Africa calling China, eyes more investment to boost post-pandemic recovery

Africa calling China, eyes more investment to boost post-pandemic recovery

A survey carried out by CMS survey shows that majority of African executives will welcome more new Chinese projects

A large majority of senior executives in Sub-Saharan Africa are more open to investment from China under the Belt and Road Initiative (BRI). They believe that it would herald new opportunities and help post-pandemic economic growth in their respective countries.

According to a survey carried out by the international law firm CMS that specialises in international law and tax, 72 per cent of respondents were open to new BRI projects.

'The Belt and Road: The View From Africa' report found that 62 per cent of respondents aimed to maintain or increase their involvement in the Chinese investment programs.

About 46 per cent also said they plan to focus their efforts on targeting renewable energy or hydro projects in the future. This is three times higher than 16 per cent of those that have done so in the past, while 86 per cent expect the pandemic to boost 'Health Silk Road' projects.

"Over the years, we have seen continued commitment from China to invest and develop trading relationships across the region. While there is some debate about the long-term future of BRI, the post-pandemic recovery in China bodes well for future investments in participating nations and is perceived with enthusiasm in Africa," Hugo Coetzee, a partner and head of CMS's Africa practice, said.

According to Coetzee, China's pivot towards a greener and more sustainable projects could have a greater impact on the continent, as well as an increasing emphasis on digital and health-related BRI investments.

Interestingly, enthusiasm for and satisfaction with BRI investment was still stronger in Africa compared to anywhere else outside of China, the enthusiasm has dampened over the past year. Several countries, especially in the Western bloc, view the BRI with scepticism. The cascading impact of the Chinese investment has resulted in popular sentiment towards BRI declining by 12 per cent, from 64 per cent to 54 per cent over the past 12 months. CMS notes that the 12 per cent decline was milder compared to what has been seen in other regions.

Half of the respondents also said their BRI involvement had turned out to be more challenging than they had expected, while 61 per cent termed legal and regulatory risk as a key concern with BRI projects.

As BRI moves into its second phase (BRI 2.0), 81 per cent of respondents believe road-building projects present the most opportunities. Renewable and hydro energy networks with 55 per cent occupied the second preference while power grids with 53 per cent and logistics-related projects at 49 per cent emerged as the other two preferred choices of the African executives.