Chinese investment in Africa dates back to the 1980s with firms originating from Taiwan and Hongkong being the key players. The China Economic and Trade Cooperation white paper, 2010 states that in the wake of the new millennium, Chinese investment in Africa has taken a rather intense turn and rapid as that.

The newly found attraction in Africa for investors of Chinese origin has however garnered reactions from varying quarters especially scholars and journalists from developed and developing countries.

 The Chinese government however seems undeterred and with the creation of the Forum for China-Africa Cooperation, Chinese investment in Africa has come to stay. All these and more would be the core focus of this piece.


Foreign direct investment(FDI) as described by the balance of payments Manual, fifth edition by the International monetary fund(IMF), refers to an investment made to acquire a lasting interest in enterprises operating outside of the economy of the investor with the investors goal being to have an effective voice in the management of such enterprise.

The foreign entity or group of organizations that make such investment is termed the Direct Investor and in this case, being the Chinese and organizations of Chinese origin. A certain degree of equity ownership comes with being an effective voice in the management of such an enterprise with a threshold of about 10% equity ownership as suggested by the IMF. 

It is crucial to probe these documents as presented by the IMF too to quell doubts and fears that may have arisen as a result of a surge in the Chinese investment in Africa. The IMF document also states that being an effective voice in management strictly implies that direct investors are only able to influence the management of such enterprise and not they have absolute control. 

According to the ninth edition of the Africa Attractiveness report, released in 2018, the Chinese Investment in Africa only ranked fourth behind the United States of America, France, and the United Kingdom in terms of the number of projects invested in Africa. The Chinese state however came in tops as the largest investor in terms of total capital invested, doubling up the number of dollars invested by France or the United kingdom. These figures raise eyebrows considering the Chinese state despite having no historical relationship with the African continent has proven to be a force to reckon with as an emerging partner when it comes to foreign direct investments.

Assessing Chinese foreign direct investment in Africa due to difficulties encountered while trying to collate a reliable database. This difficulty comes from the inability to gain access to the methodology engaged by individual African countries. In the year 2007, the Chinese ministry of foreign commerce stated that Chinese investment in Nigeria is about $399.35 million, and in 2009 stated that the Chinese were $133.86 million, $1.29 million, and $6.086 million in Egypt, Uganda, and Morocco respectively.

Chinese foreign direct investment in Africa has been seen to increase from $1.4 billion in the year 2009 to $2.5 billion in 2012. This peaks the growth rate at 20.5% annually according to the 2013 edition of the China Economic and Trade Cooperation white paper. It is worthy of note that there are over 2,000 Chinese firms are seen Investing in over 50 African countries as South Africa leads the pack as the top recipient of Chinese foreign direct investment in Africa. Stability and good governance are key factors investors will consider, and China is not an exception.

Chinese investment in Africa: WHY AFRICA?

It is quite amusing to note that the population difference between the African Continent and the Chinese state as an individual entity is about 100 million people however, the people’s republic of China has sufficiently managed its large populace and confidently stretched its foot beyond its borders. China is estimated to have a population of about 1,439, 323, 726 as compared to that of the African populace of about 1, 360, 011, 723 individuals according to the United Nations in the year 2020. The Chinese government has exhibited itself as being a visionary and its desire to sufficiently cater to its ever-increasing populace. The same be said of its African contemporaries who have a mountain of corruption to surmount. That being said, varying factors have fueled Chinese interest in the African continent.  


The African soil accounts for about 90% of the entire world’s supply of platinum and cobalt, half of the world’s gold supply, two-thirds of the world’s manganese, and 35% of the world’s uranium. Also, 75% of the world’s contain, an important mineral used in electronic devices can also be found on the African soil. These have given the Chinese government sufficient reasons to look towards the African continent. Resources like this amongst other raw materials are needed to keep the Chinese populace going.

Chinese investments span all sectors of the economy with special attention on mining and oil. Most Chinese companies on African soil are state-owned, hence this gives the Chinese government easy access to the abundant raw materials embedded in Africa.

Mining investments alone account for nearly one-third of China’s total Foreign direct investment in Africa. With such a solid base supply of critical raw materials, China strengthens its economy for generations unborn.


Considering the developmental state of African economies, Chinese investment in Africa ensures a notable competitive edge for Chinese companies when bidding for contracts since they already obtain substantial subsidies from the Chinese government.


Despite having no historical relationship with the African continent, the Chinese have effectively stretched their global relevance to the African soil. Chinese investment in Africa will go a long way in ensuring sufficient political alliance on the African continent.

In addition to this, China has also been expanding its military presence in Africa, rivaling the United States of America.


The Chinese have proven to have good business sense and thereby considering where its primary emerging market opportunity exists.

Like any wise investor, the potential for a high return on investment does exist on the African shores and has seen the Chinese investing in all areas of the African economy. Such areas include,






Commercial logistics

Port Transportation


In the year 2009, the Yuemei Group invested $50 million to establish a textile industry park in Nigeria.

In the year 2012, the Tanzanian stock exchange also recorded about $541 million in Chinese investment.

The Huajin Group also invested about $10 million to establish a shoe factory in Ethiopia.


Amidst the immediate economic benefits of Chinese investment in Africa, there are concerns of a potential debt trap as a result of not meeting loan agreements. These fears are not out of place considering the mismanagement of funds by African leaders. Kenya and Ethiopia are case studies. These fears were however dismissed by the Nigerian transport minister saying pinpointed clauses were mere loan agreements. There have been cases of natural resource export being used as security to pay back such loans and in other scenarios, the Chinese company gains access to a block of natural resources.

Loan terms should be realistic and achievable to quell doubts and suspicion of ulterior motives. In the year 2007 for example, the Democratic Republic of Congo negotiated a USD 6 billion loan which was secured by the Chinese-Congolese mining joint venture, with the Chinese holding 68% of the shares. The loan is then paid back through the export of minerals. The loans are used for large-scale infrastructure projects, hospitals, schools, and social housing construction.

Angola also received a loan of USD 2billion in 2004 and USD 2.5 billion in 2007 which are to be repaid in commodities. The loan was meant for the construction of 1,300km of railway and 300km Road In Angola. Other purposes itemized by Brautigam include the construction of hospitals, schools, social housing, telecommunications network, and investment in agriculture. However, analysis has shown that Chinese past oil-backed loans are slow to disburse with only about $2.5 billion released from the $4.5 billion loan agreement in the year 2013. Repayments for the loans are said to have been made through direct shipments of oil which are valued at the prevailing market price.

The sudden dominance of African economies by Chinese firms has been brought to the fore by several keen observers. Considering the image shift perceived from Chinese operations on Africa raises the assumption as to if there is more than meets the eye. The Economist says western countries believe the Chinese had always viewed Africa as a hopeless continent until recently this was met with mannerisms emanating from the Chinese that paint Africa as a land filled with opportunities. This has also revived the interest of western countries in Africa.

Overall the relationship between the Chinese state and the African continent has been mutual, however, African leaders should pay close attention in terms of monitoring so it doesn’t degenerate to exploitation.

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