Chinese Investment in Africa

Chinese Investment in Africa

China’s foreign direct investment in African countries has grown exponentially over the past decades since its entry in the African markets. The cash flows to the continent include aids for trade, foreign direct investments, and loans. The most significant percentage of China's investment in developing countries is loans. China funds most of Africa’s infrastructural projects such as roads, dams and railway lines in an attempt to develop the nations. However, Chinese investments in Africa also pose a threat to the wellbeing of the countries. China's loans are tied to market volatile interests as well as the requirement of natural resources as securities and payments for the loans. Moreover, the dominance of the Chinese firms in the projects is similar to neo-colonialism. Therefore, the financial relationship between China and African countries offers opportunities and threats both to the nation and the world’s economy. This paper is an analysis of Chinese investment in Africa showing opportunities and threats of this investment to African countries, China and the world economy as well as the advantage of Qatari firms.

The Chinese investment in African countries has been in the upswing since 2009. The stakes are diversified over various industries in the developing nations with the aim of funding development projects to spur economic growth in the continent. The Chinese offer investment funds in packages of loans and foreign aid. The African countries, in turn, apply for the funds and the World Bank confirms their ability to service the loans before china grants loans to the nation. Moreover, the World Bank investigates the loan contract agreement s to ensure that they are not exploitative before allowing the African countries to commit themselves into the relationship. The investment project by China has helped several African nations achieve growth goals. For instance, China funded the construction of Kenya's Thika highway and is financing the construction of a standard gauge railway between Kenya’s largest cities Nairobi and Mombasa. Moreover, China is also backing the construction of two major standard gauge railways in Nigeria from Lagos to Kano and Lagos to Calabar. Other African nations with significant Chinese investments include Ethiopia, South Africa, and Angola. These countries have seen numerous opportunities due to the Chinese investment in the nations.

Chinese investment in Africa has led to the establishment of many infrastructural developments that are key in the economic development of the region. The loans from China fund projects such as roads, railways and agricultural establishments. The Nigerian government is constructing a standard gauge railway from Lagos to Kano and Calabar. The railway will be essential in the peacekeeping missions in the region. Since the area has numerous oil resources, the railway project will boost economic growth in the nation. Similarly, the standard gauge railway in Kenya connecting Mombasa with Nairobi up to Uganda is a boost for economic growth through the more comfortable transportation of goods to and from the port of Mombasa. Moreover, the construction of a superhighway in Kenya between the capital city and the industrial city of Thika was a significant establishment which has increased the industrial growth in the nation. Therefore, the Chinese investment opened up more opportunities for these nations through the construction of projects.

Furthermore, China funds several agricultural projects among African nations. Agriculture is the primary sector in most African countries. Therefore, Ch

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