China is Building Big in Africa!

 

 

China is Building Big in Africa!

China is Building Big in Africa!

China is Building Big in Africa!

As Chinese President Xi Jinping once pointed out, “Inadequate infrastructure is believed to be the biggest bottleneck to Africa’s development.” Collectively, the countries of Africa would need to spend $130-$170 billion per year to meet their infrastructure needs, but, according to the African Development Bank, they are coming up $68-$108 billion short.

“Europeans built infrastructure in Africa at the turn of the century, purportedly also for local economic development, but in essence the projects were used for natural resource extraction. The predecessor of both the Nairobi-Mombasa and Addis Ababa-Djibouti railways can be categorized as such. Both connect inland . Closing Africa’s infrastructure gap has been the obsession of multiple waves of colonists, and China is the next in line to reach into the heart of the continent with railroads, highways, and regions with mineral deposits with major ports on the Indian Ocean,” wrote Xiaochen Su on The Diplomat.

Infrastructure is what Africa needs most and infrastructure is what China is most equipped to provide. It is not lost on many African leaders that hardly 30 years ago China was in a similar place that they are now — a backwater country whose economy made up hardly two percent of global GDP. But over the past few decades China shocked the world in the way that it used infrastructure to propel economic growth, creating a high-speed rail network that now tops 29,000 kilometers, paving over 100,000 kilometers of new expressways, constructing over 100 new airports, and building no less than 3,500 new urban areas — which include 500 economic development zones and 1,000 city-level developments. Over this period of time, China’s GDP has grown more than 10-fold, ranking #2 in the world today.

It is precisely this kind of infrastructure-induced economic growth that Africa is looking for right now, and many African leaders are looking to China to bring their experience to their countries. The central players in many of Africa’s biggest ticket infrastructure projects — including the $12 billion Coastal Railway in Nigeria, the $4.5 billion Addis Ababa–Djibouti Railway, and the $11 billion megaport and economic zone at Bagamoyo — are being developed via Chinese partnerships.

Since 2011 China has been the biggest player in Africa’s infrastructure boom, claiming a 40% share that continues to rise. Meanwhile, the shares of other players are falling precipitously: Europe declined from 44% to 34%, while the presence of US contractors fell from 24% to just 6.7%.

“The Chinese SOEs they are really taking over the market of infrastructure projects in Africa. It’s true to say that everywhere you go in East Africa you see Chinese construction teams,” said Zhengli Huang, an associate at the University of Sheffield who has carried out extensive case studies on urbanization in Nairobi.

The reasons for this ubiquitous presence are rather straight forward, as Roggeveen points out: many African contractors simply don’t have the capacity for major development projects, “so if you want to do large-scale construction you either turn to a western firm or to a Chinese firm, but the Chinese firm is always able to undercut you on price.”

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