Various East African countries along China’s Belt and Road Initiative(BRI) have the potential to provide major opportunities for investment, a new report released Wednesday has shown.
The report, Belt and road: Opportunities and Risk:The prospects and perils of building China’s new Silk Road released by Baker McKenzie indicates that these countries include Kenya, Tanzania, Ethiopia,Djibouti and Egypt.
The reports acknowledges that East Africa is a more integral part of BRI because of Djibouti’s
ports, Ethiopia’s fast rising manufacturing, and the region’s existing plans to connect rail, road and energy networks.
Egypt offers a significant opportunity for Chinese firms, but they will need to collaborate with local players and the multilateral banks to avoid major challenges.
Key opportunities will be transactions related to major projects in the power and infrastructure sector and related financing. China’s construction of power plants and
transmission lines in East Africa will be a game changer for local industry.
Port connectivity will also improve significantly in the next five years.
As a result of the Belt and Road Initiative, China’s smartphone and household electronics brand owners are expected to expand in Africa as they look to repeat their success in Southeast Asia and South Asia.
Announced by President Xi Jinping in 2013, the Belt and Road Initiative (BRI) is a combination of two initiatives:A 21st Century Maritime Silk Road and a Silk Road Economic Belt.
Also known as One Belt One Road the project aims to boost policy coordination, facilities connectivity, enhance smooth trade, help in financial integration and promote people-to-people bonds.
The majority of investments so far have been in infrastructure, energy and mining, ranging from standard gauge railway in Kenya to hydropower projects in Cambodia and lignite coal deposits in Pakistan.
The maritime “Road” will be a major opportunity for consumer and industrial firms as it accounts for 63% of the global population and 44% of its GDP, excluding China.