US's Tillerson warns African nations not to 'forfeit their sovereignty' by taking Chinese loans
U.S. Secretary of State Rex Tillerson has warned against African nations accepting Chinese loans.African countries must "carefully consider" their agreements with China, he said during a visit to Ethiopia's capital Addis Ababa on Thursday."Amazing" demographics in Africa — and providing jobs for the continent's vast young population — is an area of opportunity, one Citigroup expert told CNBC.
Justina Crabtree | @jlacrabtree
Published 4 Hours AgoCNBC.
Jonathan Ernst | AFP | Getty Images
U.S. Secretary of State Rex Tillerson (L) receives a cup of brewed coffee during a traditional ceremony in Addis Ababa, Ethiopia, on March 8, 2018.
U.S. Secretary of State Rex Tillerson has warned against African nations accepting Chinese cash in agreements which could "forfeit their sovereignty."
"We are not in any way attempting to keep Chinese dollars from Africa," Tillerson said at a press conference in the Ethiopian capital of Addis Ababa on Thursday, as reported by Reuters.
"It is important that African countries carefully consider the terms of those agreements (with China) and not forfeit their sovereignty," he added.
Tillerson's trip is his first on behalf of the Trump administration, and will include stops at Djibouti, the tiny east African nation at which both the U.S. and China have a military bases, followed by Kenya, Chad and Nigeria.
Kenya, Ethiopia and Uganda were among the top 10 recipients of U.S. foreign aid in 2016, according to website How Much using data from the United States Agency for International Development.
But, in recent years China has increased its influence on the African continent. According to Reuters, China surpassed the U.S. as Africa's largest trade partner in 2009, and has supplied billions for infrastructure projects.
Ethiopia and Djibouti, for example, are key tenets of China's Belt and Road Initiative, a massive infrastructure spending plan aimed at resurrecting the ancient trading routes centered on China.
Tillerson visited the African Union headquarters in Addis Ababa Thursday, which had been built by China.
Minasse Wondimu Hailu | Anadolu Agency | Getty Images
U.S. Secretary of State Rex Tillerson (L) and Ethiopia's Minister of Foreign Affairs Workneh Gebeyehu hold a joint press conference following their meeting in Addis Ababa, Ethiopia, on March 08, 2018.
Chinese state news agency Xinhua has published articles which counter Tillerson's comments. The U.S. is "detached from reality," in its accusations of China-Africa collaboration, one expert on Ethiopia is quoted as saying.
"Africa's concerns are China's concerns. Africa's priorities are China's priorities," Chinese Foreign Minister Wang Yi said at the National People's Congress in Beijing on Thursday.
Africa opportunity driven by 'amazing' demographics
Investment in Africa will benefit from the unlocked potential of its youthful population, one financial expert told CNBC Wednesday.
"The main opportunity in Africa is driven by one single aspect, which is population demographics," Miguel Azevedo, head of investment banking for the Middle East and Africa at Citigroup, said. "Demographics are amazing in Africa."
Opportunity in Africa is driven by amazing demographics for growth: Citigroup 6:28 AM ET Wed, 7 March 2018 | 03:25
The world's 10 youngest populations are in Africa. Niger, with its average age of 14.8 tops this list, according to the World Economic Forum, citing data from the United Nations. According to the World Bank, demographics could result in 11 to 15 percent gross domestic product growth in the continent between 2011 and 2030.
But, a massively young population "can easily become an issue if you don't create the jobs for them," Azevedo warned, citing this as a key area for opportunity. Companies "need to have access to global markets. Access to capital is the key."
"Over the last 3 weeks we have raised almost $6 billion of bonds for African issuers," he added.
Private equity currently does the most trades in Africa, Azevedo detailed.
Companies in Africa have emerged from the financial crisis with "very solid business models" that have mastered operating in the continent, he said. "They are now ready to go to the public market."
"The pipeline of IPOs (initial public offerings) out of Africa is massive," he added. |
