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By Xinhua writer Zhu Shaobin
NAIROBI (Xinhua) -- Chinese
engagement is helping create an infrastructure boom
across Africa, giving rise to a motley of mega-projects
that create jobs and boost economic growth while
cushioning an economic slowdown the region faces.
In its
latest World Economic Outlook released Tuesday, the
International Monetary Fund (IMF) forecast the
sub-Saharan Africa’s economy will only grow 2.6 percent
in 2017, well below its global growth forecast of 3.5
percent.
The subdued
growth outlook for the region is largely because of ugly
data registered in the region’s two biggest economies
that account for about half of regional output. The
report said in 2016 growth in South Africa grew only 0.3
percent while the Nigerian economy contracted 1.5
percent amid low international oil and commodity prices.
The IMF predicted only a modest 0.8-percent growth for
both countries this year.
However,
behind the seemingly bleak outlook, there is a silver
lining in terms of the diversity in some other African
countries keen to invest heavily in infrastructure
projects to boost growth, often with China’s
involvement.
Thanks to a
more diversified economic structure and infrastructure
investment binge, East Africa’s largest economy Kenya
has maintained a growth rate of around 6 percent.
In Kenya, a
standard-gauge railway (SGR) stretching about 480 km and
linking its capital Nairobi with Mombasa port is
changing the country’s landscape with brightly-colored
trains and shiny modern stations. The project, due to be
launched in less than two months, is constructed by a
Chinese firm and sources most of its funding through
concessional loans from a Chinese state-owned bank.
Kenya
Investment Authority CEO Moses Ikiara predicted the
completion of the first phase of the SGR would greatly
increase the speed at which freight moves and cut the
cost of freight transportation by up to 40 percent. Due
to lower logistics costs, Ikiara said companies can
produce at more affordable costs.
Kenya
Railways Corporation managing director Atanas Maina said
in a signed article published recently in local media
that the railway will promote the development of many
industries, including agriculture, mining,
manufacturing, energy and tourism, and drive the
formation of towns along the line, create jobs and bring
higher income for workers.
In recent
years, other major projects with heavy Chinese presence
have included the Addis Ababa-Djibouti railway launched
in October 2016. It offers a vital route to sea for
landlocked Ethiopia; Last April, the 680-meter Kigamboni
Bridge, the first of its kind in east and central
Africa, was also launched to better connect Tanzania’s
largest city Dar es Salaam to the Kigamboni district
across the Kurasini creek. Both Ethiopia and Tanzania
have been among African countries reporting high
economic growth.
The IMF
earlier this month also cited an infrastructure boom in
the small Horn of Africa nation Djibouti, which seeks to
become a transshipment hub in East Africa.
Djibouti’s
growth is estimated to have reached 6.5 percent last
year. The country also targets medium-term growth of
7.5-10 percent per year through infrastructure
investment. The IMF noted Chinese investors are
financing many of the projects including railway, port,
and a water pipeline connecting to Ethiopia.
Data from
China’s Ministry of Foreign Affairs show China has built
more than 5,000 km respectively of railways and roads
for Africa through its aid and financing. The country
also helped train more than 160,000 local people.
At present,
accelerating the development of infrastructure in
energy, transport and ICT sectors has become a wide
consensus among African countries in driving economic
growth, but financing has been a huge challenge. Africa
requires Chinese soft loans and grants to support
infrastructure development.
“I regard
Chinese engagement with Africa as really
transformational both in trade, investments and
infrastructure development, there has been positive
impact on Africa’s growth trajectory,” Lemma Senbet,
executive director of the African Economic Research
Consortium, told Xinhua in an interview.
Senbet said
China has eclipsed traditional African allies in the
West to become the leading source of foreign direct
investment in the continent, and African countries
should seek China’s involvement as they embark on
economic diversification, regional integration and
strengthening of political institutions.
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