Ecobank, Bank of China to boost Africa-China trade relations

Posted: April 11, 2011 in Economic Reporting
Tags: , , , ,

Ecobank Transnational Incorporated (ETI) on Monday joined forces with the Bank of China to open a China Desk in Ghana to manage the flow of Chinese funds for infrastructure projects in Africa.The initiative also committed the two entities to boost trade relations between Africa and Asia.

“This is a manifestation of economic growth in the African continent,” said Nicolas Sai, Head of Banking and Supervision of the Bank of Ghana at a news conference.

Two senior staff each from Ecobank and the Bank of China will manage the pilot project scheduled to be extended to other African countries if successful. The desk is tasked to provide a wide range of financial services to Chinese companies not only in Ghana but rest of the African continent.

The coming into force of the initiative dates back in July 2010, when ETI signed an agreement with the Bank of China for the establishment of a dedicated desk to Chinese businesses in all its affiliates across the African continent.

For over 50 years, Africa has become an essential continent for investment by the Chinese. China is currently, Africa’s largest trading partner.

Bilateral trade between Africa and China grew 43%, nearly, US$115bn in 2010 over the previous year’s (2009) US$80bn.

China’s export of mechanical and electronic products accounted for more than 50% of the total export in Africa.

The Asian country’s foreign direct investment (FDI) in Africa has also surged in recent years by more than 80% in the scope of investments widening from the mining sector, agriculture, tourism among many others.

Chinese businesses top the list of registered companies in terms of FDI in Ghana, according to the Ghana Investment Promotion Center (GIPC).

Trade between Ghana and China reached over US$2.05bn in 2010, breaking the US$2bn mark for the first time.

“These developments have helped in deepening the relations between Africa and China,” Mr. Samuel Ashitey Adjei, MD Ecobank Ghana and Cluster Head, WAMZ said at the news conference.

Officials of Ecobank told The Chronicle that the bank has already facilitated a US$600 million Chinese electricity project for the African continent as well as other infrastructural projects.

Last year, Ghana signed a $13 billion loan facility agreement with China — one of China’s biggest financial commitments in Africa to date — to fund energy, agriculture and transport projects, according to Reuters.

Ghana has so far drawn $2.85 billion from the loan facility to fund road construction.

Commenting on the initiative, Mr. Gao Wenzhi, Economic Counsellor at the Chinese Embassy in Ghana said “the China Desk will provide safe and reliable financial services and strengthen ties between the two countries.”

 

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