China is Africa’s largest trading partner for the sixth year running, according to Charles Boamah, African Development Bank’s Vice-President of Finance. The trade volume between the two amounted to US $220 billion in 2014. This is reportedly more than double the trade level between the United States and the African continent. The same is true for investments.
Boamah made the remarks during an interview on China Central Television (CCTV) at the Forum on China-Africa Cooperation (FOCAC), which took place on December 4 and 5, 2015 in Johannesburg, South Africa.
During the summit, China’s President Xi Jinping announced a US $60 billion aid package for Africa, which would finance a broad range of programmes to help the continent build infrastructure, industrialise, modernise its agricultural production, boost capacity of its workers, and improve health care.
Xi described the relationship between China and Africa as a win-win cooperation, noting it was geared towards commitment to common development. “In conducting China’s relations with Africa, we adhere to the principles of sincerity, practical results, affinity and good faith and uphold the values of friendship, justice and shared interests," Xi said in his address to African Heads of State and Government, among other dignitaries.
The pledged amount is three times the aid package which China offered Africa at the 2012 FOCAC conference held in Beijing.
Responding to CCTV’s question on the notion that investing in Africa was risky, Boamah underscored that the AfDB had various structures in place to mitigate risk and provide more confidence to investors. He cited the Bank’s support to Côte d’Ivoire, at a time when the country was emerging from a post-electoral crisis. “In 2012, just when the country was getting out of turmoil, there was a bridge that we needed to build, the Henri Konan Bédié Bridge. There was a lot of confusion, and many asked, ‘Is this the right risk to take?’ and we did it,” Boamah said. The HKB Bridge, also known as Abidjan’s “third bridge” has since vastly improved mobility in the country’s financial capital.
“Because of our role and relationship with member countries, our involvement helps to reduce that risk and that is why countries like China partner with us,” said Boamah.
China became a non-regional member of the African Development Bank Group in 1985.
Boamah told the Chinese television network that the African continent needs to amass more money to meet its infrastructure needs. “Every drop helps,” he said, adding that Africa needs US $90 billion a year [until 2020] to close its infrastructure deficit.
Lack of infrastructure translates to the loss of two to three percent of GDP in Africa, Boamah added.
Infrastructure is a key pillar in the Bank’s strategic approach, said Boamah. The AfDB has already set up the Africa50 Infrastructure Fund, a continental initiative dedicated to accelerating infrastructure projects in Africa by mobilizing public savings and leveraging finance from the private sector.