Graham Stock, Insparo Asset Management

China will remain valuable to Africa in the long-term

Wed, 17/04/2013 - 18:23

Graham Stock (pictured), chief strategist at Insparo Asset Management comments on China-Africa relations ahead of the China-Africa Business Summit…

“China is a source of valuable inward investment for Africa and will remain a long-term source of demand for African exports. The focus to date has been on oil and base and precious metals, with Chinese diplomatic and commercial activity particularly evident in Angola, Sudan, Nigeria, Zambia, the Democratic Republic of Congo, and Zimbabwe. We expect to see increased interest in the agricultural sector too, through demand for grain exports from southern Africa, long-term leases of undeveloped arable land across the continent, and investment in fertilizer production in North Africa. China’s attention to commodities also has a catalyst effect and will lead to investment in related infrastructure such as transport for the commodities, or as part of diplomatic overtures to improve relations with host governments and communities. If managed well, this new infrastructure has spin-off benefits for the broader economy which should be watched closely by investors.
 
“Indeed, although Europe and the USA still account for more than half of Africa’s trade and foreign investment stock, their share has quickly eroded and China leads a pack of upcoming emerging market trade partners.”


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