African governments and firms with preference for small and medium scale enterprises (SMEs), including Nigeria, will benefit from a $60 billion funding support from The People’s Republic of China.
A breakdown of the $60 billion funding support is as follows: $5 billion for free aid and interest-free loans; $35 billion of preferential loans and export credit on more favourable terms; $5 billion of additional capital for the China Africa Development Fund and special loan for the development of African SMEs each and $10 billion (initial capital) of China-Africa Production Capacity Cooperation Fund.
Another $40 billion pool fund is available for interested countries and firms in the continent, through the Maritime/Silk Road Fund.
The financial support is through the Forum on China-Africa Cooperation (FOCAC), which was established in 2000.
Between 2016-2018, FOCAC will focus on agriculture and food security, with $60 billion of funding support, according to Professor Zhang Yong-Peng of the Institute of West Asia and African Studies, in the Chinese Academy of Social Sciences (CASS).
Yong-Peng, expert in international politics, also disclosed at a lecture for a delegation of Nigerian journalists on the Belt and Road Initiative, in Beijing, China, yesterday, that already, the country has established/built 25 Agricultural Techonological Demonstration Centres (ATDC’s) in Nigeria, South Africa, Tanzania, Ethiopia, Ghana, Egypt and Rwanda.
With the FOCAC, “Nigerian companies should come out and bid for the loans and made use of it for development. A new railway, from Lagos to Ibadan is being built with Chinese loan but the language barrier is an issue,” said Yong-Peng.
He also explained how Nigeria, as a country and SMEs can benefit from the $40 billion pool fund, under the Silk Road Fund.
“The pool is not distributed by making a plan. You apply as a country, as a local government or as a company, stating the amount of capital needed and back it up with a business plan and how much is needed as well as the time frame for the project. It will be evaluated, whether it is feasible or not. If approved, you get financial support.
“But, some African countries are not active by making use of these support capital. They should make plans, as many as possible and grasp these opportunities.”
Chinese President, Xi Jinping, had announced at the annual meeting of the World Economic Forum, in Davos, Switzerland, that from May 14 to 15, China will host, in Beijing, the Belt and Road Forum geared towards international cooperation.
“The initiative aims to discuss ways to boost cooperation, build cooperation platforms and share cooperation outcomes.”
The Belt and Road Initiative covers more than 100 countries, with the cooperation instruments including trade, investment and cultural exchanges.