New report: Guide to Chinese private investment in Africa
New ITC publication identifies opportunities for Chinese private investment in five African countries
ITC today launched the Guide to Chinese private investment in Africa: Insights from SME competitiveness surveys at the China International Import Expo in Shanghai. The report contains competitiveness data for African firms in the Gambia, Ghana, Kenya, Morocco and Zambia that can guide Chinese private investors.
‘The main challenge for investors is finding information on the availability and quality of local suppliers. This report aims to address this challenge,’ says ITC Executive Director, Arancha González.
While state-owned Chinese companies in Africa focus on infrastructure, energy, construction and resource-related sectors, private investment largely goes into manufacturing, services, trade and real estate. Rising labour costs in China are spurring Chinese companies in labour-intensive industries such as textile, leather and light manufacturing to offshore their production.
Insights into African competitiveness
The report finds that each country has specific areas of untapped potential for investment and for economic growth in Africa.
In the Gambia, the information and communications technology (ICT) sector stands out for its potential to absorb young employees and managers; 45% of its two million residents are under the age of 15. The ICT sector in the Gambia has been able to employ more employees below 35 years old than agriculture and tourism.
Investing in textiles in Ghana offers preferential access to third markets such as the United States and the European Union, a channel that remains largely untapped.
The agriculture and food-processing industry in Kenya is ready to take advantage of good quality infrastructure in the region.
Metallic, electronic and electric products in Morocco offer a huge investment opportunity. Firms in this sector seem more competitive than the average manufacturing firm in Morocco, based on the share of companies holding internationally recognized certifications.
In Zambia, there is untapped potential for business and logistics services, as they report that output could increase by 45% without investing further into resources.
The insights are based on ITC SME Competitiveness Surveys in the five countries with small and medium-sized firms. They focus on investments that have the potential to strengthen forward and backward linkages between Chinese firms and African local economies, by reporting on the capability of firms and quality of business ecosystems in the five African countries.