Africa’s Top 10 recipients of Chinese investments

SA is ranked second amongst the African countries with the most Chinese investments, according to a study by the US-based Brookings Institution.

“China’s increased trade with and investment in Africa has boosted the continent’s growth rate, but has also generated considerable controversy,” said the institution release.

But “Why is China investing in Africa? Evidence from the firm level” by Brookings’ analysts David Dollar, Heiwai Tang and Wenjie Chen, provided a different view of China’s outward direct investment (ODI) in Africa by investigating China’s macro and micro ODI data.

First, using aggregate data on China’s direct investment in each African country, the paper debunks a number of popular myths about China’s activity on the continent.

According to the most recent data, China accounts for about 3% of the stock of direct investment in Africa. No doubt that figure is growing rapidly, but still China’s investment is relatively small.

Chinese investment is attracted to natural resource wealth, but no more so than Western investment.

A final point about the allocation of Chinese investment overall is that it is indifferent to the recipient countries’ property rights and rule of law. However, Western investment tends to stay away from the poor governance environments. Because of this, the share of Chinese investment in the poor governance environments tends to look high.

The Top 10 African countries were listed as: Nigeria with 404 Chinese-funded projects; SA with 280; Zambia (273); Ethiopia (255); Egypt (197); DRC (193); Ghana (192); Angola (189); Zimbabwe (167); and Tanzania (149).