Under the background of deepening bilateral relations and cooperation, what are the future prospects of China enterprises' investment and trade in Africa? What are the opportunities and challenges?

In this regard, AndreiUgarov, a Nigerian partner of PricewaterhouseCoopers and head of corporate finance department in West Africa, said in an exclusive interview with CBN that in the past, China enterprises mainly invested in Africa in the form of loans, and should pay attention to establishing long-term friendly cooperative relations with African enterprises in the future.

The RMB swap agreement is of great significance

"20 17, the bilateral trade volume between China and Africa is about16 billion US dollars. South Africa is the country that imports the most goods from China in Africa, followed by Nigeria and Egypt. " He said that with the growth of China-Africa trade, some mechanisms have been established between China and some African countries to promote bilateral trade.

Taking Nigeria as an example, he said that Nigeria has always implemented foreign exchange control, which sometimes leads to a shortage of foreign exchange, making it difficult for enterprises to obtain foreign currency. "About three years ago, with the fall in crude oil prices, the Nigerian government's foreign exchange reserves were damaged, and it was impossible to support its own currency through foreign reserves, which led to the rapid depreciation of its own currency. It was difficult to get dollars in Nigeria at that time. " He said that in this context, China and Nigeria signed a RMB swap agreement.

He also said that with the deepening of China's investment and trade in Africa in the future, it is expected that more African countries will sign currency swap agreements with China.

You Gurov also suggested that China enterprises transfer some manufacturing links to local production in Africa in the future. He analyzed that because African countries' exports to China are mainly commodities, the prices are very unstable. As long as the trade pattern between China and Africa is always that China imports bulk commodities from Africa and exports finished products to Africa, this will be a core challenge.

"Therefore, in view of the population structure and scale of Africa, China enterprises can try to bring some manufacturing links into Africa and export the finished products directly to all parts of the world." He said.

We should pay attention to establishing a long-term partnership.

However, he pointed out that this situation is changing now, and China's investment in Africa is gradually developing into direct investment, including private equity. "In the past 65,438+00 years, the direct investment was about $3 billion to $4 billion. Basically, I think this is a real opportunity for China to invest in Africa. " He said.

Regarding the "Belt and Road Initiative", Yugulov suggested that "China needs to change its past model, and related projects and funds had better not appear in the form of traditional loans and debts".

"They also need funds, but in the past, a lot of funds in western countries were short-term investments, hoping to get a return on investment within five years, which is very difficult in Africa because Africa needs a considerable amount of (early) investment." Therefore, he said, China enterprises investing in Africa need to adopt a long-term investment approach.

Secondly, African enterprises also need China enterprises to share knowledge while introducing investment, so as to promote local capacity building in Africa.

"In the past, when some enterprises came to invest or do projects, they often brought their own teams and evacuated directly after completing the project. African companies have no good impression on this. " He said: "I think a better way is to help local people build relevant capabilities when China enterprises invest or do projects in Africa, so that African enterprises will have greater interest in cooperation."

Finally, Yugulov pointed out that African enterprises also hope that China enterprises can establish the whole supply chain when they invest in Africa.

For example, he said that at present, if a China enterprise wants to invest in consumer products, it often brings products from China and sells them. But in the future, if it can develop local production capacity in Africa, even invest in some local African suppliers to supply African products, and hire African locals to provide more employment opportunities for African young people, it will get a more positive impression.

There are huge investment opportunities in consumer goods, science and technology and other fields.

First, he pointed out that there is a huge supply gap in Africa's power sector. China enterprises can not only invest in electric starting equipment, but also invest in some related parts.

Agriculture is another sector with plenty of investment opportunities. "60% of the world's unused land that can be converted into agricultural land is located in Africa, so there are huge investment opportunities." He said.

"Another investment field with unlimited potential and closely related to China enterprises may be logistics," he said. "Logistics is a big field, and it also accommodates local manufacturing industries that manufacture various products."

In fact, he said, China enterprises have invested a lot of money in Ethiopia's manufacturing industry, and some China enterprises have also produced consumer goods in Ethiopia, which has been well evaluated.

"For Africa, technology is a relatively new field. In addition to Kenya's leading position in Africa, countries such as Nigeria have just begun to develop technology. " He said that although there are companies like Facebook and Google in some African countries, their layout is still in the early stage, and the time window for China enterprises to enter the field of science and technology still exists, and China enterprises can be pioneers in this respect.

He further pointed out that financial services are an area where there are great opportunities in the field of science and technology, because Africa has the opportunity to use financial services to achieve leapfrog development.

"There are still a large number of people in Africa who do not have bank accounts. This is an opportunity for financial services technology to enter and fill the gap. I think China enterprises can bring a lot of relevant knowledge to Africa and invest in new technologies to help these people establish links with the formal financial system. "

"I came to China with some Nigerian companies, but they can't speak Chinese and English fluently." However, he said that the Confucius Institute has now started teaching Chinese in African countries such as Nigeria. With the improvement of communication between China and Africa, the language barrier between China and Africa will be gradually eliminated in time.

In his view, other challenges include how to improve African enterprises' positive views and acceptance of investment in products from China and China. In this regard, he said that African and even the world's views on China enterprises are changing. In the past, China's manufacturing industry was equivalent to cheap products, but now, the situation is very different. Now Africans gradually feel that China enterprises can provide high-quality products with more competitive prices than western enterprises.

Finally, he stressed, "Compared with western enterprises, African enterprises are more likely to be associated with China enterprises and the people of China, because they feel that the development process that China experienced in the past is exactly what Africa is experiencing now. They also know that China is developing rapidly, and they feel that the knowledge that China enterprises can share with them (compared with the West) is more relevant. "