FOCAC, the Forum Of China-Africa Cooperation, is creating the platform for more opportunities that lead Africa to industrialization and modernization with increasing Chinese investment.
In December 2015, at the FOCAC summit, Xi Jinping, President of the Peoples Republic of China, announced that China will invest over $60billion in Africa over the next 3 years. By the middle of 2016, about 243 cooperation agreements had been signed between Chinese government, institutions and African countries. The agreements worth US$50.725 billion, include US$46 billion of Chinese direct investment in, and commercial loans to, Africa, accounting for 91% of the total value of the agreements.
FOCAC is about exchange of knowledge between the two continents, learning from each other and sharing ideas from other cultures. It is a strong partnership, which has developed of over a long period of time. In many areas, the partnership has delivered some concrete outcomes that are beneficial to Africa.
A specific example of this was sending 30 batches of experts armed with agricultural technologies and groups of professional teachers to African countries. This was to plan the agricultural development jointly with Africa, carry out academic exchange, provide technical and teaching guidance, as well as train more local talents in agriculture, supporting Africa in terms of strengthening the construction of agricultural development capability.
The Chinese State Councillor, Yang Jiechi stated “We Chinese often say that planning contributes 10 percent to the success of an undertaking, while 90 percent of the success lies in implementation. In this first year after the Johannesburg Summit, it is our shared expectation to see the early implementation of its outcomes so as to deliver more benefits to the Chinese and African people.”
An obvious short term benefit of Chinese investment, in addition to the knowledge exchange, is job creation for Africans, assuming Chinese companies are committed to hiring locals, which it seems they are. In a survey of 400 Chinese companies operating in over 40 African countries, while management and senior technical positions tended to remain Chinese, more than 80 percent of workers were local. Some companies had localized as much as 99 percent of their workforces.
Research in Ethiopia found that nearly 4,800 Ethiopians were employed by the Chinese firm that built Ethiopia’s urban light rail project. Another 4,000 Ethiopians worked at Huajian, a Chinese shoe factory close to the capital of Addis Ababa. In both cases, some local workers were even sent to China for management training. These practices make economic sense for Chinese companies. There have been tensions around many Chinese worksites in Africa, but they tend to stem from disputes about salaries and work conditions — not whether jobs exist for locals.
Picture -By World Economic Forum [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)]
Chinese businesses have historically struggled with numerous factors when investing in Africa, including language barriers and differences in culture, social psychology and organisational structure, but barriers can be overcome. Executives in Africa were challenged with finding a marine construction specialist for the DRC to work with Chinese contractors, who therefore needed to speak fluent Mandarin. It may sound like an impossible task, but our rigorous Search Process identified three suitably qualified individuals, and our client made a successful hire within 10 weeks of engaging us on the Search.
At the Johannesburg FOCAC 2016 submit, both Africa and China reaffirmed their readiness to promote industrialisation and modernise agriculture in Africa through alignment of industry, transfer of technology and human resources capacity development cooperation. The Action Plan (2016 – 2018) also incorporates post-Ebola recovery efforts including Chinese investment in medical and healthcare services as well as to improve healthcare infrastructure through construction, renovation and equipping of health facilities.
By 2018 the first phase of the FOCAC action will be complete. It is predicted that by 2018 ‘ordinary’ Africans will feel the difference of the China-Africa partnership. With a commitment to having a positive and lasting impact on Africa, we at Executives in Africa, hope that the FOCAC can deliver just that.