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Commit to development

Due to the impact it will have on the national economy and the jobs it will create, the deep water port of Lekki in Lagos has been called a pioneer by Lai Mohammed, Nigeria’s Minister of Information and of Culture, during a recent visit.

According to estimates revealed by the minister, the port of Lekki, which will be the deepest seaport in West Africa, “will create around 170,000 jobs and bring in revenues totaling $201 billion” for local and central authorities. of the country, through taxes, fees and charges.

The port, which should come into service later this year, covers 90 hectares and will be under concession for 45 years. This is a major project under the “build, own, operate and transfer” model, contracted with the Chinese company China Harbour.

The project is a key part of the Belt and Road (BRI) initiative, a vast infrastructure network of land, maritime, air and cyber connectivity, between and within countries around the world, which was launched in 2013.

The Lekki port project is one of many Chinese investments that are not only creating jobs but also transforming the socio-economic landscape in Africa.

The work force

According to a report published by the consulting firm McKinsey, the more than 10,000 Chinese companies operating in Africa employ several million Africans.

The reason why Chinese investment in Africa stimulates job creation is obvious. While China has become important in the global manufacturing sector thanks to a large and inexpensive labor force, Africa now has this advantage. As a result, Chinese companies are taking advantage of this advantage to increase investment in the mainland. This translates into an unprecedented increase in job creation across Africa.

Since 2000, when China encouraged its companies to internationalize, Chinese direct investment has grown by more than 25% per year, entering a phase of “rapid and gradual development”.

The establishment of the Forum on China-Africa Cooperation in 2000 not only guided collaboration in the fields of economy, trade and investment, but also established mechanisms to give it impetus. The initiatives taken, in their respective contexts, have played a pivotal role in advancing and fostering the massive inflow of investment from China.

Mechanisms aimed at strengthening cooperation have greatly facilitated the entry of African products into Chinese markets, which has led to the creation of a large number of jobs in Africa.

The BRI has created an enabling environment for the massive construction of infrastructure financed or supported by China in the key sectors of roads, railways, industrial parks and power generation, in order to make a trade, manufacturing and investment hub.

The increasing quality of cooperation between Africa and China has marked a transformation in economic relations in trade and investment. From a relationship dominated by trade in commodities and contractual projects, the collaboration is now focused on investing in multiple sectors and developing multidimensional capabilities. This has greatly accelerated the industrialization of Africa and promotes its ability to develop independently.

Chinese FDI in Africa

China’s direct investment in Africa reached $47.4 billion in 2020, the fourth largest amount of investment in Africa. It goes without saying that the COVID-19 pandemic has dealt a severe blow to foreign investment in the continent. Indications from the United Nations Conference on Trade and Development show that the inflow of foreign investment into Africa fell by 15.6% in 2020. However, this trend has been tempered by the boldness of Chinese companies to explore investment opportunities, even in the context of the health crisis that was gripping the world at the time. Data from China’s Ministry of Commerce showed that China’s direct investment in Africa reached $2.59 billion in the first nine months of 2021, up 9.9 percent year on year.

The evolution of Chinese investment in Africa shows a healthy diversification into different sectors, enhancing not only job opportunities but also steady skills development and capacity building. The risk of the so-called demographic time bomb due to youth unemployment is gradually fading as Chinese investment in the continent absorbs the emerging labor force, especially the youth, providing them not only with livelihood, but also expertise to thrive, sometimes even on their own.

Despite a mutually beneficial Sino-African economic cooperation and investment environment, institutional difficulties and infrastructure and energy gaps remain challenges in Africa. While the continent claims to be the next “workshop of the world”, Africa must give itself the means to match its ambitions.

China, in addition to its contributions to the continent’s renaissance, is a powerful example and source of inspiration for Africa. By its example, the region tries to overcome difficulties and seeks to realize its potential for development and quality of life for its people.

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