Africa fund intends to raise $2b in 2014
UK Zambians | 31 December 2013

Africa fund intends to raise $2b in 2014

The China-Africa Development Fund, the nation’s largest equity fund focused on African investments, will raise another $2 billion in 2014 to boost the continent’s agricultural and steel sectors and upgrade its industrial development.

Chi Jianxin, president of the fund, said China has been looking to invest in different ways in Africa instead of focusing only on building infrastructure projects such as roads, bridges, ports and cement plants.

The fund became operational in 2007, with a target of raising $5 billion. It raised an initial $1 billion, with a second tranche of $2 billion being contributed by the China Development Bank in 2012.

“With a large number of young workers and abundant natural resources, African countries have good opportunities to capitalize on high prices of international agricultural products and commodities,” Chi said.

Because agriculture is crucial for stable development and poverty reduction in Africa, the fund has provided financial assistance or formed joint ventures in a number of agricultural or related projects.

Those projects include a grain processing plant in Mozambique, a sisal project in Tanzania, cotton planting in Malawi, and grain planting and poultry projects in Zambia.

The fund will work with Shanxi Tianli Enterprise Group Corp to finance a $60 million cotton planting project in Madagascar next year. The fund and China Development Bank will inject $12 million and more than $20 million, respectively, into this project. The rest will be raised by Shanxi Tianli.

China’s direct investment in African agriculture grew fast, from $30 million in 2009 to $82.47 million in 2012. Investment by Chinese companies in African agriculture has increased grain supplies in the countries concerned and raised the agricultural productivity of more than 18 countries.

Justin Yifu Lin, former chief economist at the World Bank, said most sub-Saharan African countries are poor not because they don’t know how to consume but because they don’t have the necessary human and physical production capacity.
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Source: UK Zambians