What will China gain from the growing cooperation with Africa?

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The discussions in the recent past have been inclined on how Africa is set to fall in the “debt trap” which many people think is what China wants. Well this is not the case because it’s not 100% about Africa gaining from China. It goes without saying that, when two parties enter into an agreement of any sort, and then there are mutual benefits in that agreement. This happens to be exactly the same thing happening in the China-Africa cooperation. CAMAL has been attending the forums which are aimed at bringing a better continent with the Asian country.

Many people have continued to see the impact China is having in Africa in terms of development and poverty alleviation in Africa. Africa has been able to influence policy formulation in China thanks to the relations. If you want to fight any negative idea in a country you have to deal with the source of that problem first.  A good example of this is the when Africa became united and said it’s illegal to do ivory trading, China adhered to that and being one of the biggest market of ivory from Africa, then the elephants and rhinos are now safer than before.

China has been speculated to be colonizing Africa slowly by coming up with attractive monetary deals which will entice African leaders to allow China to invest in their countries. Mainly, China is pushing for the cooperation with Africa, for the following reasons,

  • Political connection with Africa. China knows that Africa represents over 50 votes in the United Nations and other international organizations.
  • China’s quest for new Markets. As the domestic market become saturated while more and more Chinese are going global, Africa represents a new market for the products produced.
  • As the Chinese economy continues to grow, there are certain products that Africa can provide depending on the demand from China. A good example is the Minerals from Africa. More Chinese are coming to buy Manganese and Marble from Africa and CAMAL has continued to connect the suppliers in Africa to the buyers in China. More and more suppliers are now trusting CAMAL to do the negotiations with china and bringing them buyers from China.

For those who are for the idea that China is out to colonize Africa, there is need to understand that the companies in China operate like any other Company in the world. The end product should bring profit to the company. This is the reasons why, companies in China are working closely with CAMAL to help them cut on cost by getting their raw material from Africa in order to ensure that the locals in Africa where the minerals are being mined benefit in one way or the other. If these relations were not for a good reason, then the number of countries in FOCAC would be less. From the previous engagements, only one country is not in the China-Africa cooperation.

China is set to adopt innovative technology which comes from Africa. A good example is the M-PESA innovation from Kenya. This technology has continued to wow other countries across the world, china being one of them. To support more of these innovations, China has established innovation centers in different parts of Africa where Chinese are offering different projects to the locals to see to it that they embrace the available technology from China.  This has mainly been happening in the Agricultural sector.

China has also benefited from Africa in terms of techniques of environment conservation. Due to industrialization in China, there has been an increase in the pollution levels making the cities in China a health threat. However china has visited some of the African countries such as South Africa which is one of the most industrialized countries in the continent and learns how they manage pollution in the country.

Generally we can say that both parties are gaining from the relations and if this continues in the future, China and Africa should have more benefits for each other. CAMAL continues to push for more exports from Africa to China; the firm believes that china should build more capacity in Africa to facilitate the standard they require because the resources are there. The procurement by China from Africa should not necessarily revolve on raw materials but also finished products. The best thing about the cooperation China is having with Africa is that it has brought competition among the super powers.  More European countries are now investing heavily in Africa to match what China is doing and this means more development for Africa.

You can watch the interview CAMAL’s Managing Director Mr Walter Ruigu had with CGTN about this topic

 

CAMAL’s Managing Director reviews the achievements of FOCAC2015

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China- Africa cooperation has been going on for some time now. CAMAL’s Managing Director Mr. Walter Ruigu was spent some time to review the progress of FOCAC2015 which was held in South Africa. The theme was how to facilitate the movement or transfer of the industrial knowledge from China to Africa.

  1. From the macroeconomic perspective, the conference was successful because China stepped up the pledges from $20 billion to $60 billion which will be in different forms, they will increase financial funding to develop the SMEs
  2. China will offer more training support to African Students who will learn more about technology.
  3. From a company level FOCAC2015 could have done more as the attendance was mainly done by the Government state owned companies instead of firms from Africa. Africa should have more of these forums so that we can they can be a step in the same direction with China.
  4. China’s economy has been slowing down in that China has moved from economy that was based on investment and to fixed asset to domestic consumption. This means that Africa being a large trader in Commodity trading, the continent has been suffering from the economic fluctuation of the prices of these commodities.
  5. The Chinese manufacturing sector has been operating in over capacity i.e. the steel industry; this means there is need to move some of these industries in Africa. However, there is a lot of information which would help the industries in China to move to Africa. Many small medium enterprises are closing down because they do not know how to move to Africa because they do not have the regulations of the country they would want to move to.
  6. The companies in Africa need to engage with China at a macroeconomic level for them to benefit. Once the African companies engage with the big companies in China, definitely the issues of infrastructure will be addressed. China is able to integrate many companies to come up with one common industry.
  7. The market in china cannot be gauged by looking at the population, this is because of the difference in the consumption pattern and the marketing plans. African countries have to research more on Chinese market. Africa should focus on value addition so that export can be increase to China.

