Ladies and Gentlemen

Allow me first and foremost to express my gratitude to the organizers of the event, for inviting the Common Market for Eastern and Southern Africa (COMESA) to attend this event and for the warmest and friendly welcome granted to the delegation I lead.

Allow me as well to thank the Government of the People’s Republic of China and the Chinese people for it continued support to Africa continent.

China and Africa have a long history of friendship.  It’s no secret to anyone that Chinese and Africans share the same principles and views in the areas of international politics, global economics and indeed in investment and trade development.  As a result of which, China and Africa have always wanted to develop strategic partnerships either at bilateral, regional or continental levels.

A new cooperation framework has been started as far as 2000 with the first China Africa Forum.  The last Forum of a kind was held in Beijing in November 2006 and has given a new stimulus to both political and economic cooperation as enshrined in the Beijing Action Plan for 2007-2009.  We are thankful to China for having immediately operationalize the Action Plan by the granting of duty-free and quota free access to 43 countries for some 440 commodities with a potential for value addition.

Early this year, His Excellency President Hu Jintao visited 8 African States, of which 5 states are in Eastern and Southern Africa hemisphere (Sudan, Zambia, Seychelles, Namibia, Mozambique, South Africa).  This presidential tour has positive impacts and has improved significantly the visibility on the nature and future of China and Africa cooperation.  These are good news for our people and we must be thankful to our leaders.

Ladies and Gentlemen:

My delegation came to Xianmen to share information with the distinguished participants.  So allow me to highlight some of the most salient points about COMESA.

COMESA is a regional economic community with 19 states in Eastern and Southern Africa which have agreed to promote regional integration through trade development, investment promotion, infrastructure development, and to cooperate for the mutual benefit of all their peoples.

The objective of COMESA’s regional integration agenda is mainly to create a larger regional market, reduce costs of doing business in the region by removing supply-chain constraints and encourage investment in COMESA.  In this regard, the heads of state of COMESA have just adopted in May 2007, a regional investment agreement aimed to build a Common Investment Area with the following objectives:

(a)   substantially increase the free flow of investments into COMESA from both COMESA and non-COMESA sources;

(b)   jointly promote COMESA as an attractive investment area;

(c)   strengthen and increase the competitiveness of COMESA's economic activities;

(d)   gradually eliminate investment restrictions and conditions which may impede investment flows and the operation of investment projects in COMESA.

COMESA is one of the 8 RECs that are recognized by the African Union as the building blocks of the future African Economic Community.  The momentum reached in the Beijing Action Plan is of highest importance to us.  Hence, the 2007-2009 Action Plan has given a special place for cooperation between China and sub regional organizations in the context of NEPAD.

COMESA is also known as a market oriented organization.  This is due to the work that we have done and the commitments of our leaders and our people to continue developing free and fair trade and promoting investment among neighboring economies in view of taking advantage of a future single market in this part of Africa. 

COMESA’s member states have also adopted a Common External Tariff which will lead to a Customs Union with harmonized rules throughout Eastern and Southern Africa.  The Common External Tariff is an important tool to level up the playing field.  It is a important step towards the Common market which we ultimately intend to establish by 2014.

Ladies and Gentlemen,

We all know that China is a major trader worldwide.  China’s trade with Africa has reached a total of US$ 56 billion in 2006 and is expected to double by 2010.  Our region is getting its share from the booming import and export. 

China is also a major source of foreign direct investment.  Chinese’s investments in Africa are increasing every year but still represent about 3% of total FDI stock in Africa.  Most Chinese investments are directed to Asia for about 53% and America for 37%. Chinese firms are essentially eyeing the energy and mining sectors, but also in infrastructures, including telecommunications.  However, we know the huge capacity of China to invest in other sectors in Africa.  Agriculture and light industries are among the most prominent sectors which Chinese firms can invest.  Looking at the huge foreign reserve that your China’s Central Bank has recorded over the last 10 years, and in view of the rich potential of Africa and also of the political will of our leaders, there is no doubt that new investments in agriculture and manufacturing sectors can be promoted.

COMESA is proposing to the Chinese government to conclude a long term cooperation agreement to promote investment and trade in Eastern and Southern Africa.  What we are proposing is to encourage business partnerships between Chinese and African entrepreneurs to take advantage of the availability of the US$ 5 billion through the China Africa Development Fund.  This is where the Eastern and Southern African Development Bank comes in.  This Bank was created by COMESA to channel funds to the private sector.  China is a shareholder of this Bank.  It is therefore possible to bridge the China Africa Fund and the COMESA Bank.

