In the fast lane

China has a big role to play in transformation of Africa, and it is time for the country to reassess its goals in the continent, says chief of New York Forum

Richard Attias is an eternal optimist and someone who believes that Chinese entrepreneurs will play a big role in the transformation of Africa.

As the executive chairman of Richard Attias and Associates, a US-based global strategic consulting firm, and the founder of the New York Forum Africa, an annual meeting that promotes economic leadership in Africa, he says that the continent has long been neglected, but that it has the potential to offer rich rewards for investors

The 54-year old Attias, who was born in Morocco, says he believes in new ideas and making things happen, something that he finds in abundance among present day Chinese entrepreneurs.

"They (Chinese entrepreneurs) are playing a key role everywhere," Attias says, pointing to the different projects, including roads, hospitals and sports centers, that Chinese companies have helped build in Africa.

The Pan-Africa economic conference, organized by the New York Forum Africa in Libreville, Gabon every year is considered to be an important economic event as it brings together the key stakeholders who have a big role to play in the continent's development.

The third edition of the New York Forum Africa will be held from May 23 to May 25 in Libreville and will draw more than 150 speakers and 800 participants including business leaders, policymakers, and even some heads of state from 50 countries. The main points for discussion this time around are topics pertaining to the broad transformation of the continent.

"Transformation is a key word - it means all natural resources should be transformed on the ground, investment should be transformed in industries, and education should be transformed into talents" Attias says.

"Chinese investors have a big role to play in this transformation," he says. More importantly, it is also the opportune time for Chinese investment in Africa to be more "inclusive" and for the partnership to be a "win-win" one that creates more jobs and boosts the local economy.

"(Chinese) investment is certainly entering a new phase. It has moved beyond the traditional realms of just bringing in capital and expertise," Attias says.

"The striking difference is that Chinese companies have now realized that being a good corporate social responsibility partner can bring huge economic benefits."

For this, Attias says, it is important that Chinese investors form "long-term" goals and focus on what they can do "for" the local communities.

"The challenge for Chinese companies is to form sustainable economic partnerships and get the local workforce more involved in such projects," Attias says.

Jerome Youmani Lankoande, chief executive of Innovation Quebec, a Montreal based-firm specialized in technology scouting, says China will need to invest more in market research if it wants to make tangible gains in Africa as the African markets are very fragmented.

"Africa is a continent with many countries, many regions and different cultures. Chinese investors should get to know more about African culture - region by region, country by country - as French and British investors did," Lankoande says.

"For that, an important element will be to invest in African culture from coast to coast."

China-Africa trade has grown rapidly in the past decade. In 2000, the bilateral trade between the two sides was around $10 billion, while in 2012 it topped $200 billion. Chinese foreign direct investments in African nations is expected to reach $50 billion by 2015, according to a report published by Standard Bank, a South African lender.

In March last year, Chinese President Xi Jinping visited Tanzania, South Africa and the Republic of Congo as part of his first overseas trip as president.

Earlier this month, Chinese Premier Li Keqiang made an eight-day trip to Africa and visited Ethiopia, Nigeria, Angola and Kenya, as part of China's efforts to expand economic ties with the continent. Li's visit concluded with the signing of a number of deals on trade, energy, investment and development, including a call to expand cooperation in infrastructure and a pledge to increase Chinese aid to Africa by $12 billion, which includes $10 billion in loans and $2 billion for the China-Africa Development Fund.

In Kenya, Li signed agreements with Kenyan President Uhuru Kenyatta and other East African leaders to build a $3.6-billion, 600-kilometer railway line connecting Nairobi to the Kenyan port of Mombasa. Construction is expected to start in October and will be completed in March 2018 and the line will be part of a regional railway system that will extend through Rwanda, Uganda, Burundi and South Sudan. The Export-Import Bank of China will fund most of the project and the Kenyan government will provide the rest.