Comparing this with FOCAC2018, there has been an improvement as many companies came on board and attended the forum. Unlike in 2015, more countries are sending companies in china to carryout market research, procurement purposes and to get investors. CAMAL continues to be on the forefront to see that clients from African Continent get the best from china. CAMAL also continues to link more industries from China to the African market making it easy for entrepreneurs to source from China. The theme of these forums has been to see to it that Africa has achieved economic growth through these relations in the long-run.

Attached is a file with an audio where CAMAL’s Managing Director Mr. Walter sheds more light on what Africa needs to do for a smooth cooperation with China.

 

CAMAL makes its entry into Ethiopian market

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CAMAL’s MD, Walter Ruigu interviewed by Ethiopian Broadcasting Corporation on opportunities for Ethiopian companies in/with China

 

CAMAL saw a lot of opportunity in Ethiopia especially from the industrialisation drive from government.

China Trade Week Vice President Sean Xiao and CAMAL MD and Sales Manager at CAMAL’s booth. CAMAL sees Ethiopia as a key regional market

CAMAL looks forward to working in Ethiopia.

For any inquiries, please email: info@camaltd.com

CAMAL’s MD Walter Ruigu appeared CGTN to discuss China-Africa Cooperation

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CAMAL’s Managing Director Mr Walter Ruigu (left) during an interview with CGTN

China has continued to make strides in investment and this time, they have their eyes set on Africa. It seems Africa has some potential which has caught the attention of this economic giant . China continues to invest in various sectors in Africa. With globalization and technology advancement, investment has been taken a notch higher with China eyeing  African market for its produce. There has been a rise in business trips from Africa to China as more states want to understand China’s technology in production and how they can adapt the same technology back in Africa.

CAMAL’s Managing Director Mr Walter Ruigu appeared on CGTN to shed some light on why China has decided to venture in Africa. It is true Africa has resources which has everyone thinking it’s the main reason why China has been on the forefront pushing to invest more in Africa. China just like other countries in the world is on a market search for its output. The domestic market in china is saturated. African countries are potential markets for China’s various commodities. For example, construction companies in Africa are highly dependent on China for the Procurement of machinery and other construction materials. We also have firms getting raw materials from China to facilitate production which will later contribute to the increase of GDP after the end product is traded.

CAMAL’s Management Team in China (from left) Managing Director Mr Walter Ruigu, Senior Project Manager Mr David Kyalo and Head Of Operations  Mr Razack Magagi

China has 3 main interests in Africa.

1.) The first one is to  support  the international community. China can and has continued to offer technological support to multilateral agencies to help them make countries better. A good example is the United Nations Environment Programme. China  has advanced technology on how countries should conserve the environment and recycle the waste products to create continuous utility. Being one of the most populated countries in the world, China has tried to come up with various ways of conserving the environment. The technology used has been passed to other countries across the world. CAMAL continues to contribute positively by arranging successful trips to China where clients get to visit and acquire necessary knowledge which they later transfer to their countries .

2.)  Quest for new markets is also another interest.  These markets are created by the ever growing demands which need to be fulfilled. At this point, firms like CAMAL have come in handy to help consumers and organisations understand China market more. Many African consumers are using CAMAL to procure from China. CAMAL can put it on record that those companies, individuals and organisation who have procured equipment, machinery or any construction materials from china, have been able to boost their productivity/output and increased profitability in the long-run.

Africa’s Heads of State during the FOCAC2018 in Beijing China

3.) it’s true that Africa has resources which China needs. This should be considered as strength and not a weakness. Countries like South Africa have greatly benefited because China has invested so much in their economy thanks to the resources they have. Many countries in Africa have untapped potential because they have not found the market internationally for what they produce  yet China can be a target market. Again CAMAL has come in to boost African countries Trade with China by helping organisations export the raw material China needs. Firms in Africa who are doing trade with China continue to benefit from these relations.

CAMAL’S MD Walter Ruigu(left) and Project Manager David Kyalo during FOCAC2018 in Beijing

CAMAL would recommend all African countries to focus  more on producing final products from the resources they have. This will add value and contribute towards financial independence. The final products will also get demand from other international markets not only China. it should challenge all African countries to strive towards economic growth which will bring financial independence to the continent.

You can watch the full interview as CAMAL’s Managing Director Mr Walter Ruigu brings more understanding on Why China is investing more in Africa and how African firms can benefit  by clicking here