China and the United States, the world's two biggest economies, are among the top 10 foreign investors in Africa, and their investment on the continent "does not conflict," but "is complementary" in many cases, a veteran expert told Xinhua in a recent interview.
James Newlands, a leading expert with more than 33 years of experience in the field of Africa investment, made the remarks on the launch of an annual report on Africa's attractiveness survey, the fifth one in a row to be released on Monday by EY, a global leader in assurance, tax, transaction and advisory services.
His statement helps rebuke the so-called "new colonialism" allegation that China has exploited Africa's resources, given that China has made great efforts to help the continent's development and benefit its people. Over the past decades, China has maintained a practice of attaching no political strings in assisting and investing in Africa.
Newlands, a South African national who was responsible for leading the execution of EY's Africa Investment Plan over the past four years, said that China and the United States are among the top 10 countries with most foreign direct investment (FDI) in Africa in terms of the number of FDI projects, capital value and jobs created.
"If we look at those two countries, and we look at three measures, we look at the number of FDI projects, we look at the capital value and we look at the jobs created," he said. "So it's important to look at all the three."
China enjoys a better ranking respectively in terms of capital value and jobs created, he noted.
In terms of the number of FDI projects, "the U.S. is the number one investor from any country in the world, about 13.8 percent of the FDI projects are from the U.S.," Newlands said.
NOT CONFLICTING, BUT COMPLEMENTARY
On the investment in Africa from both China and the United States, Newlands said, "I don't think it conflicts."
"If you look at the needs Africa has or the unmet needs of the population, there's more than enough opportunity for all investors, " he said. "I don't see a great competition, to say, well, these opportunities will be taken and not available. There's more than enough opportunity, so frankly I see it as complementary in many cases."
There is a similarity in the Chinese and American investment, said Newlands, adding he sees technology, media and telecommunications, or TMT, as "the leading sector for both of them."
Another similarity is that South Africa is "still the leading destination for both of those countries."
On the differences, he said, "What we see is that consumer products are an important sector but probably more so for U.S. companies."
"We see perhaps more Chinese investment in mining, the automotive sector," he said. "More U.S. investment in things like financial services and business services. That's where the main difference from a sector perspective happens."
There is a new story on the driving force behind foreign investment in Africa, whose traditional investment attractiveness is about what Newlands said resources, mining, coal, oil and gas.
"But I think increasingly we're seeing the story that's driving a lot of investment in Africa from both China and the U.S., it's the same factors driving that investment -- the large population, the increasing disposable income of that population, urbanization and a young population."
"So it's a market for consumer goods and other things that consumers need," he said. "So a lot of technology, media, telecommunications; those are the sectors that are attracting a lot of interest, particularly from both China and the U.S."
The Chinese and American investment is needed by Africa and is also in the interest of African countries as a whole, said Newlands, who works with key EY accounts in the Americas, across a range of sectors, to assist them in developing, stress-testing and executing their Africa growth strategies.
Newlands spelt out five priorities for both African governments and foreign investors to boost healthy economic growth on the continent. These priorities are shared value, partnerships, infrastructure, regional integration and entrepreneurship, he said.
"We spelt out what we see as five priorities for Africa that governments and investors need to embrace if Africa's really to grow, continue to grow, and grow in a sustainable and an inclusive way," he said. "Now in each of those five aspects, I think there's a role to play for government and there's a role to play for investors, and those would be the things that I would say Africa is looking for from investors like the U.S. and China."