Chinese fund major infrastructure projects

China has become one of the biggest funders of much-needed infrastructure development projects in sub-Saharan Africa, according to the World Bank’s 2013 Global Economic Prospects Review. This strategic investment is required to ensure that there is free flow of raw materials to China and manufactured goods back into one of the world’s fastest-growing markets. The Forum on China-Africa Cooperation (FOCAC) has announced that China will provide US$20bn of credit lines to African countries to assist in developing infrastructure, agriculture, manufacturing and small and medium-sized enterprises Infrastructure investment will increase the demand for capital goods, leading to more demand for project cargo services. The increased demand for capital goods to meet infrastructure and other investment needs, growing demand for oil among oil importers, and rising per capita incomes, should boost demand for consumer durables and other imports, says the report. It will also support continued economic growth. “Continued investment in infrastructure will be critical to maintaining and strengthening growth over the medium term – potentially boosting growth rates in the region by two percentage points,” says the report. “Indeed, infrastructural shortcomings may be depressing firm-level productivity by as much as 40% in some countries in the region. Sub-Saharan Africa exports are projected to continue increasing rapidly over the forecast horizon, partly due to an expected strengthening of global demand, but mainly reflecting further increases in the region’s share of global markets – itself partly a reflection of productivity growth, but also the coming onstream of new mineral exports in several countries (eg, Burkina Faso, Mozambique, Niger, Cameroon, Gabon, Sierra Leone etc.),” it adds. CAPTION Angola’s crumbling infrastructure ... investment critical.