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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

African economy needs more usage
of Chinese yuan: financial expert

By Tichaona Chifamba, Zhang Yuliang HARARE Zimbabwe (Xinhua) -- There has been a general consensus among some eastern and southern African countries that there should be more usage of the Chinese yuan in the region because of China’s growing influence in business and trade, a financial expert said Thursday.

Executive director of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) Caleb Fundanga said a forum for financial experts earlier in the week had agreed that there was need to use the Chinese yuan as a reserve currency because China was playing an active role in their economies.

The forum was attended by deputy central bank governors and deputy permanent secretaries of finance from 14 countries that fall under MEFMI.

“The general conclusion is that we should use the yuan more because its time has come. We are doing more business (with China) so it’s natural that we use the currency of the country with which we are trading.

“Just the way we have been using the (U.S.) dollar and the Euro, we want to use the Chinese currency more in our transactions because it is to our benefit,” he said.

He said use of the yuan could protect the region from currency volatilities.

The forum had also discussed the implications of using the Chinese currency and agreed that there was need for more information on markets and products on which it could be invested.

“At the moment that information is not freely available,” he said, suggesting further that Chinese financial experts should make the information available at such fora.

Fundanga said the coming in of the yuan would give the region more options for managing its reserves.

The use of the yuan also came in handy because China was giving loans to the region and other African countries.

“One of the issues we discussed though was that sometimes if you have borrowed from China they want to bill you in U.S. dollars. Now we are saying our government must start discussing with Chinese enterprises (and) government so that we’re billed in yuan and then we can pay in yuan. Because there is no point if we start keeping our reserves in yuan but we’re billed in dollars. It is no good,” he said.

He acknowledged, however, that some countries were already being billed in yuan for Chinese goods and services.

Fundanga said there was also discussion on possible currency swaps like what China had done with Nigeria, where Nigerians travelling to China could easily access the yuan from their local banks.

MEFMI argues that the bulk of reserves for most countries in the region are invested in U.S. dollars, yet their composition has not kept pace with the large shifts in the world economy. This is particularly so since China and India continue to shape global economic trends as they remain major trade partners for the region.

MEFMI countries comprise Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

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Top finance officials discuss possible use of Chinese
yuan as reserve currency for eastern, southern Africa

HARARE Zimbabwe (Xinhua) -- The Chinese yuan comes under the spotlight Tuesday and Wednesday when 17 top central bank and government officials from 14 countries in eastern and southern Africa meet in Harare to discuss its possible use as a reserve currency for the region.

In a statement to Xinhua on Monday, spokesperson for the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) Gladys Siwela-Jadagu said the event would be attended by deputy permanent secretaries and deputy central bank governors.

Officials from the African Development Bank and an investments management organization will also attend the forum bringing together the policy makers and experts in reserves management to strategize on the weakening external positions of most member countries, following the global economy slowdown, she said.

The theme for the forum is “Trends in Sovereign Reserve Management.”

“As at the end of 2017, official reserves for most countries in the MEFMI region stood barely at or below the traditional three months of import cover benchmark. Foreign currency denominated public debt continues to increase as well as interest payments, as most countries move to more commercial sources of borrowing to meet their increasing appetite for infrastructure projects,” she said.

She said the bulk of reserves for most countries in the region were invested in U.S. dollars, yet their composition had not kept pace with the large shifts in the world economy. This was particularly so since China and India continued to shape global economic trends as they remained major trade partners for the region.

“Most countries in the MEFMI region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan). This is the reason why it is critical for policy makers to strategize on progress that the continent has made to embrace the Chinese yuan which has become what may be termed ‘common currency’ in trade with Africa.

“Ascendancy of Chinese yuan in the Special Drawing Rights (SDR) basket of currencies is an important symbol of its importance and IMF’s approval as an official reserve currency.

“With China as the largest trading partner of over 130 countries, the main challenge for African countries is how to benefit from the new pattern of international commerce,” she added.

She warned that the continent could not afford to lag behind in taking advantage of growth-enhancing opportunities with China, as it had been clear over the last five years that trade and investment with the West continued to be limited.

The forum will also discuss risk perceptions and capital flows and financial products available for use by African countries.

MEFMI is a regional owned Institute with 14 member countries: Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

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China-Africa dialogue key to enter golden era of co-operation: scholars

NAIROBI (Xinhua) -- There is need for China and African partners to embark on a dialogue process that would lead to improved bilateral cooperation in the light of evolving geopolitical dynamics, said top scholars attending the 20th Wanshou Forum in Nairobi on Saturday. The event was held outside China for the first time.

Over 50 Chinese and Kenyan scholars attended the Wanshou Forum that brainstormed on building a China-Africa community of shared future through international cooperation in advancing the Belt and Road Initiative.

