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Massive infrastructure projects.

China is financing and carrying out billions of dollars worth of infrastructure projects on the African continent. It is one of the most commonly cited benefits of the relationship for Africans. The provision of infrastructure is one of the cornerstones of the relationship as, in exchange, African countries are giving China access to its resources.

In Kenya, China is playing a key role in a number of construction projects. In August, $5bn worth of deals were signed between the two sides. They include the construction of a railway linking the Eastern port of Mombasa, Kenya's gateway to the Indian Ocean, and the western town of Malaba, on the border with Uganda. It is hoped that the infrastructure development will lower transport costs for products like tea, coffee and machinery by 60%. The railway will also be extended to Tanzania, Uganda and Rwanda in the years that follow.

"We intend to make it operational by 2018. There is urgency and we are committed to realise this dream," Kenyan President Uh-uru Kenyatta said during an inauguration ceremony for the project in Mombasa in November. He said he hoped that the

China is also financing the construction of a number of new roads in Kenya, along with the Nairobi Metropolitan transport system. Meanwhile, in July, China and Nigeria signed an agreement to provide the latter with $1.1bn of low-interest loans to fund a number of projects, including a new railway for the capital Lagos, and new airport terminals in four cities - Lagos, Port Harcourt, Kano and Abuja. Those in Lagos and Port Harcourt should be concluded within a year, those in Kano and Abuja by 2015. The interest rates of the loans are low at less than 3%.

In Uganda, China is involved in the construction of an expressway between Entebbe International airport and the country's capital, Kampala. The China Import and Export Bank (Exim) has committed $350m to building the four-carriage road. New roads connecting Fort Portal in the west and Ntoroko, Bundibugyo and the region bordering the Democratic Republic of Congo, are also due to be concluded soon. And China is also involved in improving Uganda's energy infrastructure. Sinohydro Corporation is building the 600MW Karuma Hydropower darn, for example.

"Ever since -1986, the Ugandan economy has been growing at the rate of 6.5% per annum. The economy could have grown at a much faster rate if we had the capacity to address all the strategic bottlenecks such as electricity," said Uganda's President Yoweri Museveni in August during the plant's commissioning.

"Unfortunately, at that time, we did not have our own money and our partners from outside tended to put frivolous points ahead of the substantive needs of developing infrastructure," he said.

"Our Chinese friends also have, not only the technical capacity, but financial capacity as well on favourable terms. Chinese lending is also completely free of the usual meddling and high-handedness of some of the friends from outside. They also focus on the primary sectors of the economy such as infrastructure instead of focusing on secondary sectors of national life," he said.

Chinese involvement in construction projects in Ethiopia is also deepening. Exim has disbursed $4.81bn of loans to fund a new railway, which will run between the country's major cities. It should facilitate the transport of materials that are key to Ethiopia's economy, including potash, to international markets, via Djibouti.

Helping lift Zim's economy

China is providing Zimbabwe with a $319m loan to finance a project to expand the Kariba dam in Zimbabwe. It will take four years and boost the country's energy capacity by 300 MW. The loan is at 2% interest and it is believed that it will take 20 years for Zimbabwe to repay it. Zimbabwe currently faces a 1,000 MW electricity shortfall.

China's Sino Hydro and China Machinery and Equipment Company has also won a tender for an expansion project at the country's Hwange Power Station. The country's President, Robert Mugabe, was quoted in Chinese press saying that the updating of the capital city's water service delivery plan is also in the pipeline, although he did not name the partner. "The plan will see the construction of three new dams and additional water treatment plants over a period of seven years," Mugabe said, according to Xinhua.

Zimbabwe's eagerness to receive help from China to improve its infrastructure was clear earlier in the year when Chinese Vice-Premier Wang Yang visited the country. "We are keen to have Chinese investors in our fledgling economy, albeit, on a win-win basis," said Prime Minister Morgan Tsvangirai. "Areas where we need assistance include investment in the development of key infrastructure such as roads, rail and other sectors, which would go a long way in improving the business environment in our country."

Last year, it was also revealed that China's Guangdong Bureau of Coal Geology is to construct a 1,200 MW power plant in Zimbabwe, in a deal worth $3.5bn. In July 2012, it emerged that Zimbabwe Electricity Supply Authority was engaging in talks with China Railway Group to construct a L000MW power plant. In the same month, China also put forward capital to help finance the National Matabeleland Zambezi Water Project, worth $, which should play a major role in bolstering Zimbabwe's agricultural sector.

Nonetheless, some infrastructure projects with Chinese involvement in Africa have raised controversies. Some have been labelled vanity projects, which do not benefit the majority of Africans. They include the construction of the Nova Cidade of Kalamba in Angola, a new settlement near the country's capital, Luanda, which cost $3.5bn to build. The dwellings in the Nova Cidade are beyond financial reach for most Angolans and the settlement was criticised for achieving occupancy levels of just one in 10.

Chinese-led constructions have also sparked labour-related controversies. The use of Chinese labourers has raised criticisms that African workers are not feeling the benefits of infrastructure developments. And when Chinese construction organisations have used local labour, some workers have made claims about low wages and poor conditions. Earlier this year, labourers working on the Lagos to Badagry highway reportedly protested over poor conditions, including the lack of medical facilities on site, and allegedly low wages.


China put forward capital to help finance the National Matabeleland Zambezi Water Project, worth $1.2bn, which should play a major role in bolstering Zimbabwe's agricultural sector railway would "spur expanded production and reduce the cost of goods and services ... An economy only ever thrives on the foundation of proper infrastructure".
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Title Annotation:China & Africa
Publication:African Business
Geographic Code:9CHIN
Date:Jan 1, 2014
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