to exceed five billion dollars.

But along with visits from the United States, France and South Korea in the past month, there have also been business forums in Rome and Cairo and state visits by President Jose Eduardo dos Santos to Germany and Portugal.

Last week a trade agreement was signed with US Secretary of State Hillary Clinton in Washington.

Among the recent American delegation was Delta Air Lines which hopes to launch the first direct scheduled flight from the United States to Luanda in September.

“There’s no question, Angola is a very strong market and there is a lot of potential,” the airline’s government affairs advisor Scott Yohe told AFP.

“The amount of time it takes to get to Angola from the US, via Europe or via South Africa, has an impact on trade and the new flight will definitely be a catalyst for investment.”

Dubai-based Emirates starts flying three times a week from Luanda to Dubai in August.

“Angola is a country which is really moving,” explained Nigel Page, senior vice president of Emirates in Americas and Africa.

“We predict that there will be a lot of business exchanges between Luanda and Dubai and this route will channel more companies into Angola from the east.”

There is already plenty of Asian investment in Angola, particularly from China which holds a number of key construction contracts, including four 2010 Africa Cup of Nations football stadiums.

China’s interest in Angola has aroused concern in the west, especially as a number of the loans have been oil backed, but Alex Vines, of the London-based think tank Chatham House, believes the Sino-Angolan relationship may be waning.

“From a geo-strategic point of view, Angola wants to woo lots of different investment, not just from China,” he told AFP.

“And that’s why we’ve seen Dos Santos making these high profile visits to Europe and these other trade trips being invited to Angola.”

Despite predicting a three-percent contraction in 2009, World Bank economist Ricardo Gazel said: “Angola’s economy is still in a much better position than most and medium and long term, the prospects are very good.

“There is a lot of investment interest, particularly in the non-petroleum sector which is good for diversifying the economy and for the economy as a whole.”

For businesses hoping to break into the Angolan market however, it’s not easy and good contacts go a long way.

The World Bank’s Doing Business Report ranks Angola as one of the hardest places to set up a company with 68 days needed to start a business, although this has halved since 2008.

But, big on capital if low on know-how, Angola has been spreading the word about investment opportunities and it seems the world is listening.