Ethiopia Says It Attracted $13 Billion in Mostly Chinese Investment

Ethiopia's Institute of Foreign Affairs posted on 30 March 2026 an article titled "Ethiopia's Investment Surge and the Strategic Repositioning of Addis Ababa as Africa's Diplomatic-Economic Nexus" by Kena Seyife.  

The "Invest in Ethiopia 2026 Forum" attracted over 800 investors from more than 50 countries and secured over $13 billion in investment commitments.  China's Ming Yang Smart Energy Group Ltd. committed to invest $10 billion in green ammonia and electrical equipment.  The article cautions that Ethiopia's success will depend on its ability to translate investments into tangible economic transformation. 

Comment: Ethiopia is facing several internal security challenges that must be addressed before this kind of investment actually materializes.  It will be important to monitor how many of these commitments valued at $13 billion result in completed projects.    

China-Ghana Relations from an Indian Perspective

 The Atlantic Council published on 16 December 2022 a study titled "Global China in Africa: Documenting Indian Perspectives from Ghana" by Veda Vaidyanathan and Arhin Acheampong.

The study looks first at China in Africa and India in Africa before comparing the economic engagement of the two countries in Ghana.  

China's Belt and Road Initiative: Is Africa's Role Any Clearer?

The China Africa Research Initiative at Johns Hopkins School of Advanced International Studies (SAIS) has just published a policy brief titled "Silk Road to the Sahel: African Ambitions in China's Belt and Road Initiative" by Yunnan Chen, PhD candidate at SAIS.

The author argues that the BRI signifies a shift in China's economic engagement with Africa, away from the resource trade that characterized the boom of the 2000s, towards a greater emphasis on infrastructure, industrial cooperation and connectivity. East and North Africa have been the focus of the BRI in Africa, though countries in West and Southern Africa have also signed cooperation agreements. The rapid expansion of debt-financed infrastructure projects raises economic risks.

In my view, it is not yet clear that China is moving away from the resource trade with Africa and focusing on infrastructure development. China has been doing both of these throughout the 21st century and continues both emphases. There has been a greater, but still modest, effort to support African industry. The steady buildup of debt-financed infrastructure projects is also beginning to raise questions about debt repayment ability in some African countries. With each new BRI announcement, it seems that it is becoming a global initiative well beyond the traditional Silk Road and Maritime Silk Road. At some point, it will lose its meaning if it has not already done so.

Africa and China: Industrialization, Agricultural Reform or Export of Natural Resources?

The Washington Post Monkey Cage published on 24 July 2018 an article titled "Xi Jinping Is Visiting Africa This Week. Here's Why China Is Such a Popular Development Partner" by Deborah Brautigam, Johns Hopkins University School of Advanced International Studies.

Commenting on Xi Jinping's recent visit to Rwanda, Senegal, and Mauritius, the author explains that China is gaining popularity in Africa by supporting industrialization, which is the top priority of many African leaders.

The East African published on 1 August 2018 an interview with Holger A. Kray, agricultural economist at the World Bank, titled "Is East African Agriculture at Risk of Playing Second Fiddle to Oil Wealth?"

While the interview does not deal with China or industrialization, it makes the point that in several East African countries the economic policy focus should be on commercialization of agriculture rather than a reliance on the export of oil. The key challenge for Kenya, Uganda and South Sudan, says Kray, is how to support the agricultural sector to take advantage of the shift in consumer behavior and consumer demand globally towards higher quality agricultural products.

My point is that there is no single prescription for economic success in Africa's 54 countries. Some combination of industrialization, agricultural reform, resource extraction, and enhancement of the service sector is required. My concern is that the current emphasis by many African leaders, supported by China, to focus on industrialization will have disappointing results. A small number of African countries may be ready to shift significantly into industrialization; most are not. Most would be well advised at this stage of development to focus their energy on the improvement of agriculture, including policy reform.

Pseudo Special Economic Zones along the Silk Road (in French)

Thierry Pairault posted on 1 August 2018 a working paper titled "De pseudo-ZES le long des nouvelles routes de la soie: les zones de cooperation economique et commerciale a l'etranger."

