China’s CDB seals Nigerian deal. Chinese banks are seeking local operators to channel billions of dollars into African projects,
These development don't augur well to the IMF and world bank TJ.
China’s CDB seals Nigerian deal.
By Matthew Green in Lagos and Jamil Anderlini in Beijing
Published: October 30 2007 22:01 | Last updated: October 30 2007 22:01
China’s drive into Africa’s financial services sector has taken a fresh turn, with China Development Bank entering a partnership with United Bank for Africa, one of Nigeria’s biggest lenders.
The deal, sealed last month but not yet officially announced, expands the Chinese bank’s ability to finance infrastructure projects in Africa.
CDB has not bought equity in UBA, which is listed on the Nigerian stock exchange, though the deal will help it expand in Africa.
The two deals mark the start of a transformation in Africa’s banking industry, opening fresh channels for Chinese finance in a region which has previously been largely dependent on western companies and donors.
Chinese banks are seeking local operators to channel billions of dollars into African projects, in part to secure the oil and minerals needed to fuel China’s fast-growing economy.
CDB, which provides much of the financial muscle for infrastructure developments in China, refused to comment on Tuesday. Tony Elumelu, UBA’s chief executive, told the Financial Times: “It provides us [with] an almost infinite amount of capital to execute projects.” He added: “They will invest in any credit that we recommend.”
By the CDB agreement, a copy of which has been seen by the Financial Times, Chinese staff from the bank will work with their counterparts at UBA’s headquarters in Lagos to fund projects in West Africa.
Mr Elumelu said he hoped by the end of March to strike an agreement with CDB to finance a power project that would help to tackle Nigeria’s chronic electricity shortages.
UBA, with a balance sheet of about $8bn, hopes to expand into as many as 12 African countries next year.
“It is no longer a question of funding capability, but about our ability to identify good projects,” Mr Elumelu said. “Africa is a huge untapped market – but it takes those who understand African markets and African risks to take advantage.”
CDB has more assets than the World Bank and Asian Development Bank combined, with $281bn of loans outstanding by the end of June. |
