China becomes single largest contributor of Africa's FDI: Report

CAPE TOWN - Chinese investment in Africa has increased dramatically, making the country the single largest contributor of foreign direct investment (FDI) capital and jobs in Africa in 2016, according to Ernst & Young's (EY) latest Africa Attractiveness report released on Wednesday.

Since 2005, China has invested in 293 FDI projects in Africa, totalling an investment outlay of $66.4 billion and creating 130,750 jobs, according to the report.

Chinese FDI into Africa is well diversified across sectors, covering resource-oriented ones as well as services and manufacturing, the report said.

The data released by EY, a London-headquartered professional services firm, also reveals diversification of Chinese investment across more countries, covering both resource-rich nations, such as South Africa, Nigeria and Angola, and agricultural exporters such as Kenya.

In 2016, jobs created from Chinese FDI projects hit an all-time high, more than double the number in 2015 and more than three times the number of jobs created by the next biggest investor, the United States, said the report.

"This highlights the job-creating impact of Chinese FDI on Africa," the report notes.

Besides trade and FDI, Chinese companies and state-related entities have financed and built many infrastructure projects across the continent, including ports, roads, railways, dams, telecom networks, power stations and airports, the report said.

One notable example is the launch of a Chinese-built railway linking Addis Ababa in Ethiopia to the port of Djibouti on October 2016, involving an investment of $4 billion.

The report also said the China-proposed Belt and Road initiative to rebuild the ancient Silk Road trading route could prove to be a win-win situation for both China and Africa.

The report noted that since the late 1990s, Sino-African trade has grown rapidly, with China now Africa's largest trade partner.

In 2016, China's exports to Africa stood at $82.9 billion while imports from the continent were valued at $54.3 billion, according to the report.