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China and US battle for influence in Angola
by Staff Writers
Luanda (AFP) May 07, 2014


China's Li vows closer ties with African powerhouse Nigeria
Abuja (AFP) May 07, 2014 - Chinese Premier Li Keqiang vowed on Wednesday to boost trade and investment with Nigeria, Africa's biggest economy and leading oil producer, as he met embattled President Goodluck Jonathan for talks.

Li inspected a ceremonial honour guard at the State House in the capital Abuja and received a 19-gun salute before the pair headed to the presidential villa for a closed-door meeting.

The Chinese premier is on a four-country tour of Africa, his first since taking office last year, with the world's second-biggest economy keen to boost its presence on the continent to find new markets and opportunities.

On Thursday, he was set to address the World Economic Forum on Africa in Abuja, which the government had hoped would showcase Nigeria's potential as a place to do business but has been overshadowed by security concerns.

Two car bombs that exploded in the same Abuja suburb have heightened fears about safety, while Jonathan's response to the mass kidnap by Boko Haram Islamists of more than 200 schoolgirls has been criticised as weak and ineffective.

After his meeting with Jonathan, Li said the aim of his visit was to deepen ties and cooperation with Nigeria, which has been seen as a potential economic powerhouse and destination for overseas investors.

"Nigeria is one of China's biggest trading partners in Africa. Last year, trade between our two countries reached about $13.6 billion," he said through a translator.

"We hope to see not just more trade with China but also stronger cooperation between the two countries in the development of infrastructure in Nigeria and we wish the Nigerian people even higher living standards and also greater achievement in terms of health and social progress."

Li's comments touched on a key issue that belies Nigeria's new-found status as Africa's leading economy: while it has created growing numbers of dollar millionaires and billionaires, most of its people still live in poverty.

Despite churning out some two million barrels of crude oil a day, the country struggles to produce enough electricity to keep the lights on and the country scores low on developmental indicators in areas such as health and education.

Chinese firms are already involved in road and rail projects, including a monorail scheme in the financal capital, Lagos, and Li promised more investment as well as offering more Chinese technical expertise.

"The Chinese government will honour its words," he told Jonathan.

Nigeria's foreign ministry has said that six major agreements would be signed during Li's visit, including economic and technical cooperation, aviation, banking and health projects to combat malaria.

Li noted that cooperation could also extend to "oppose and fight terrorism", with Nigeria in the grip of a raging insurgency in the north that has killed thousands.

Li flew to Nigeria from Ethiopia and is also scheduled to visit Angola and Kenya.

Africa's second biggest oil producer and one of its fastest growing economies, Angola is at the centre of a race for influence between China and the United States, both greedily eyeing its huge trade potential.

The competition is on full display this week, with Angola's capital Luanda welcoming Chinese Premier Li Keqiang on Thursday for a 48-hour visit, just three days after it laid out the red carpet for US Secretary of State John Kerry.

"The intention of (US President) Barack Obama, just like China, is to diversify trade with Angola to deepen cooperation with the country and, more generally, with Africa," said Vicente Pinto de Andrade, economics professor at the Angola Catholic University.

The Chinese premier is on a four-country tour of Africa, his first since taking office last year, with the world's second-biggest economy keen to boost its presence on the continent to find new markets and opportunities.

And for now, China has the upper hand in the competition in Angola. China buys nearly 40 percent of Angola's crude oil output, and Angola is its leading destination for investment in Africa.

Since the end of Angola's civil war in 2002, China has opened up a credit line worth $14.5 billion (10.4 billion euros) to Luanda, and trade had soared to $37.5 billion (30 billion euros) by 2012, according to figures from the Chinese embassy.

That has made possible a massive construction boom in Angola, including new airports, a football stadium for the African Cup it hosted in 2008 and hundreds of kilometres of roads, as well as entire new towns. More than 300,000 Chinese workers have poured into the country in the process.

"In the past, neither the Americans nor the Europeans wanted to help. Only the Chinese responded to our call and they did it with force," said Jose Carlos Gomes, president of the Railway Society in the town of Benguela, where 1.3 kilometres of track has been renovated by China's CR-20 construction group.

The partnership has attracted a fair amount of criticism in Angola, however.

The omnipresence of the Chinese has often been associated with a lack of transparency in contracts, poor quality work and white elephant construction projects, said several observers. The large number of Chinese workers has also meant there is little emphasis on training and employing locals.

The United States has sought to exploit these concerns, becoming the second-biggest commercial partner for Angola, overtaking the former colonial power of Portugal, and racing ahead of Brazil and South Africa.

Having stayed away from the country during its years of unrest, the US is now keen to present Angola as one of its leading partners on the African continent, not only in commerce but also in resolving the region's myriad conflicts.

- 'Remarkable growth' -

"Angola's economy has experienced, and continues to enjoy, a remarkable amount of economic growth," Kerry said during his visit this week. "We talked about increased possibilities of cooperation in agriculture, in technology, in energy diversity, and also in infrastructure."

These expanding areas of interest are vital if the US wants to maintain its levels of trade with Angola, whose oil has become less interesting to the United States since it started tapping its own shale gas reserves.

"What attracts the great powers is Africa's overall growth potential. They are trying to establish a strategy that will allow them to benefit from multiple African partners as they present themselves," said economist Vicente Pinto de Andrade.

"As for Angola, the government should ensure they deal with the maximum number of foreign players but also encourage domestic private firms. The state cannot be the only motor for investment in the country."

For Luanda, the battle between Beijing and Washington ensures that it does not become overly dependent on either one, while supporting its plans to diversify the economy away from just oil.

And with the economy expected to grow at five percent in 2014 and 2015 according to the International Monetary Fund, there are plenty more suitors eyeing opportunities in Angola, including India, Spain and several of its African neighbours.

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