Li Xuhang, Minister Counselor at the Chinese Embassy in Kenya said that robust interactions and knowledge sharing will catapult Sino-Africa ties to a new era of mutual benefits.

“Both China and Africa have entered a new era with new opportunities and demands. China needs Africa more than ever and Africa needs China more than ever too,” said Li.

He added that China and African countries should forge strong ties in their pursuit of common goals like economic growth, social renewal and environmental protection.

Kenya became the first African country to host the 20th version of Wanshou Forum whose theme was opening a new era of China-Africa cooperation in the context of South-South cooperation.

Kenyan scholars hailed the hosting of the forum to discuss novel ways to revitalize Sino-Africa cooperation ahead of the Forum on China-Africa Cooperation (FOCAC) summit to be held in Beijing in September.

James Kombo, acting Vice Chancellor of Daystar University, said that African countries could draw lessons from China’s competitive edge in technology, innovations and economic resilience to tackle the continent’s endemic challenges.

The Belt and Road Initiative will help build our capacity, enhance training, transfer of knowledge and skills to boost economic development in Africa, Kombo remarked.

He noted that China’s image in Africa has rapidly improved thanks to huge investment flows into strategic areas like manufacturing and transport infrastructure.

Dong Weihua, Deputy Secretary-General of China Council for BRICS Think-Tank Cooperation said that robust exchanges among Chinese and African scholars is key to addressing threats facing both partners that include protectionism, communicable diseases, terrorism and environmental depletion.

She emphasized that both China and Africa share a common heritage and destiny hence the need to improve cooperation across economic, political, social and technological spheres.

“In the new era, all stakeholders in China and Africa, including think-tanks need to intensify exchange of experiences and mutual learning and jointly explore better ways to align development strategies and broaden development paths,” Dong remarked.

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Kenyan scholars say China a reliable partner in realizing “African dream”

NAIROBI (Xinhua) -- China’s foreign policy centered on a win-win partnership and respect for other country’s political structures will be key to hasten inclusive growth, peace and stability in Africa, Kenyan scholars said Saturday.

The scholars who spoke at the 20th Wanshou Forum held in Nairobi said China will continue to be an instrumental player in Africa’s quest to modernize its infrastructure, tackle poverty and expedite industrialization.

Peter Kagwanja, CEO of Nairobi-based think tank, Africa Policy Institute, said that African countries are looking up to China as a strategic partner to achieve their vision of a continent that is prosperous, connected and peaceful.

“The Chinese dream has found a convergence with the African agenda 2063 that envisions a peaceful and prosperous continent,” Kagwanja remarked.

Over 50 Kenyan and Chinese scholars attended the Wanshou Forum whose theme was opening a new era of China-Africa cooperation in the context of South-South cooperation.

The forum discussed diverse topics like building a China-Africa community of shared future through cooperation in advancing the Belt and Road Initiative.

“We need a civilizational dialogue with China to define the next phase of cooperation with the Asian giant. We should also deepen win-win partnership and pick lessons from China’s giant economic progress,” said Kagwanja.

He noted that China-funded Standard Gauge Railway (SGR) project has been transformative in terms of spurring Kenya’s regional economic development.

China has enjoyed goodwill in Africa thanks to robust investments in critical sectors like transport, manufacturing and information technology that are reshaping the continent’s growth.

Polycarp Ochillo, a senior lecturer at the University of Nairobi, said China has filled the void created by western powers to become Africa’s dependable partner in many spheres.

“What is emerging for now is that China will remain an indispensable partner as the African continent chart a new path that leads to sustainable growth,” Ochillo said.

Sam Kamau, a senior lecturer at Aga Khan University in Nairobi, said that Sino-Africa ties will withstand stereotypical narratives from the West to be upgraded to new levels.

“Moving forward, we expect China to remain an integral part of the African dream. Our interests converge and we should leverage on China’s strengths to promote our development,” Kamau said.

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China brings more development opportunities to African countries: expert

CONAKRY Guinea (Xinhua) -- Professor Pascal Boniface, founder and director of the French Institute for International and Strategic Affairs (IRIS), said China has brought more development opportunities to African countries.

“The presence of China has allowed African countries to have options they did not have before,” said Boniface in an interview with Xinhua Thursday in Guinean capital Conakry.

China is “becoming a major actor in Africa,” he said, adding that there was a kind of monopoly by Western countries in Africa and the monopoly was broken by the presence of China, Brazil and Japan.

Boniface said China’s investments in Africa involve many positive aspects, including the construction of infrastructure, stadiums, and so on.

China’s Belt and Road Initiative also offers Africa a bright prospect, he added.

Boniface highlighted China’s important role in BRICS (the group of five emerging countries—Brazil, Russia, India, China and South Africa) as well as in other international organizations.

African countries are carrying out cooperation with China while maintaining cooperation with other Western and emerging countries such as Brazil, he added.

“African countries need to have several partners,” said Boniface.

           

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