Tag Archives: China

Running the Numbers: Chinese Social Media and Dangote Industries

 

Tom Griffiths

Last week, we at Gong were treated to a lunchtime talk by Jonathan Smith of Hot Pot Digital. Jonathan runs a bespoke service, representing a number of the UK’s brands on Chinese social media sites like Sina’s Weibo (China’s Twitter-equivalent in both micro-blog format and number of users). His talk raised a question in my mind: what share of voice does African business news have on Chinese social media channels, as compared with Twitter?

China-Africa trade receives a lot of attention, both positive and negative, in English and French social media. Simply search for the words “China” and “Nigeria” on Twitter and receive a stream of news, statistics and viewpoints. This is of little surprise given China’s perceived importance in many of Africa’s economies. I was interested if a similar ‘conversation’ exists on Weibo.

The story I decided to test my hypothesis on was this week’s news that Dangote Industries, a Nigerian Conglomerate, intends to invest US$9billion in building the country’s biggest oil refinery along with petrochemical and fertiliser plants. Dangote Industries’ founder, Aliko Dangote, announced that his company will be putting up US$3 billion and seeking US$6 billion in loan capital.

My admittedly less than rigorous method of investigation was to compare mentions of “Dangote” on Twitter with mentions of “Dān gē tè (丹格特)” on Weibo over the 5th of September. Before going into the findings I would like to note that I recognise Twitter is widely used in Nigeria when compared with Weibo. I have looked at geo-tagged tweets from users outside of Nigeria to try to negate this bias however I realise any findings were always going to be heavily weighted towards Twitter.

The results: Weibo had only two posts that mentioned the story. Both simply stated the facts without commentary and provided a link to a longer write up. Both posts were made by petroleum industry trade publication’s Twitter accounts. Twitter, on the other hand, held a huge number of tweets on the news. Many of these came from Nigeria, however there were also many hundreds from Kenya, the US, Britain and Indonesia. Most tweets simply restated the facts, however a number commented on the potential job creation of the new factories.

The results were striking, even with the obvious bias in the experiment: 2 Weibo posts compared with thousands of tweets. It seems that the new Nigerian refinery just wasn’t a talking point on Weibo, despite the resource trade between China and Africa being so well publicised. However, as many African countries’ economies rise, will we see an increase in discussions on African business on Weibo?

It would be interesting to repeat the test on a piece of news that directly involves both China and an African country: an experiment for a later day.

 

Obama’s African visit

 

Isabelle Alenus-Crosby

President Obama’s long-awaited trip to Africa is coming to an end, and he didn’t manage to hide the real reason he was there.

Many Presidents are visiting the continent these days, but the fact that Obama is half white American and half black African means that, in Africa itself, his visit has generated a lot more interest than when (for instance) China’s new president embarked on a trip less than two weeks after taking office earlier this year. What also differentiates Obama from the others is that he makes great speeches, and I especially liked his ideas for a “Power Africa” initiative and “sustainable” African energy strategy.

All through his trip, the President has looked happy, relaxed, and “at home”, despite all the security that he has surrounded himself and his family with. What seems to have been most significant to those he went to visit is that, in all three countries (Senegal, Tanzania and South Africa), Obama emphasised that he welcomes world economies turning their sights to Africa. However, as his trip matures, his real views are increasingly being felt.

African leaders should “pick their international partners carefully”, and “push back against countries that bring in their own workers”, a clear criticism of China. Another clear criticism of China was Obama’s “wildlife and importance of tourism speech”, condemning illegal trafficking. The White House has already issued a statement this morning regarding the launch of a new anti-poaching initiative in Tanzania as of next month.

From the cheers heard yesterday in Dar es Salaam however, it is clear that the word “partnership” is the magic word in Africa these days. When Obama said the West’s goal is to “partner” with Africa, the crowds went wild.

It is important to note that both the USA and Europe are home to large communities with strong African heritages and that Africa and America/Europe often share a common language, making training and technology transfer much more straightforward. Africans know this, and they clearly want it. We also have a common history, for better or for worse. It is Europe’s common history (mostly violent) that unites them now within a European Union that, even though it is still in its infancy, seems to be doing alright despite some teething problems.

The younger generation in Africa, Europe and America have a lot in common through a shared history, that we are coming out of together, and the significance of this cannot be trivialised. This does not mean that partnerships with China are a bad idea.  In fact, Africa has already partnered successfully with many countries in Asia, forming the bulk of the South-South trade. Obama’s words should however be a warning to China, one that I’m sure they’ll heed given the investments they’ve made on the continent in the last decade.

The bottom line is that the whole African continent is full of promise. I would therefore like to reiterate what I wrote in my previous blog: A united Africa will be stronger, but I agree that it must choose its partners well. Yesterday afternoon, Obama revealed a venture, dubbed ‘‘Trade Africa,’’ that aims to increase the flow of goods between the United States and sub-Saharan Africa. The initial phase will focus on East Africa — Burundi, Kenya, Rwanda, Uganda, and Tanzania — and in a couple of years, the phase will be extended to the rest of Sub-Saharan Africa.

Let’s hope that this will be a partnership made in heaven, and just one of many.

 

Africa invests in Africa

 

Isabelle Alenus-Crosby

A growing number of African countries are rapidly joining the ranks of prominent investors across the continent.

According to the International Finance Corporation (IFC), the rate of FDI projects from emerging markets has grown at a healthy compound rate of over 21% since 2008 (triple the amount from developed markets). The top investors were still India, the United Arab Emirates and China at the start of 2013, but intra-African investment has become very impressive since then. Nobody knows Africa better than Africans, and continued political stability across the continent is making them trust their own. The beauty is that increased economic stability and growth is allowing them to help accelerate the African success story through rapidly increasing cross-border investments.

SA has been at the forefront of the growth in intra-African trade but Kenya, Ghana and Nigeria are also investing heavily this year. From 2014, it is expected that countries like Angola and Mozambique will join their ranks.

The star performers, so far, in 2013, are Ghana, Nigeria, Cote d’Ivoire, Kenya, Tanzania, Zambia, Mozambique, Mauritius, Ethiopia, Namibia, Botswana, Angola and South Africa.

THE World Bank’s investment arm will increase lending to sub-Saharan Africa by up to a quarter in 2014 as private sector companies continue to flock to the region. The IFC is expected to make new investments of USD 5bn and Japan will provide USD 2bn worth of financial support over the next five years to back Japanese-owned development projects on the continent. Europe and the United States are also expected to increase their investments dramatically according to the World Bank, which sees Sub-Saharan Africa’s GDP accelerating to almost 6% over three years, driven by investment and commodity prices.

Roughly half the IFC’s annual lending in the region goes to financial markets and institutions to help improve the flow of credit to smaller businesses, which employ most of Africa’s workers. Another third goes to infrastructure projects and natural resources investments. The expanding sets of SMEs is bringing real economic diversification and are giving rise to internationally competitive companies, thereby providing access to global markets, and consequently higher wages and salaries. This, in turn,  leads to the rapid growth of the middle-class and further political stability.

Even the most cautious investors have to admit that all the excitement surrounding Africa is grounded on solid analytical soil. The evidence might be that within a decade Africa will be its own biggest investor. I honestly cannot wait.