African govts urged to utilise China’s SME fund

An Assistant Professor at the School of Economy and Business Management Science of the Zhejiang Normal University, Professor Xiaofeng Zhang, has tasked African entrepreneurs to take advantage of the Fund for African Small and Medium Scale Enterprise set up by the Chinese government to grow their businesses.

He said even though the fund was set up by China as a loan facility with a seed money of $ 2 billion, only 0.3 per cent of the total amount has so far been accessed.
Speaking on the topic: "World Economy and Economic Development in Asia-Pacific and Africa", Professor Zhang advised African entrepreneurs to make good use of the fund.

Trade

He said the volume of foreign trade between China and the African continent resulted in 30 per cent growth between 2000 and 2009.

Between 2014 and 2015, Professor Zhang said, the volume of trade between the two had increased rapidly to more than $100 billion.

"It is therefore the prediction of many economic experts that the volume will hit beyond $200 billion by close of 2015," he said and stressed that the current trade ties between China and Africa had changed from the days of amassing resources from the African Continent to the search for vibrant markets.

"Last year, for instance, China exported over 49 per cent of its machinery products into Africa. This is a clear indication that China is now a strategic partner to the African Continent in terms of trade," he said and expressed confidence in the relationship that exists between the two partners.

China’s investments

On China's plans to invest on the African Continent, the economic scholar highlighted some of the challenges confronting Chinese investors on the continent and said Africa must do more to convince and entice such investors into their countries.

He cited negative tendencies such as pilfering of equipment and misuse of raw materials; political instability, high tax regimes, xenophobic attacks and ultimately the unavailability of skilled workforce as some of the factors hindering capital-intensive Chinese investments in Africa.

He urged local governments in Africa to rigorously enforce and apply their laws to deal with some Chinese nationals whose activities do not infringe the laws of the countries they operate in.

This, he explained, was because the China government might not be privy to the activities of such Chinese nationals.

All these notwithstanding, Professor Zhang said China was still interested in trading and investing in Africa because Africa had lots of prospects for the future. — GB