Entrepreneurs in the private sector constitute an important
motive force for development and economic growth.
A key issue, therefore, is determining how engagement between
Africa and Asia can create new avenues for entrepreneurship
development and also increasing roles for the indigenous private
sector in Africa's development and output growth.
Africa has many medium and large firms, especially financially
autonomous state-owned corporations and those that have been
successfully privatized in the last two decades.
However, the African business ecosystem is dominated by micro,
small, and medium-sized enterprises (SMEs) and the preponderance of
informal transactions.
There are four main challenges, however.
The first is to transform and rapidly upgrade the technological
base, productivity and international competitiveness of Africa's
enterprises.
The second is to identify niches where Africa's SMEs have or can
acquire and retain competitive advantage in a globally integrated
economy.
The third is to facilitate the integration of African SMEs into
global value chains and their penetration of lucrative, but highly
competitive and demanding, external markets.
The fourth is to assure access to financing on affordable and
reliable terms.
There is considerable potential for a win-win partnership
between African entrepreneurs and their Asian counterparts.
The reality is that, today, through their internal optimization
of value chain processes and the accompanying allocation of capital
investments in production sourcing and distribution channels, large
transnational (or multinational) corporations play a determinant
role in international trade.
There is a great role to be played by Asia's transnational
corporations in deepening cooperation between Africa and Asia by
fostering the modernization of African SMEs and their integration
into global trade.
China's investment
Chinese firms are encouraged to invest in Africa.
A package of economic and trade cooperation measures introduced
by China presents the country's private firms with unprecedented
opportunities to invest in Africa.
Chinese President Hu Jintao announced at the two-day Beijing
Summit of the Forum on China-Africa Cooperation in November 2006
that China will double aid and provide US$5 billion in preferential
loans and buyers' credit to Africa, in addition to establishing a
China-Africa development fund.
"The new steps will certainly encourage Chinese private firms
with capacity to invest in Africa," said Zhao Jinping,
vice-director of the foreign economy department under the State
Council Development and Research Center.
Suo Zhanrong, president of the Huifeng Group in North China's
Inner Mongolia Autonomous Region, said governmental support has
injected new energy into private firms and expressed his confidence
about the prospects of Chinese medicines in the African market, as
his group plans to increase Chinese medicine exports to the
continent.
Sheng Jushan, general manager of the Guoji Group in Central
China's Henan Province, said his company recently set up an
economic cooperation zone in Sierra Leone, which has attracted
about 20 small and medium-sized Chinese enterprises.
China's Huawei Company, whose sales volume in sub-Saharan
African countries exceeded US$1 billion, has become the largest
CDMA product provider in the region, paying taxes worth US$40
million to African countries.
The Chunnan Group in eastern Jiangsu Province exports about
100,000 air-conditioners, washing machines and electric bikes to
Africa annually.
Wang Jianping, president of Hashan Company in eastern Zhejiang
Province, said his firm has decided to increase investment in
Nigeria from US$2 million to US$6 million, in order to boost the
development of the local shoemaking industry.
According to Import and Export Bank of China figures, of the 800
Chinese enterprises that have invested in Africa, only about 100
are State-owned enterprises, the rest being privately owned
firms.
The Chinese Ministry of Commerce, National Development and
Reform Commission, Ministry of Finance and National Development
Bank, are working on new policies and detailed measures to
facilitate China's investment in Africa, according to sources.
Chinese private companies will play a larger role in expanding
investment in Africa, said Wang Licheng, vice-president of the
Chamber of Commerce on Sino-African Trade.
(AfDB, Xinhua News Agency May 15, 2007)