A number of studies have concluded that Special Economic Zones (SEZs) inspired by China are the solution to Africa's development. This study asks if the model of Overseas Economic and Trade Cooperation Zones (OETCZ) that China proposes for countries along the Silk Road corresponds well with existing SEZs. The paper raises doubts.

China's Foreign Direct Investment in Africa is Modest and Declining

Bridges Africa published on 5 July 2018 an analysis titled "China in Africa: Goods Supplier, Service Provider Rather than Investor" by Thierry Pairault, research director at France's Centre National de la Recherche Scientifique.

Although is it difficult to track China's foreign direct investment because some of it goes through tax havens and is not accounted for, Ministry of Commerce statistics demonstrate that Chinese investment in Africa is modest and falling. FDI flows to Africa in 2016 totaled $2.4 billion, a decrease of 19 percent compared to 2015 ($2.9 billion), which was a decline of 7 percent compared to 2014 ($3.2 billion).

The author concludes that China is primarily a service provider (builder of infrastructure based on loans from a variety of sources and a major source of imports). Africa is more a customer than a partner. China rarely invests in infrastructure in Africa, but builds and finances African investments in infrastructure. This is a critical distinction that is poorly understood by some who write about China-Africa relations.

China, Africa and Industrial Parks (in French)

Thierry Pairault recently posted an analysis titled "La Chine en Afrique et la question des parc industriels" that draws on research in Chinese by Chinese authors.

The study describes five different types of industrial parks, the different ways they operate, and the challenges they face.

China's Outward Direct Investment in Africa

The international law firm White & Case published on 7 February 2018 a background piece titled "Belt and Road in Africa."

It is a useful discussion of China's outward direct investment in Africa. It puts China's investment stock in Africa at the end of 2015 at $35 billion, which probably understates the actual number. According to White & Case, China has the fourth largest amount of investment stock in Africa after the United States, United Kingdom, and France. Recent flows from China to Africa, however, are growing faster than flows from the United States.

Deciphering Chinese Investment in Nigeria

China-Africa Focus published on 6 October 2017 my brief analysis titled "Deciphering Chinese Investment in Nigeria."

Reporting on Chinese foreign direct investment (FDI) in Nigeria (and elsewhere) often intermingles the winning of contracts with FDI, giving the impression of more investment than is actually the case. While China is an important source of FDI in Nigeria, it is not as significant as often reported. According to U.S. State Department Office of Investment Affairs' estimates, Chinese companies have provided only about 6 percent of Nigeria's FDI stock, which is slightly ahead of companies from the United States but well behind those in the UK, Netherlands, and France.

Chinese Investors in Ethiopia

Two think tanks, Moroccan-based OCP Policy Center, and French-based IFRI, published in March 2017 a study titled "Chinese Investors in Ethiopia: The Perfect Match?" by Francoise Nicolas, director of IFRI's Center for Asian Studies.

The author concluded the impact of Chinese investment in Ethiopia is mixed. Although China has played a useful role by setting up industrial zones, financing infrastructure, and encouraging Chinese firms to move some manufacturing production to Ethiopia, its transformative power remains limited. Skill transfer has been disappointing and local labor inputs do not always reach the standard expected by the Chinese companies.

China, Zambia and Resource Nationalism

The East Asia Forum published on 31 March 2017 an analysis titled "China and Zambia's Resource Nationalism" by Celine Wang, Public Policy Centre in Kazakhstan.

The author argues that the failure of Zambia's industrial development to deliver greater benefits for the Zambian people has resulted in resource nationalism and anti-Chinese sentiments.

Chinese Development Lessons for Namibia

The Strategic Review for Southern Africa published in November 2016 an article titled "Deng Xiaoping and the Chinese Developmental State: Lessons for Namibia" by Job Shipululo Amupanda, University of Namibia.

The article provides a descriptive account of the Chinese developmental state and draws possible lessons for Namibia to emulate.

Comparative Study on Special Economic Zones in Africa and China

The UN Development Program published on 17 December 2015 a major report titled "If Africa Builds Nests, Will the Birds Come? Comparative Study on Special Economic Zones (SEZs) in Africa and China."

