Africa Presentation
Transcript: What's this mean for Africa? "China’s approach to our needs is simply better adapted than the slow and sometimes patronizing post-colonial approach of European investors, donor organizations, and non-governmental organizations. In fact, the Chinese model for stimulating rapid economic development has much to teach Africa.” -Abdoulaye Wade, 2008 "We have turned East where the sun rises, and turned our backs to the West, where the sun sets." -Robert Mugabe “Business is business. We try to separate politics from business ... I think the internal situation in the Sudan is an internal affair.” - Deputy Foreign Minister Zhou Wenzhong Motivations: Energy Security (10% of oil from Africa) New markets (esp. for services) African backing in reforming international institutions Other raw materials Security concerns (Indian Ocean) Competition with China Aid/Assistance Relatively small part of India's aid (less than 5% of India’s total aid giving) Focus on technical assistance, esp. in health, technology,pharmaceuticals, infrastructure (related to resource extraction) Tend to work with regional groups (AU, NEPAD, ECOWAS, COMESA) Given through EX-IM bank, Ministry of External Affairs, soft power Trade •Expected to pass $50 billion •Moved from trade deficit to trade surplus with Africa •Export to: South Africa, Nigeria, Egypt as large, consistent export destinations refined petroleum products, medication, iron products •Import from: South Africa (largest), Morocco, Egypt, Chad, Sudan crude and refined petroleum as largest (66% in 2006), agricultural products, some manufacturing •India and SACU in talks for PTA •Indian Government offered duty-free tariff preferences under the least developed country preferences to 34 African nations 2008 Tata companies in Africa: Jaguar Land Rover SA Neotel Taj Hotels and Resorts Taj Cape Town Taj Pamodzi Tata Chemicals Magadi Tata Consultancy Services, SA Tata Motors Tata Power Cennergi Tata Steel KZN Tata Africa Holdings (SA) Blackwood Hodge Zimbabwe Tata Africa Cote D’Ivoire SARL Tata Africa Senegal Tata Africa Services (Nigeria) Tata Africa Steel Processors Tata Automobile Corporation SA Tata Ghana Tata Holdings Mozambique LDA Tata Holdings Tanzania Tata Kenya Tata Zambia "Historic debt" to Africa - Lula reference to the 3.5m African slaves shipped to Brazil Diversifying its markets - Africa needs infrastructure --> Brazil has lots of construction firms Africa has oil and minerals --> Brazil has myriad firms capable of extracting them Land and opportunities for Brazil's agribusiness firms Growth of Africa's middle class --> millions of potential new customers. Has increased from US$69 billion in 2001 to US$214 billion in 2009 However, Africa has not been a major destination for FDI from private Brazilians firms - only $281 million in 2001 and $125 in 2009 Largest concentrations of Brazilian FDI - South Africa and Angola Focused on energy, mining, and infrastructure. Brazilian companies as employers - Firms are quick to point out that "unlike China", they employ mostly locals to work for them. Brazilian construction firm Odebrecht is one of the largest private employers in Angola. Bilateral trade between Brazil and Africa doubled between 2000 and 2009, but fell between 2008 and 2010 due to declines in commodity prices. Exports to Africa between 2000 and 2010 - (US$1.3 billion to US$9.1 billion) resource-intensive manufactured goods, technological products, and primary products (Nearly 20% of these were to South Africa.) E.g.: Sugar and honey, rice, meat, vegetable oils, refined oil, and vehicles and automotive parts. Imports from Africa - increased more than fourfold between 2000 and 2008 (US$2.9 billion to US$15.7) Primarily primary products e.g. Crude oil from Nigeria Constraints/Concerns Inexperience of Brazilian firms abroad Lack of good infrastructure Poor communication channels and transportation for people and products Largely technical expertise and technology - tropical disease fighting and agriculture Examples: Mozambique - Brazil's government is opening a plant to make antiretroviral drugs to fight the AIDS epidemic. Brazil is lending $150 million to Kenya for infrastructure purposes in Nairobi. May 2012 - Brazil's top investment bank BTG Pactual unveiled plans to raise $1 billion to create the world's biggest investment fund for Africa, focusing on areas such as infrastructure, energy and agriculture. Trade and Investment Relations - Tanzania and China Since the 1960s - China has received more than 100 cooperation projects costing an estimated $2 billion USD Economic relations have gradually changed from aid and technical assistance to more flexibly given loans. China's largest and most expensive foreign aid project as of 2009 - Tanzania-Zambia (TAZARA) railway linking (1970-1976) Tanzanian govt. and the China Council for the Promotion of International Trade (CCPIT) signed a Memorandum of Understanding in March 2012 to improve trade and investment