China featured prominently in the Panama Papers, a leak of 11 million documents from a Panamanian law firm with information about more than 214,000 offshore companies owned by individuals from across the world. China was the law firm’s biggest market, providing nearly a third of the business of Mossack Fonseca. These clients include eight members of China’s Communist party elite, among them the brother-in-law of China’s president, Xi Jinping. Unsurprisingly, China’s internet regulator ordered news organisations not to run stories about the leaks, and banned all mention of the papers from Chinese sites.
Several African politicians or their relatives feature in the leaks: this website is a handy way of exploring the biggest names and how they are connected to the Mossack Fonseca.
Nigeria’s president visits China. Muhammadu Buhari is visiting China for the first time since he became president a year ago. Nigerian government officials say he will sign funding commitments worth $2 billion while in Beijing.
Meanwhile, Nigeria is looking at issuing a renminbi-denominated bond in China. The West African country has a budget deficit of $11 billion, and it is hoped the bond will help alleviate the deficit. “The opportunity now, with the renminbi being a reserve currency, we are looking obviously at the lowest cost of funds to fund our budget deficit. Initially we were looking simply at the eurobond but then we began to explore opportunities in the renminbi market so there is a possibility of issuing a panda bond,” Finance Minister, Kemi Adeosun told the Financial Times and Reuters in an interview.
Africa’s rail renaissance. A standard-gauge railway line currently under construction in Kenya could link Mombasa – on the East African coast – to Uganda, Rwanda, and South Sudan; China is both financing and constructing the track. Meanwhile, South Africa’s Bollore plans to develop a 2,700 kilometre track linking Ivory Coast, Burkina Faso, Niger and Benin. And, Senegal signed a deal with a Chinese firm last December to renovate 645 kilometres of railroads. “Projects are also planned in Tanzania, Mali and Egypt, while Ethiopia recently completed a line connecting Addis Ababa to Djibouti and has another 4,000 kilometres of projects planned.” These lines are long enough to connect Cape Town not to Cairo, but to Copenhagen.
BRICS bank to issue first bond. The New Development Bank “will soon issue between 3 billion yuan and 4 billion yuan in bonds in China, according to the lender’s vice-president and chief financial officer Leslie Maasdorp.” The bonds will “mostly be related to “green energy and clean energy””.
Ethiopia looks to China to exploits its bamboo. CNN called bamboo the new “green gold” of Ethiopia, which grows two-thirds of Africa’s bamboo. It can be used to make toothpicks, flooring, and curtains. The global hub of the bamboo trade is China, a country which already has extensive trade ties with Ethiopia, and it’s lending its expertise and selling equipment to Ethiopian firms in the trade.
China loves Sierra Leone’s sea cucumbers. The marine animal is popular in China, where it is “prized as a delicacy, a traditional medicine reputedly capable of curing joint pain and fatigue, and a natural aphrodisiac.” Six years ago, Chinese traders discovered that there were vast quantities of the animal off the coast of Sierra Leone, turning it into a lucrative catch for locals. And although some have benefited from selling it to Chinese buyers, a good number believe they should have benefited more given the profits the Chinese merchants make from the trade.
South Africa is hoping for more Chinese tourists. An unfortunate and short-sighted law that came into effect was blamed for a fall in tourist numbers, especially those from China. The law has since been scrapped, and South Africa is working hard at drawing back the visitors it had put off. South Africa’s Minister of Tourism, Derek Hanekom was in China recently on a three-day working visit, and met Chinese tour operators who told him they welcome “the new visa application process and all the steps taken by South Africa to make it easier to travel to our country.”
Zimbabwe’s indigenisation law is not going down well with foreign investors. A law that went into effect recently requires all foreign-owned firms to ensure that they have majority black Zimbabwean ownership. However, Chinese firms – and the Chinese government – are pointing at a pact signed in 1996 that “provides that the investment on each other’s territories cannot be nationalized, confiscated, or be affected by any measure that has the similar effect as nationalization.” The Zimbabwe government recently closed two Chinese-owned firms operating in the Marange diamond fields for not adhering to the new law.
How did Djibouti become so attractive to foreign powers? The small East African country hosts French and American military bases, while Germany, Italy, Japan, and Spain have launched military operations from facilities in the country. China is also constructing its first overseas base in the country. Bloomberg looks at how a “forgotten sandlot of a country became a hub of international power games.”
Uganda’s Karuma and Isimba hydropower projects could be suspended for shoddy work. President Yoweri Museveni asked the Energy Minister to review the work on the dams and its supervision. This follows a complaint by the Uganda Electricity Generation Company Limited to the president that Energy ministry officials were ignoring shoddy work on the projects after taking bribes. The 600-megawatt Karuma dam and 183-megawatt dam at Isimba are being constructed by Chinese firms.
Africa’s petro-states are suffering, while the more diversified East Africa is thriving. Last year’s fall in global oil prices had depressed growth in countries like Nigeria and Angola, which depend on crude oil exports, and also introduced a raft of problems. The more diversified African economies – most of them in the East – however face good prospects, and look set to become “the center of economic power on the continent.”