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FOCAC 2018: Nigeria is Africa’s fourth largest destination for Chinese FDI

September 4, 2018

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A recent analysis by Today’s Echo from a report by international media outlet, CNN indicates that Nigeria is Africa’s fourth largest destination for Chinese Foreign Direct Investment(FDI).

Chinese involvement in African economies has grown over the couple of years as the Chinese economy itself continues to grow.

In the aftermath of the 2018 Forum on China-Africa Conference, the CNN reported that China is giving $60 billion in aid to Africa, the same amount that was given in 2015. Chinese investment in 2015 has been analysed and broken down according to countries in Africa.

According to CNN, South Africa has the highest Chinese FDI at $4.72 billion while Congo DRC is second at $3.24 billion. Algeria is third at $2.53 billion while Nigeria comes third at $2.38 billion.

China has now passed France, India and the United States as Africa’s largest trading partner. But total trade between China and Africa slowed from $220 billion in 2014 to $170 billion in 2017, according to the Chinese Ministry of Commerce, prompting concerns that relations might be cooling.

Janet Eom, a researcher at CARI, says this decline is mostly due to falling commodity prices. Given China’s recent trade war with the United States, Eom said that Beijing’s commercial relationships with African nations are likely to become “much more important.”

In July, Xi visited Senegal, Mauritius Rwanda, and South Africa — an itinerary that almost took him to the four corners of Sub-Saharan Africa — showing that China still prioritizes diplomatic trips to the continent.

Private business delegations have arrived “in droves” at this year’s FOCAC, said Stevens, and are pushing China to narrow their country’s trade deficits with Beijing. “Chinese exporters are finding very fertile soil in Africa,” he said. “But when increased domestic demand is met by Chinese imports rather than increased capacity at home, it’s not palatable from an African perspective.”

Chinese companies will also be expected to invest $10 billion in Africa in the next three years, according to Monday’s announcement.

Dede Ifayemi

Dede is an accomplished literary critic and public commentator with a penchant for telling compelling stories. An avid Man City fan, he lives in Lagos.