We have said previously that Africa is the new land of opportunity for speculators and investors. Although there is no shortage of risks, the continent is home to vast amounts of resource wealth, the fastest growing class of millionaires, and even the world’s fastest growing city.
The Chinese must agree that there is great opportunity to be found on the second largest continent. That’s why over the last decade, China has increasingly poured billions of dollars of foreign direct investment capital into Africa.
China has now invested in 46 of 54 African countries, mainly with a focus on metals, energy, and infrastructure. So far, 2013 has been the peak of Chinese investment, with the equivalent of $44 billion spent.
Investments in 2015 up until June have totaled $17.8 billion, and are on pace to reach $42 billion by the end of this year. In fact, just last week, South Africa hosted Chinese President Xi Jinping in Johannesburg for the Forum on China-Africa Cooperation (FOCAC). During the conference, the Chinese President announced the budget for African cooperation would be tripled to a $60 billion package.
This includes $5 billion of aid and interest-free loans, $35 billion of preferential loans and export credit, and $20 billion of capital to be divided between three Africa-focused funds.