Chinese investment in Africa has fallen by as much as 84 percent in the first half of this year to $568 million compared to the same period last year when it invested more than $3.54 billion in Greenfield projects and other existing projects on the continent, the Financial Times reported.
China’s investment in Africa has been hurt by an economic slowdown in the Asian giant, which many believe could turn into a full blown economic crisis if not handled well.
The six-month investment data in Africa indicate that despite a reduction in flows into the continent, China has nearly doubled its interest in raw material. Investment in extractive industries including oil, gas, coal and other metals rose to $289 million from $141 million the same time last year.
Over the last decade, China has grown to become one of the top trade partners with a number of sub-Saharan Africa countries with it helping governments on the continent accelerate their infrastructure growth while it gained access to the continents vast natural resources.
In 2013 there was more than $170 billion in trade between China and sub-Saharan Africa, compared to less than $10 billion in 2002, Value Walk reported.
Chinese investments on the continent has at some times been controversial, but has played a major role in regional growth.
A slowdown in the Asian nation’s economy, coupled with other global headwinds such as low commodities prices has seen many African countries struggle to keep their much required revenue flowing.
Data collected by FT’s This is Africa and fDi Intelligence, which greenfields and expansion of existing projects, showed that Africa attracted foreign direct investment (FDI) flows totaling $87 billion in 2014 — a 64 percent jump from what it got in 2016.
But Africa is not the only region witnessing a slowdown in FDI in 2015.
“FDI has dipped across the board from emerging markets into other emerging markets, and into Africa in particular,” says Vera Songwe, the IFC’s director for West and Central Africa.