Attias says that China's commitment to build infrastructure will help in forging long-term relationships with local communities in Africa.

"It's important to understand the vision and strategies of the Chinese companies," he says.

Wang Xiaoyong, secretary-general of the China-Africa Business Council, says the railway agreement is an important milestone in Sino-African relations.

"Building the railway is a significant step for Kenya and other African countries. At the same time, it is also important for China to be part of this process and help in the construction," Wang says.

Building the railway line will involve not only financing and construction but also materials supply and vocational training of local workers, Wang says. "Chinese investors can help on different fronts and it will help them build their reputation as investors in Africa."

Lankoande, the author of a book on China's foreign direct investments in Africa, says China stands out as an investor with its thinking about long-term return on investment in Africa.

"While oil and mining remain an important focus, Chinese investments are targeting sectors ranging from manufacturing to food. This diversification is very important for the African economy," Lankoande says.

He also agrees with Attias' ideas about African transformation.

"I think the most important thing the Chinese investors can bring to Africa and make a difference is through technology transfer," he says. "As we all know, China became a major player in technological innovation and it has several technologies that meet Africa's needs, especially in terms of the features and cost," Lankoande says.

Terming China, "a human resources power in the global market", Lankoande says there is immense potential to create a win-win partnership with Africa in vocational training.

"China produces over 400,000 engineers every year, and this is huge compared to any other country in the world. These engineers can help make technology transfer from China to Africa a reality," he says.

There are also opportunities for Sino-Africa technology transfer in natural resources also as Chinese engineers are facing the same development challenges that African engineers are striving to overcome, Lankoande says.

He says that most of the investment opportunities in Africa are still untapped. "Africa is the last frontier for growth," Lankoande says. "Many African countries are generating wealth at a rate presently unmatched in any other part of the world and that makes them primary destinations for investment from all around the world."

Opportunities with high return on investments exist in sectors such as infrastructure, manufacturing, agriculture and telecommunications, he says.

"Africa is a playground for ICT (information and communications technology) innovation, especially in the telecoms sector. With a mobile market of over 700 million people, Africa is definitely the place to be for any telecom company," Lankoande says.

Chinese investors have already tapped into most of the industries including health, education, transport and storage sectors. There are now more than 1,600 Chinese development finance projects totaling $75 billion in more than 50 African countries.

Lankoande says Chinese investors are also facing challenges that any other investor would face in Africa.

"These challenges are the political instability in some countries, macroeconomic instability, insufficient infrastructure and the lack of market insights," he says.

Attias says the possibility of building partnerships is one of the major goals of the New York Forum Africa, something that he describes as a "market place" for global investors to show "concrete actions".

"Global partnerships can help create local jobs," says Attias. "If we put Chinese companies together with US and European companies and maybe build joint ventures in Africa, this is the future of our economy."

Major economic giants such as the US, China and Brazil should team up to work in partnership rather than compete with each other. "If you compete instead of sharing, at the end of the day you are going to kill jobs," Attias says.

Attias' connection and understanding of China traces back to when he first visited the country in 1986. The former producer for the World Economic Forum in Davos also took the WEF to Dalian in 2007.

His visits to China often reminded him of his native Moroccan culture.

"The way they respect the older generation and the way they pass on family values to the next generation have close links to Moroccan culture," Attias says.

Besides the New York Forum Africa, Attias is busy with several other major events his company was awarded including the 15th Francophone Summit in Dakar, Senegal in 2014, and the 50th All-Africa Games in Brazzaville, the Republic of the Congo in 2015.

The New York-based Richard Attias & Associates recently saw WPP, the world's largest global communications company, purchasing 30 percent of its shares.

With WPP's influence in China, Attias hopes that he will be able to bring the New York Forum to China soon.

"Our aim is to bring together thousands of CEOs and global leaders and also encourage innovation and youth participation," Attias says.

yuweizhang@chinadailyusa.com

(China Daily Africa Weekly 05/23/2014 page1)