After a decade of economic and political engagement with Africa, China’s significance as an influencer and investor on the continent is in little doubt.
However, until now the predominance of Chinese investments in infrastructure and other broader forms of capital injection had seen the country under-represented as a greenfield investor in the continent. This appears to be changing, according to annual figures from fDi Markets, a Financial Times service that tracks greenfield foreign direct investment.
While the US remains the most prolific investor into Africa when measured by the number of greenfield projects, China has surpassed it in terms of the volume of investment, the first time since fDi Markets’ records began in 2003.
“China’s rise to the top spot . . . comes because its investors have excelled in the areas that took the lion’s share of overall investment into the region in 2016: notably, construction and real estate,” commented Adrienne Klasa, editor of FT specialist publication This Is Africa and of a report recapping last year’s Africa investment trends.
However, Chinese investment was somewhat inflated by announced megaprojects, including China Fortune Land’s planned $20bn investment to help build Egypt’s new administrative capital, a project that has had many fits and starts since its inception and over which terms are still being negotiated.
Real estate was the top sector by capital investment in Africa in 2016, accounting for $36.5bn (or 40 per cent) of announced greenfield FDI in the region; construction was the top business activity by capital investment, also accounting for 40 per cent. Combined, construction and manufacturing accounted for almost two-thirds of total capital investment.
Source: Financial Times