- Title: SENEGAL: Chinese companies keen back Africa's farms but want greater support
- Date: 12th February 2009
- Summary: DAKAR, SENEGAL (FEBRUARY 11, 2009) (REUTERS) VARIOUS OF CHINESE MARKET SCENES CHINESE OBJECTS INCLUDING METAL PLATES, SHOES, BEING SOLD IN DAKAR'S CHINESE MARKET WOMEN WALKING IN MARKET CHINESE TRADERS IN SHOPS DAKAR, SENEGAL (FEBRUARY 10, 2009) (REUTERS) FORKLIFT MOVING SACKS OF SESAME IN OUAYANG'S FACTORY VARIOUS OF WORKERS FILLING UP SACKS OF SESAME SEEDS (SOUNDBITE) (French) RIPING OUYANG, CHINESE BUSINESSMAN, SAYING: "We have done our part, but we are appealing to the Senegalese government to help us move forward." VARIOUS OF OUYANG LOOKING AT SESAME SEEDS IN HIS FACTORY (SOUNDBITE) (French) RIPING OUYANG, CHINESE BUSINESSMAN, SAYING: "If we hit 150,000 tonnes, how many billions (of francs) will that bring the country? We're talking more than 50 to 75 billion FCFA that comes back into this country. We manufacture here and we export from here, so the money is coming into the country." MORE OF SACKS OF SESAME IN FACTORY (SOUNDBITE) (French) RIPING OUYANG, CHINESE BUSINESSMAN, SAYING: "I come to invest. I'm throwing money (into) here. It's not about exploiting the country and taking its money, no, on the contrary. We come to help the country and and the rural areas, so that they can work and have their own earnings, and make a bit more money." WORKER MOVING SESAME SACKS IN FACTORY
- Embargoed: 27th February 2009 12:00
- Keywords:
- Location: Senegal
- Country: Senegal
- Topics: International Relations,Economic News
- Reuters ID: LVABDXMW2WDGAIUSFCHTRRRYERZA
- Story Text: Chinese companies are keen to invest in African agriculture and flood African markets with cheap goods but investors say governments like Senegal must do more to limit the financial risks.
As China's President Hu Jintao prepares to visit Africa this week by, a Chinese businessman with more than 20 years experience in African agriculture said Chinese markets remain hungry for crops grown on the continent but there were still many hurdles to overcome.
"It would be difficult to convince those who don't know agriculture in Africa to invest in this sector," said Riping Ouyang from his sesame production business in Senegal. "If there are no examples, people won't take risks. But if we succeed, others will follow."
Known more for importing oil and minerals and exporting cheap goods to African markets, Chinese diplomats have been quick to underscore trade in goods such as Ethiopian sesame, Egyptian cotton and Zimbabwean tobacco ahead of Hu's visit.
More than 450 products from more than 30 of Africa's poorest countries are exempt from import tax in China, encouraging 680 million U.S. dollars in exports from Africa by 2008, according to one Chinese briefing.
Ouyang said he set up his business last year after Beijing encouraged private Chinese companies to invest in Mali, Burkina Faso and Senegal.
He also took advantage of an ambitious 345 billion CFA franc (681 million U.S. dollars) agricultural programme that Senegal, one of the world's largest food importers per capita, launched last year after violent demonstrations against high food prices.
Under the scheme, known by its French acronym, GOANA, investors are offered tax breaks on customs duties and value added tax.
Foreign exchange controls have also been lifted for five years to free investors to take profits out of the country.
Ouyang says DATONG invested over 3 billion CFA francs (6 million U.S.
dollars) in its first six months, setting up a factory in Dakar and providing farmers' associations with credit for seeds and fertilisers.
But just six months into operations, the firm is already facing problems recovering financing.
"We have done our part, but we are appealing to the Senegalese government to help us move forward," he said.
Applauded by some for their "no strings attached" approach to Africa, others accuse the Chinese of exploitation.
Ouyang said his business was a model of how both parties could profit from a scheme involving 200,000 people and 35,000 hectares of land.
"If we hit 150,000 tonnes, how many billions (of francs) will that bring the country? We're talking more than 50 to 75 billion FCFA (100-150 million U.S. dollars) that comes back into this country. We manufacture here and we export from here, so the money is coming into the country," he said.
It's not about exploiting the country and taking its money, no, on the contrary. We come to help the country and and the rural areas, so that they can work and have their own earnings, and make a bit more money," he added.
The company, which buys, cleans and bags the sesame for export, plans to invest more than 5 million U.S. dollars a year over the next five years and hopes to produce 150,000 tonnes of sesame per year for export to China, Latin America and Europe.
Sino-African trade has jumped from around 10 billion U.S. dollars per year in 2000 to over 106 billion U.S. dollars last year.
Analysts say Hu will try to show that China's interest in the continent extends beyond extractive industries in resource-rich countries.
Hu is scheduled visit to Mali, Senegal, Tanzania and Mauritius - all relatively stable but poor countries. - Copyright Holder: REUTERS
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