China Belt plan good for investors, study shows

Madaraka Express train in this picture taken on October 16, 2017. The train is expected to spur growth in the country and region. PHOTO | KEVIN ODIT | NATION MEDIA GROUP

What you need to know:

  • Other countries are Tanzania, Ethiopia, Djibouti and Egypt.
  • Report notes that the telecommunications industry is expected to develop in Africa.

Kenya is among African countries along China’s Belt and Road Initiative that have the potential to provide significant opportunities for investment, a new report shows.

The report, Belt and road: Opportunities and Risk. The prospects and perils of building China’s new Silk Road, was released Wednesday by Baker McKenzie and Silk Road Associates.

Other countries are Tanzania, Ethiopia, Djibouti and Egypt.

The report states that multinationals from all countries can expect to find opportunities in the maritime road regions in the coming decades, irrespective of the success of BRI.

ENERGY

“A big attraction of the initiative for governments and project sponsors is that it assists the speed of implementation. Project stakeholders advise that the whole process is quicker than other options,” said the Head of the Energy, Mining and Infrastructure Practice at Baker McKenzie in Johannesburg, Kieran Whyte.

The report outlines East Africa’s integral role in the BRI, owing to Djibouti’s ports, Ethiopia’s manufacturing and the region’s plans to connect rail, road and energy networks.

It also details how key opportunities in Africa with regard to BRI would be transactions related to projects in the power and infrastructure industries and related financing.

China’s construction of power plants and transmission lines in East Africa is expected to be a game changer for local industries.

UGANDA

BRI projects in East Africa include the new railway between Mombasa and Nairobi and the 600MW Karuma hydroelectric power station under construction in Uganda.

“Port connectivity is expected to improve significantly in five years, thanks to BRI,” he said.

Chinese Government data indicate that 50 state owned enterprises have already invested or participated in nearly 1,700 projects in Belt and Road countries since the scheme was launched three years ago. “This number is expected to grow significantly in five years,” Mr Whyte said.

The report notes that the telecommunications industry is expected to develop in Africa as China’s smartphone and household electronics brand owners begin to expand into the region.