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May 3, 2015

China-Africa in the news: Billion-dollar deals, Chinese football, Kenyan ivory, cheap cement exports

It was a week of billion-dollar deals. China Railway Construction Corp Ltd signed two deals in Nigeria and Zimbabwe worth a combined $5.5 billion. In Nigeria the Chinese-state owned corporation signed a $3.5 billion contract with the Ogun State government to build a light rail system across the state. CRCC will also undertake a $1.93 billion residential construction project in Zimbabwe. Last November the same company signed a $12 billion contract to build a railway between Lagos and Calabar in Nigeria, a deal described as "China's single largest overseas contract project" at the time.

The oil-rich Equatorial Guinea will also benefit from China's largesse after signing a $2 billion 'infrastructure pact' with the Industrial and Commercial Bank of China, China's biggest lender by assets. The deal was announced during a state visit by Equatorial Guinea's President, Teodoro Obiang Nguema, to Beijing, during which he meant with his Chinese counterpart, Xi Jinping. It will financially 'support' Nguema's government (notorious for human rights abuses and corruption) and Chinese firms operating in the country.

Zambian footballer flourishes in China. Most people would struggle to name a Chinese football club, let alone a prominent player plying his trade in China. Do not count Zambians among those people. Jacob Mulenga, a striker who has received more than 50 caps for Chipolopolo, currently plays for Chinese super division side Shijiazhuang Yongchan FC. He says China is "a country with unlimited funds towards football," and advises African footballers to consider moving there should the opportunity arise.

Thailand seizes 3,000kg of ivory from Kenya. Customs authorities in Thailand seized a container holding ivory weighing about 3000 kilograms and worth $6 million originating from Mombasa, Kenya. The container seems to have left Mombasa legally, and was "marked as tea leaves transported from Mombasa, Kenya, and on to Laos." Laos is a transit point for ivory destined to China and Vietnam, according to conservation groups.

What do structural changes in China's economy mean for Africa? Frontier Advisory's Martyn Davies believes China will move manufacturing to Africa as costs rise in the East Asian nation: that is already happening, as we have noted before. Reform measures targeting large state-owned enterprises could however result into less state-driven investment in Africa, Davies argues. Read the whole article on How We Made it in Africa.

Tanzania wants fewer Chinese workers. Its Parliament is deliberating legislation -to come into effect on 1 July - that makes it harder for foreigners to work in the East African country. The law, which is apparently aimed at enabling locals get jobs in high growth sectors, gives the Labour Ministry the sole power to issue work permits and identify sectors where foreigners can be employed. Its motivation could be local anger at the "perceived infiltration of Chinese, Kenyan and Ugandan workers into unskilled, semi-skilled and managerial positions."

Kenyan firms to provide steel for railway. Over 5000 tonnes of steel worth $3.5 million to be used in the construction of Kenya's standard gauge railway will be sourced from local firms. The railway is being built by the China Road and Bridge Corporation.

Tanzanians may lose jobs to Chinese imports. No, Chinese workers are not planning to go to Tanzania to take over the jobs before the aforementioned law is implemented. Instead, a cement manufacturer warned it could cut production - and its labour force - due to "oversupply and lower prices partly caused by cheaper imports from China and Pakistan." The manufacturer in question is Tanzania Portland Cement Co. Ltd., partly owned by a German firm.

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