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Business / Economy

Africa becoming hot destination for investment

By Li Jiabao, Du Juan and Zhang Zhouxiang (China Daily) Updated: 2014-02-25 07:29

'Exceptional opportunities'

"As far as Chinese investors are concerned, exceptional opportunities exist in industries such as aerospace, automobiles, electronics, textiles and leather, offshore and agro-businesses," he said in at a recent high-level forum on China's overseas investment.

Africa becoming hot destination for investment

Africa becoming hot destination for investment
He added that "substantial investments in the telecommunications, industrial, real estate, tourism and banking sectors have seen the Moroccan economy grow significantly in recent years".

In the oil and gas sector, North Africa would like to have more capital from a cooperative relationship, but political disputes and safety issues have been a stumbling block to Chinese investment.

Although Africa has a wealth of natural resources, its refining technology has been lagging behind for years.

Over the past year, Africa's refining capacity as a whole remained flat, but many countries in the region have plans to build new refineries.

According to a report from the CNPC Economics and Technology Research Institute, Africa plans to build new crude oil refining capacity of 80 million metric tons by 2020.

Libya is planning to invest $60 billion to expand its refining capacity from its current 380,000 barrels a day to 1 million barrels a day to meet growing domestic demand for fuel and reducing its dependency on imported oil products.

Recently, Libya entered into discussions with Chinese companies, as well as BP Plc, Royal Dutch Shell Plc, Eni SpA and Total SA for possible joint ventures, though nothing has been nailed down yet.

At the 2012 Forum on China Africa Cooperation, China committed to extend $20 billion in loans to African governments by 2015.

China's loans to Africa total $30 billion to $40 billion, of which China Development Bank and Export-Import Bank of China each financed roughly half, Simon Freemantle, a senior Africa analyst at Standard Bank Group, and Jeremy Stevens, a Beijing-based economist for Standard Bank Group, said in a research note.

"China's policy banks still have capital available to commit to Africa. These loans to Africa play an important role in creating opportunities for Chinese construction and engineering firms and exporters eager to move up the value chain," the note said.

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