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Chinese hog 25pc of eastern Africa building projects

The standard gauge railway is one of the projects financed by China. FILE PHOTO | NMG
The standard gauge railway is one of the projects financed by China. FILE PHOTO | NMG 

China is funding a quarter of large-scale construction projects in eastern Africa, cementing Beijing’s ascendancy in the region’s economic diplomacy at the expense of traditional allies like the United States and the European Union.

The latest Deloitte Africa Construction Trends Report 2017 shows China is bankrolling 25.4 per cent of the mega projects in the region.

The Asian tiger is followed by international development finance institutions like the World Bank, which comes in second at 19.7 per cent.

African development finance institutions like the African Development Bank (AfDB) are ranked third at 15.5 per cent while funds from private domestic sources stand at 4.2 per cent.

The EU accounts for 8.5 per cent while single countries contribute seven per cent, with the US trailing at a paltry 2.8 per cent.

“China is the most prolific funder of large-scale construction projections in East Africa financing one in four projects in the region,” says the report released in Nairobi on Tuesday.

Deloitte Africa infrastructure and capital projects leader Jean-Pierre Labuschagne linked the rise of Beijing in the region to a cocktail of geo-politics as more EAC nations look east and abandon their traditional partners in the search for new markets by the resource-hungry Asian behemoth.

“You have a Chinese economy that is booming, possibly flattening a little bit because of the world economy and so they are looking to export those services and expertise,” Mr Labuschagne told the Business Daily.

“I do think there is also an element of a political statement behind it. They may be filling a vacuum from traditional western powers which may be withdrawing and the Chinese have decided that East Africa is an important investment destination.”

The report says that China is also the largest contractor at 53.5 per cent followed by private domestic firms (11.3 per cent), the Middle East (8.5 per cent), European countries (8.5 per cent), India (4.2 per cent), Italy (4.2 per cent), Japan (4.2 per cent) and single countries (5.6 per cent).

China pumped billions of dollars in Kenya to finance power generation and road construction projects in the past four years. Other mega projects include the standard gauge railway.