Discontent brews over small-scale Chinese traders

Namibia has announced it will ban foreign investment in medium-sized public transport business and hair beauty salons.

Citing growing Chinese involvement in the businesses, Namibia’s Trade and Industry minister, Hage Geingob, last week announced that the government would enforce legislation and make foreign investors obtain permits to invest in any form of retailing in a bid to protect local jobs and the country’s economic well-being.

“Much of this concern has been sparked by activities of Chinese business persons,” the minister was quoted by Bloomberg as having said.

Analysts say the dilemma facing the southern Africa nation is likely to be replicated in other African nations including Kenya, thanks to the latest wave of forays into the continent by fast rising economic power houses such as China.

“It is going to be a contentious issue going forward especially when the foreign investors begin moving into areas way beyond the comfort zones of locals. For instance here in Kenya we are already seeing disenchantment among road and construction contractors who claim they have been locked out by the Chinese,” an analyst, Mr Robert Shaw told Business Daily.

Africa has become a perfect match for the Asian economic tiger because consumers in poor countries on the continent prefer the more affordable goods and equipment from the Asian nation.

Statistics showed that in 2008, total trade between the two blocs was valued at $106.8 billion.

According to Prime Minister Wen Jiabao, China invested $875 million in Africa in the first nine months of 2009, marking a 77.5 per cent year- on-year growth.

China also pledged $10 billion in November 2009 in fresh low-cost loans to Africa over the next three years.

The data further showed that while trade volumes inevitably suffered in the first half of 2009, Chinese enterprises signed $22.45 billion of new labour service contracts in Africa, up 25 per cent and completed $11.53 billion of business volume, representing a 61.1 per cent year- on- year growth.

In Kenya alone, the economic connections with China have grown by leaps and bounds with the Economic Survey 2009 saying that Kenya exported goods worth Sh2 billion to mainland China in 2008 compared with imports worth Sh63 billion.

Projections released in December by the Chinese ambassador, Deng Hongbo, further said that between January and October 2009, the value of bilateral trade between his country and Kenya stood at $1.02 million compared to $1.2 million realised over 2008.

The performance in 2008 marks a 30.4 per cent leap over the previous year, indicating a firm run in the value of bilateral trade between the two countries.

Chinese enterprises have also shown interest in key sectors of the Kenyan economy including energy and roads construction where some of them are already operating.