The study seeks to answer three questions: How have Africa and China performed so far with SEZs?  How could Africa benefit from China's experience with SEZs?  How could China-Africa cooperation on SEZs be enhanced in the future.  The report considers SEZs in Ethiopia, Nigeria, Zambia, Shenzhen, and Suzhou. 

The report is also available in Chinese. 

China, Africa, and Industrial Parks

NexGenForum.org recently posted a summary of conference proceedings held 16-18 December 2015 at Tsinghua University in Beijing titled "Industrial Parks and Globalization: Experience Sharing between China and Africa."  It discusses the applicability of China's special economic zones for Africa. 

What Can Africa Learn from China?

The South African Institute of International Affairs published in November 2015 a paper titled "Learning by Doing: China-Africa Co-operation and State Learning" by Luke Simon Jordan, who runs a non-profit technology start-up in South Africa.

The paper argues that for Africa to adopt blindly Chinese policies, like the development of special industrial zones, is the equivalent of importing finished goods, rather than developing the skills for production.  It is not the static outcomes of Chinese policies that African countries should study, but the processes and institutions by which China devises, adapts, and evolves those policies. 

China's Special Economic Zone in Mauritius: A Cautionary Tale

The China Africa Project put online on 14 August 2015 a 23-minute podcast titled "China's Special Economic Zones in Africa: Lots of Hype, Little Hope" with James Wan, editor of the Royal African Society's editorial site African Arguments.  The title is something of a misnomer as the interview is confined to the problems experienced by the special economic zone in Mauritius.  Wan attributes the problems in Mauritius to the poor timing of the project just ahead of the Western economic crisis in 2007-2009 and the selection of Chinese companies to run the zone that were inexperienced in Africa.  Wan concluded that it may be necessary to reconfigure the zone before it can become successful.  

Investing in Africa Forum

Finchannel.com published on 2 July 2015 a summary of the Investing in Africa Forum that took place in Addis Ababa, Ethiopia from 30 June - 1 July 2015.  It was organized by the government of Ethiopia, China Development Bank, the China-Africa Development Fund, the World Bank Group, and the United Nations Industrial Development Organization (UNIDO). 

According to this report, the entire focus seemed to be on the China-Africa relationship and how African countries could benefit from China's experience.  Even though the World Bank and UNIDO were co-organizers, countries in the rest of the world did not appear to have any useful lessons to offer Africa.

China and Africa: Expanding Economic Ties

The World Bank published in March 2015 a report titled "China and Africa: Expanding Economic Ties in an Evolving Global Context" by Miria Pigato and Wenxia Tang.  It was prepared for the Investing in Africa Forum held in Addis Ababa on 30 June - 1 July 2015.  The report explores the impacts of China's economic rebalancing on its trade and investment partners in Sub-Saharan Africa.  It contains excellent up-to-date data on foreign direct investment in Africa from China and other countries around the world. 

China-Africa: Implications for US National Security

The Arroyo Center at the Rand Corporation in Santa Monica, California, just published a book by Lloyd Thrall titled "China's Expanding African Relations: Implications for U.S. National Security."  It is available online free of charge. 

It explores China's rapidly expanding involvement in Africa in order to better inform U.S. thinking about its relations both with China and with African countries.  The study pays particular attention to geostrategic competition in Africa, potential security threats driving Chinese engagement with African states and assesses potential medium-term changes in Sino-African relations across these three dimensions.  It then assesses how China's interests and behavior on the continent affect the interests of the United States.  The report recommends that the United States view China's sometimes unfavorable activities in Africa in context and continue to seek opportunities to engage Beijing on mutual interests, such as defeating violent extremists, improving African infrastructure to promote trade and development, and encouraging economic and political stability on the continent.

Chinese Special Economic Zones and Africa

The World Institute for Development Economics Research published in November 2014 a paper titled "It Worked in China, So Why Not in Africa? The Political Economy Challenge of Special Economic Zones" by Thomas Farole, World Bank, and Lotta Moberg, George Mason University.

The authors conclude there is no blueprint for successful special economic zone policies and the majority of them fall well below expectations.  They argue this is largely due to flaws in the political economy of special economic zone schemes, which prevent replication of best practice in special economic zone development and management.