African Leaders in Beijing Eyeing Big Loans and Investment

People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
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African Leaders in Beijing Eyeing Big Loans and Investment

People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)
People pass by signage for the Summit of the Forum on China-Africa Cooperation (FOCAC) in Beijing, China, 01 September 2024. (EPA)

African leaders descend on China's capital this week, seeking funds for big-ticket infrastructure projects as they eye mounting great power competition over resources and influence on the continent.

China has expanded ties with African nations in the past decade, furnishing them with billions in loans that have helped build infrastructure but also sometimes stoked controversy by saddling countries with huge debts.

China has sent hundreds of thousands of workers to Africa to build its megaprojects, while tapping the continent's vast natural resources including copper, gold, lithium and rare earth minerals.

Beijing has said this week's China-Africa forum will be its largest diplomatic event since the Covid-19 pandemic, with leaders of South Africa, Nigeria, Kenya and other nations confirmed to attend and dozens of delegations expected.

African countries were "looking to tap the opportunities in China for growth", Ovigwe Eguegu, a policy analyst at consultancy Development Reimagined, told AFP.

China, the world's number two economy, is Africa's largest trading partner, with bilateral trade hitting $167.8 billion in the first half of this year, according to Chinese state media.

Beijing's loans to African nations last year were their highest in five years, research by the Chinese Loans to Africa Database found. Top borrowers were Angola, Ethiopia, Egypt, Nigeria and Kenya.

But analysts said an economic slowdown in China has made Beijing increasingly reluctant to shell out big sums.

China has also resisted offering debt relief, even as some African nations have struggled to repay their loans -- in some cases being forced to slash spending on vital public services.

Since the last China-Africa forum six years ago, "the world experienced a lot of changes, including Covid, geopolitical tension and now these economic challenges", Tang Xiaoyang of Beijing's Tsinghua University told AFP.

The "old model" of loans for "large infrastructure and very rapid industrialization" is simply no longer feasible, he said.

The continent is a key node in Beijing's Belt and Road Initiative, a massive infrastructure project and central pillar of Xi Jinping's bid to expand China's clout overseas.

The BRI has channeled much-needed investment to African countries for projects like railways, ports and hydroelectric plants.

But critics charge Beijing with saddling nations with debt and funding infrastructure projects that damage the environment.

One project in Kenya, a $5 billion railway -- built with finance from Exim Bank of China -- connects the capital Nairobi with the port city of Mombasa.

But a second phase meant to continue the line to Uganda never materialized, as both countries struggled to repay BRI debts.

In central Africa, Western and Chinese firms are racing to secure access to rare minerals.

The continent has rich deposits of manganese, cobalt, nickel and lithium -- crucial for renewable energy technology.

The Moanda region of Gabon alone contains as much as a quarter of known global reserves of manganese, and South Africa accounts for 37 percent of global output of the metal.

Cobalt mining is dominated by the Democratic Republic of Congo, which accounts for 70 percent of the world total. But in terms of processing, China is the leader, at 50 percent.

Mounting geopolitical tensions between the United States and China, which are clashing over everything from the status of self-ruled Taiwan to trade, also weigh on Africa.

Washington has warned against what it sees as Beijing's malign influence.

In 2022, the White House said China sought to "advance its own narrow commercial and geopolitical interests (and) undermine transparency and openness".

Beijing insists it does not want a new cold war with Washington but rather seeks "win-win" cooperation, promoting development while profiting from boosted trade.

"We do not just give aid, give them help," Tsinghua University's Tang said.

"We are just partners with you while you are developing. We are also benefiting from it."

But analysts fear African nations could be forced to pick sides.

"African countries lack leverage against China," Development Reimagined's Eguegu said.

"Some people... think you can use the US to balance China," he said. "You cannot."



French Companies to Inject New Investments in Egyptian Market

Hossam Heiba, Chairman of the Investment Authority and Free Zones, signs a memorandum of understanding with the French Investment Promotion Agency in the presence of Hassan Al-Khatib, Minister of Investment and Foreign Trade. (Egyptian Investment Authority)
Hossam Heiba, Chairman of the Investment Authority and Free Zones, signs a memorandum of understanding with the French Investment Promotion Agency in the presence of Hassan Al-Khatib, Minister of Investment and Foreign Trade. (Egyptian Investment Authority)
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French Companies to Inject New Investments in Egyptian Market

Hossam Heiba, Chairman of the Investment Authority and Free Zones, signs a memorandum of understanding with the French Investment Promotion Agency in the presence of Hassan Al-Khatib, Minister of Investment and Foreign Trade. (Egyptian Investment Authority)
Hossam Heiba, Chairman of the Investment Authority and Free Zones, signs a memorandum of understanding with the French Investment Promotion Agency in the presence of Hassan Al-Khatib, Minister of Investment and Foreign Trade. (Egyptian Investment Authority)

Several French companies have committed to making new investments in the Egyptian market across various sectors, including transportation, food, and pharmaceuticals.

According to a statement by Egypt’s General Authority for Investment and Free Zones (GAFI) on Saturday, companies such as Lesaffre (in yeast production), Alstom (transport), Sanofi (pharmaceuticals), and Decathlon (specialized retail in sportswear and equipment) have pledged to invest further in Egypt. These plans aim to leverage the significant improvements in the country’s investment infrastructure and legislative framework.

French investments in Egypt currently stand at approximately €7 billion (around $7.7 billion), distributed across 180 companies in various sectors. The companies’ commitment to expansion was made during a promotional visit to France by GAFI CEO Hossam Heiba, accompanied by Minister of Investment and Foreign Trade Hassan Al-Khatib.

The visit included participation in the Egyptian-French Business Forum held in Paris and Marseille, with the attendance of French Minister of Foreign Trade Sophie Primas and more than 350 French companies.

The Egyptian officials also held meetings with John Cockerill, a leader in hydrogen production equipment, representatives of bpi France, a French investment bank and the chairman of CMA CGM, a French logistics and maritime company and a key development partner of Egypt.

Heiba noted that Egypt has successfully attracted a significant number of global and French companies, benefiting from its strategic position as an investment and export hub for Africa. He emphasized that his country has maintained its position as the top African destination for investments in 2022 and 2023, with expectations of continuing this trend in the coming years. This is further supported by the record-breaking foreign direct investment, which reached $46.1 billion in the 2023-2024 fiscal year.

Additionally, Heiba signed a memorandum of understanding (MoU) with the French Investment Promotion Agency, which aims to sustain investment cooperation between Egypt and France, focusing on providing investor support, fostering partnerships between the two countries' business communities, and sharing data on target sectors and legislative developments. The agreement also covers the organization of investment promotion events and exploratory business tours.

The French side highlighted the substantial investments made by French companies in Egypt, particularly in telecommunications, healthcare, and cosmetics. Companies such as Valeo, Capgemini, Atos, and Orange Business Services operate in Egypt’s IT and communications sector, while Servier, AXA, AXA One Health, Sanofi, and Air Liquide have made significant contributions to the healthcare sector. L'Oréal is also a major player in the cosmetics industry.

This promotional visit is part of Egypt’s efforts aimed at expanding investment ties with Europe, following the 2024 Egypt-European Investment Conference held in Cairo in June, and the March 2023 announcement of an enhanced strategic partnership between Egypt and the European Union.