There are already many success stories of Chinese investments throughout Eastern and Southern Africa.  Let me simply echo some of the most recent investments initiated by Chinese firms in various Eastern and Southern African countries.

construction of rural housing and social amenities in Zimbabwe

Construction by the Chinese Tianli Group of a US$ 500 million over a five-year project of a mega business park in Mauritius that would include light industrial, medicinal production, textiles and manufacturing of electrical goods;

Building of a five stars hotel and conference center in Madagascar;

creation of a multi-facility Economic Zone in Chambisi,  Copperbelt, Zambia with an initial investment of US$ 800 to 900 million;

In Egypt, purchase of Devon Energy Corp. assets by Sinochem Corp, the largest Chinese oil trader with oil and natural gas reserves worldwide;

In Sudan, China Railway Engineering Group wins the US$ 1.15 Billion, railways construction of 762 Km linking Khartoum and Port Sudan in the east of the country;

In DR Congo, China’s Covec (China Overseas Engineering Corporation) is to invest in two copper and cobalt mining projects in the country with and an estimate of US$ 300 million and a production of 20,000 tons of copper, 1500 tons of cobalt annually by 2009;

Still in DR Congo, China has won the bid for 63 mines which will be exploited along with the rehabilitation of roads for about US$ 9 billion over 10 years;

In Mozambique, China is also funding the construction of US$ 300 million hydroelectric dam in Moamba that would allow supply of electricity and drinking water to Maputo.

In view of these massive investments into our region, most of which create thousand of jobs, bring new technologies, and indeed improve infrastructures, we are optimistic about the future.  These investments contribute to economic development and we can assure you that, as policy makers, we will continue to improve the business environment at national as well as at regional levels.   

In parallel with the infrastructure investments, Africa also needs to invest in its human capital.  Our hope is that the existing cooperation with China and Africa will pave the way to more cooperation to also address human development issues.  Investments in physical assets and trading of commodities whilst welcome needs to be completed by investments in manufacturing industries so that the COMESA region can integrate into the world economy on the basis of industrialization and commodification which has kept Africa at the bottom of the ladder in terms of social and economic transformation and development. 

Ladies and Gentlemen:

The increasing investments and trade between China into Africa are reassuring and are definitely transforming Africa’s economy.  We are indeed aware of the apprehension among the business community about the current trend with the China’s surge into our economies.  Our views are that foreign investments are good as long as they create jobs, improve our infrastructures, open up new market opportunities for small businesses.  

China today is an economic power house. The members of the G8 recognize the crucial role of China and India in the process of assisting Africa in its development. Suffice to say that China can also offer reliable financial and capital alternatives to many African countries, particularly the least developed ones, through soft loans and grants.  And this is what matters to our people.  Be assured that COMESA is committed to work with China and to facilitate fair trade and promote investment with China.

What we see today in Africa with the pouring of investments from China could radically transform our economies.  It is our responsibility to make sure that the on-going “soft revolution” is for the good of our people and that it is sustainable. 

Ladies and Gentlemen:

We came to this dynamic city of Xiamen to participate in this international fair for investment and share our views.  We believe in your faculty to assess the improving investment climate in our region.  It is already well known that Africa has the highest rate of return on investment in the world.  Investors make money in Africa and get profits out of the existing business environment.  Many countries have already liberalized and/or deregulated their capital movements and banking sectors. 

Now is the time to come to Africa.

COMESA is optimistic about the future of the cooperation between China and Africa.  We believe in your capacity to anticipate the future and to seize the opportunities.  We all know that whenever there is a will, there is hope.

Ladies and Gentlemen,

Let me conclude by sharing the following information with you.  China is a shareholder of ESA Development Bank based in Nairobi (www.ptabank.org).  On the other hand, SINOSURE, the Chinese commercial risk agency, has also entered into an agreement with another COMESA’s institution specialized in covering political as well as commercial risks, known as ATI (www.ati-aca.org). ATI is the first and only specialized agency that offers insurance products to foreign investments.  ATI, with a credit rating of 3A, is managing MIGA funding for Africa. This is a good opportunity for you to note.  This is why, now is the time to invest in Africa and mostly in Eastern and Southern Africa. 

My final word is to renew our gratitude to the organizers of the event and to the Government of China and to thank you for your attention.