africa

Africa at a Fork in the Road: Taking Off or Disappointment Once Again?
The construction industry in Africa is a significant arena for Chinese business.
Chinese companies with engineering and construction contracts in Africa reported
US$40.8 billion in turnover (revenues) in 2012, and US$64.05 billion in the value
of new contracts signed that year. These figures have increased substantially over
the past decade: in 2003, Chinese firms reported turnover of only US$2.3 billion.
Much of this work will be financed by non-Chinese sources, including the World
Bank, African Development Bank, bilateral agencies, and African governments and
private sectors.
In May 2014, Chinese officials announced that Africa now receives more than half of
China’s official development assistance (ODA). ODA comprises projects funded by
grants, zero-interest loans, and low-interest (concessional) foreign aid loans. China’s
Ministry of Commerce oversees the foreign aid program and manages the projects
funded by grants and zero-interest loans. Between January 2011 and December
2012, 83 foreign aid projects financed by the grant and zero-interest loan program
were completed in Africa, including 16 hospitals, several malaria treatment centers,
schools, and agricultural technology demonstration centers. China’s Export-Import
Bank provides appraisals and finance for projects funded by concessional aid loans.
China does not report much about its finance or its official development aid. China’s
budget for foreign assistance expenditures includes the face value of grants and
zero-interest loans, and the value of the interest-rate subsidy on concessional foreign
aid loans, but not the face value. The latest published figures (2012) record an
annual global disbursement by China of RMB16.7 billion (US$2.65 billion) out of a
budget of RMB19.2 billion (US$3.04 billion). 2 About half of this amount, or US$1.3
billion, is a good approximation of the actual government funds disbursed in foreign
aid for Africa in 2012. 3 These figures do not include the face value of concessional
foreign aid loans, which are banking transactions for which no budget allocations
are made. The latest public announcement of total ODA was in April 2013, when
an official stated that China’s global foreign aid (presumably for 2012) totaled 40
billion yuan (US$6.35 billion). 4 If Africa received around half of that (the current
norm), then the amount of ODA disbursed to Africa was approximately US$3.18
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