Business partnership opportunities for Africans and Chinese – Part 1

Africa and China will continue to build international relationships with African countries establishing solid bilateral relationships with their Chinese counterpart. Most cooperations between China and African countries are hoped to be based on a win-win scenario. However, there cannot be a mutual relationship where one partner is only seen as coming to the table with uncooked food. In this article, we present a list of business opportunities that Africans can take up to ensure there is a win-win relationship between Chinese and Africans.

Infrastructure and construction

Africa’s infrastructure has not reached saturation yet meaning there is more room for real estate, industrial development and major construction works such as roads and other social amenities. The infrastructure boom in Africa presents a strong opportunity for Africans to establish partnerships with the Chinese to develop some of these projects. Partnerships of that nature could expose African contractors and industry players to the Chinese markets based on recommendations from the good relationship and quality commitment that would be been observed by the Chinese counterparts.

Renewable energy and Clean technology

Africa has the world’s largest renewable energy reserves while China is the world’s largest exporter of renewable energy technology. While China has the technology, Africa has the resources presenting another opportunity for collaboration between Africans and Chinese. With the surge in the number of startups by African youth, this is an opportunity to explore clean energy exportation. Developing capacities to maximize Africa’s clean energy potential would not only feed the domestic African markets but also feed a needy Chinese energy market that despite its quantum leaps in clean energy technology is dwarfed by resources when compared to Africa. So are you thinking about venturing into a business in 2024? Think about renewable energy exportation and think about the unsaturated Chinese market.

Trade and Logistics

China’s trade with Africa reached US$282 billion in 2022 with exports topping by $164.49 billion and imports still trailing despite clocking $117.51 billion. Beijing has been pushing to increase imports from Africa and that partially accounted for the improved 11% in trade value in 2022 as compared to the previous year. While the majority of Chinese imports from Africa have in the past been confined to raw materials, the dynamics have been positioned to change; awaiting Africans to take advantage. China now wants Africa’s finished products.

A drive to increase imports from Africa to $300 billion by 2025 has led to the decision to waive duties on over 8,000 commodities from Africa. At least 12 African countries will enjoy duty-free exports to China for 98% of previously tariffed commodities. Starting from December 1, 2022, Benin, Burkina Faso, Guinea‑Bissau, Lesotho, Malawi, Sao Tome and Principe, Tanzania, Uganda and Zambia joined the exclusive list that previously included Djibouti, Togo and Rwanda. That list as of December 2023 now includes Angola, Gambia, Congo, Madagascar, Mali and Mauritania. This means more opportunities for Africans to export value-added products to China.

The headache now is the easy facilitation of finished products from Africa to China. This is where African businesses can take advantage by providing trade and logistic solutions that enable the smooth exportation of finished African goods to China. Investment in cold chain infrastructure, digital trade platforms and streamlined custom clearance systems will drastically improve the flow of African finished products to China. The good news is that this investment is a two-way benefit; serving trade flow to and from China in Africa.

Education and Language Service

You might just have asked yourself what is there to invest in this, are Chinese students interested in schooling Africa? There is much to gain from this probably off-the-norm investment. For trade between Africa to boom, language is very much needed and that can be acquired through education. While it may be easier to get an interpreter and possibly cost-effective considering that one may not require interpreters permanently, the long-term benefits of learning the language cannot be understated.

African entrepreneurs can venture into establishing business-focused language and culture training centres in China to enable African business people to venture into the Chinese market transition smoothly. Imagine an African investor approaching his Chinese counterpart and deciding to transact business with him while communicating at least part in Chinese, the bond will be easier to establish and partnerships easier to start. Aside from training African entrepreneurs going to the Chinese market, these training centres could also train Chinese venturing into the African market. These training institutions could be hosted physically or online and could be purely African or in partnership with Chinese. It is a lucrative venture that will pay good returns.

Agribusiness and food processing

Agriculture has emerged as the new focus of Beijing in Africa. China currently imports various food products including avocados, sesame seeds, chilli pepper and cashews from Africa. China imported about 90 per cent of sesame seeds from seven African countries including Nigeria, Ethiopia and Niger. According to Yahoo Finance, China imported over 40,000 tonnes of food products from Africa worth over US$100 million within the first two months of 2023. Imagine that number remains steady throughout the year, China would have brought in at least US$600 million worth of food products from Africa.

This does not only present an opportunity for Africans to directly make China one of its major food export destinations, but it is also an avenue to create millions of jobs back home in Africa. Africa’s agricultural potential is underutilized and even amid climate change devastation, the continent can stand out and be the one feeding a larger part of the Chinese population. The increased number of African countries under the zero-tariff policy and the potential of more joining soon make the Chinese doors wide open for Africans to enter now than there have been in any period before now.

NB: This is a two-part series which we are bringing you to in the last week of December 2024. After reading this, please share your feedback with us and look out for the final part before the month runs out.

We committed this month largely to climate change efforts and have quality articles including a video interview on the subject matter available also on this website. Do well to also subscribe to our newsletter for exclusive content delivered right to your inbox.

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