Surveys suggest little worry among Africa’s business leaders about Chinese competition
Posted by stb0327 on March 4, 2007
Despite all of the rhetoric coming out of Western media outlets about the ‘colonialist’ aspirations of Chinese investments in Africa, recent surveys suggests business leaders in Kenya, Uganda and Tanzania do not feel threatened by Chinese business coming into their countries. Of course, these countries are not overflowing with oil where China’s interests in Africa are receiving the most political attention, but the article suggests business people in sectors like agriculture and tourism see the Chinese presence as a chance to mold solid partnerships with the Asian nation that will mutually benefit both countries overall.
Another recent article found online states:(http://www.greenleft.org.au/2007/701/36384)
According to the most recent UN figures, toyal FDI holdings in Africa in 2005 were worth $96 billion, of which European firms accounted for 61%, US firms 20%, Asian firms 8% and South African firms 2%. Of the $29 billion of FDI that went into Africa in 2005, only $1.2 billion (4.1%) came from China.
Flows of Chinese capital into China will always seem threatening to those foreign policy-makers still tossing and turning at night remembering the Cold War and the ongoing fight for influence throughout the world. For the new generation of African business people that are active and thinking on their feet, these capital flows that aren’t necessarily going only into natural resources or that might now have a better chance of trickling down with more sound governance, Chinese dollars are valued the same as U.S. dollars. And as the above UN figures show, these Chinese dollars are still miniscule in comparison with U.S. and European capital stocks and flows.
Kenya and Uganda businesspersons say their businesses are least likely to be affected by Chinese presence in Africa and have therefore embraced them in some of their businesses.
According to Tanzania Business Leaders Confidence Index surveys done by Steadman Group and presented by its Managing Director George Waititu yesterday, 20 per cent of businesspersons in the two East African countries showed that Chinese ventures in Africa were of little or no effect on their businesses.
It said only a third of the businesspeople interviewed said China`s strategy would have a negative impact on their ventures.
In Kenya, telecommunications, ICT and services sectors were the most apprehensive about China, while agriculture, hotels and tourism sectors expected to reap the most from partnerships with the oriental country.
Zambian business leaders, on the other hand, were found to be the most apprehensive about China, according to Waititu.
This situation was attributed to the fact that the main opposition candidate in the last election was seeking electoral support partly on the basis of reducing Chinese economic activities in the central African country, said Waititu.
The surveys were conducted in five African countries of Tanzania, Kenya, Uganda, Zambia and Ghana in Dec 2005, May 2006 and December 2006.
On the controversial issue of corruption, he said four out of every ten interviewed Tanzania and Zambia business persons said corruption did not have any effect at all on their businesses.
On the other hand about 30 per cent Kenyans, 26 per cent Ghanaians and 37 per cent Ugandans said corruption in their countries greatly affected their businesses.
Waititu said Kenya led in terms of business leaders confidence during the three surveys conducted by the group, while Uganda recorded the lowest.
`Amongst the five countries surveyed, Kenya recorded the highest, while Uganda recorded the lowest?even though its performance was the best since before December 2005,` he said.
Tanzania`s business leaders` confidence has on the other hand been on a steady downward trend from 66 points to 59 within the past year, Waititu said.
He attributed the reasons partly to the power crisis experienced last year and the GDP and inflation.
He said Zambia, with the general elections out of the way recorded an increase in business confidence of 9 points, adding that the average index for the five countries was 64.
He added that only Tanzania and Uganda experienced performances that were below the average.
All nevertheless recorded growth rates ranging between 59 per cent and 69, he said.
Speaking on profit expectations, he said although Uganda recorded one of the highest changes in business confidence, optimism on profit was not as high as it is in the other countries.
He said business leaders were least optimistic about profits because of the increase in overhead costs, attributing this primarily to power crisis.
The other issue which the surveys undertook was the effects of climatic change in relation to business.
According to Waititu, the business leaders expressed considerable concern about the negative global climatic changes and the likely impact on their businesses.
The highest level of concern came from leaders in the agricultural sector, while those in telecommunications, ICT and services sectors expressed slightly lower levels of concern.
Concluding, he said the highest degree of concern was shown in Uganda, whose economy is largely agricultural and the lowest was in Tanzania.
Steadman is the largest information surveying group in sub Saharan Africa, also with offices in South Africa.
- SOURCE: Nipashe
