China’s annual New Year African safari

In the usual start to its New Year diplomatic calendar, Chinese foreign minister, Yang Jeichi, has embarked on a four nation African tour. Landing in Rwanda, as the first stop of his visit, the foreign minister was invited to which supports projects for disadvantaged communities. Apart from this China also has funded other projects across Rwanda totaling US7.8 million just in 2008 alone.

The visit by the foreign minister is significant because in the latter half of 2009 the 4th Forum for China-Africa Cooperation (FOCAC) Summit will be hosted in Cairo. Part of the visit is to assess progress made on the eight measures announced by President Hu Jintao at the 2006 FOCAC Summit, notwithstanding the urgency to expedite those projects that are still to be initiated. This was emphasized by the Foreign Minister in an interview with Chinese television CCTV ‘Next year [2009] will be crucial as its will be the last year for the implementation of these eight measures. We will make utmost efforts to ensure the success of these’.

Seen from this context, the visits to Uganda, Malawi and South Africa will also combine viewing existing Chinese projects with the possibility of assessing prospects for future investments and projects. But it should also be borne in mind that amidst the financial crisis the visit by the foreign minister could be interpreted as setting a more tempered tone for the upcoming Summit, especially in terms of African expectations. With reports looming about the possible exodus of some Chinese mining firms from African markets like Zambia and DRC, it would be interesting to see what commitments the foreign minister makes to the countries he visits. Although it must be added that this does not seem to have put a damper on China’s willingness to extend development assistance and infrastructure projects to Kenya and Mauritania.

In Kenya, President Kibaki applauded China’s investment to to expand the port at Nouakchott. Termed the ‘Port of Friendship’ the Chinese are going to fork out US$280 million to extend the deep water port by 900 metres. For Mauritania this investment comes at a time when other development partners have either scaled down or halted development assistance or investments following the political coup by General Mohamed Ould Abdel Aziz, while the AU is working towards sanctioning the military rulers. China, however, has retained its relationship with the West African country. Some may argue that China is positioning itself in Mauritainia’s energy market. In 2006 CNPC began drilling for oil ‘after paying more than US$8 million for a 65% of an onshore and gas block’. And with Mauritania producing almost 75 000 barrels of oil daily and proven crude reserves of one billion barrels, China remains the country’s erstwhile investor with nearly US$700 million worth of projects that includes water supplies, telecommunications, agriculture and construction.

The Sudanese Issue not to be overshadowed….

It is worth mentioning that while FOCAC will be the mainstay of the Foreign Minister’s discussions, the Sudanese issue will be one of the focal topics for consideration. Early in the week, China’s special envoy for African Affairs, Ambassador Liu Guijin, called on that may undermine the 2011 referendum.

Talking of celebrations…

This year will also see Djibouti and China celebrating 30 years of diplomatic ties .

The India Factor

While China forges ahead with its 2009 African agenda, it seems that India is also quietly devising plans of its own for its African engagement.

Between 22-24 March the Confederation of Indian Industries (CII) will host the 2009 Conclave Meeting of the India-Africa Project Partnership in New Delhi. The conclave meeting provides an important platform for African and Indian investment deals as well as project collaboration. It is also a significant showcase for strengthening Indo-African commercial ties.

With this on the horizon, India has already begun to attract interest from Kenya. Recently Prime Minister Raila Odinga attended a Global Investment Summit in Gujarat where the Prime Minister met with business investors who wanted to learn more about Kenya’s policy on Public and Private Partnership . Using the network to strengthen ties with the West African country is also a way for India to leverage its footprint in West Africa where it has been trying to consolidate its presence.

But Indian companies have also become aware that non-delivery on projects could undermine the Indian government’s West African policy. Such is the state of affairs with regard to the ONGC-Mittal energy project in Nigeria. Nigeria has cautioned the joint venture company OMEL to fulfill its infrastructure commitments as part of the US$6 billion deal to explore for oil and gas inked in 2005.

Delivery on the infrastructure projects is critical if India is to secure its energy projects outside the Middle East. Moreover Indian companies need to understand the fluidity of the African market and that there are investors in the wings willing to step in and take over such projects with the necessary resources.