WB: Record investment in Africa spearheaded by China
China has taken the lead in building up infrastructure in some of the world’s poorest regions in Sub-Saharan Africa, the World Bank said in a new report released Thursday.
India and some Middle Eastern countries have also contributed to a record number of infrastructure projects being financed in southern Africa, an area of the globe that has long been neglected by international investors. In a growing sign of cooperation between developing countries, the World Bank said that emerging economies’ investment in Africa had jumped from an average $1 billion per year before 2004, to $8 billion in 2006 and $5 billion in 2007. Much of Africa’s infrastructure remains woefully inadequate and is cutting the continent’s growth rate by an average of 1% per year, due to extra transport costs and a lack of power generation. The new influx of funds could help address those inefficiencies, the bank’s report said.
But China has also gained from the partnership, acquiring $22 billion worth of natural resource exports from Sub-Saharan Africa in 2006, up from only $3 billion in 2001. Of those exports, 80% is petroleum to feed China’s surging energy needs. The complementary demands have created a win-win situation for both sides, according to Vivien Foster, a World Bank economist and lead author of the report.
“Chinas growing demand for natural resources is matched by Africas significant and often under-developed oil and mineral reserves,’” Foster said. “Africas urgent need for infrastructure is matched by Chinas globally competitive construction industry.” (m&c.com)
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