Latest Edition: Emerging Powers News Round-Up

1. General

Study sends agriculture warning to Africa
Agricultural research produced in partnership with the Bill and Melinda Gates Foundation concluded last week that Africa should stop relying on just a handful of crops and developing new seeds as the default solutions to end hunger and poverty. The message, outlined in a report by the Worldwatch Institute, appears out of step with the Gates foundation’s funding of agrotechnology initiatives to achieve agricultural development in Africa.
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East Africa Eager to Welcome Independent South Sudan
With the final referendum votes being counted and south Sudan preparing to cut ties with the north, excitement is building in East Africa, as the prospects of an expanded political and economic union draw near. While official results from south Sudan’s historic election are not expected until February, unofficial tallies indicate nearly universal support for separation from the north. Visions of the future in Africa’s newest country are already taking shape, and with them are visions of a greater East Africa.
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M&A hits new high in Africa
Investors and analysts expect the pace of deals to gather speed this year as more overseas groups and banks target Africa's fast-growing economies, growing middle classes and increasing trade flows with Asia. "Africa is becoming much more important for a lot of global banks. As a consequence, you are seeing increased competition," said banking analyst Johann Scholtz of Afrifocus Securities.
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2. China in Africa

China to forgive half of Africa rail debt
China has signed a protocol with Zambia and Tanzania in Zambian capital city Lusaka, writing off 50 percent debts of Tanzania-Zambia Railway (TAZARA) Chinese Deputy Commerce Minister Zhong Shan, Zambian Minister of Finance and National Planning Situmbeko Musokotwane and Deputy Minister of Finance and Economic Affairs of Tanzania Pereira Silima signed the protocol on Wednesday evening at Lusaka's Intercontinental Hotel. Zhong said the decision made by the Chinese government to remit the partial debts is of the friendship between China and the African countries, and Chinese people wish to support Zambia and Tanzania in their capacity of development by seeing the railway getting off its burden of current operational difficulties.
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China hands over Zimpeto National Stadium to Mozambique
The Mozambican government Monday received the Zimpeto National Stadium from the Chinese government. It is the biggest sporting venue built in Mozambique since the country’s independence and holds 42,000 spectators. Ten thousand of the 42,000 available seats at the venue are under a covered area, which also houses the VIP area and areas for restaurants and the media. The stadium took two years and three months to build and cost US$70 million funded by the Chinese government, which took charge of the building project by handing it over to the Anhui Foreign Economic Construction Co. (AFECC).
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China set to fund West African infrastructure
It is reported that China Inc having earmarked more than USD 5 billion to increase its footprint in West Africa's iron ore industry last year is tipped as the likely source of billions more for the railways and ports needed to get the next generation of projects off the ground. In a report on West Africa would-be iron ore miners, Foster Stockbroking analysts said the single biggest risk facing companies was infrastructure. Although the world's biggest miners including BHP Billiton, Rio Tinto and Xstrata are active in the region, it is China's deep pockets that are expected to foot much of the bill as the resource-hungry nation seeks to lock down future sources of supply.
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Chinese authorities probe fake good
After numerous complaints, Chinese authorities are said to be taking counterfeits seriously and have requested assistance from Namibian business people to root out counterfeit products that are flooding the Namibian market. The move is said to have come directly from the Chinese government in order to “guarantee the quality of China’s bulk exports to Namibia”. Whether or not the directive would yield the desired results is yet to be seen. But the Chinese Embassy in Namibia is asking local business people to submit all information pertaining to fake or counterfeit products by Chinese businesses and has promised to act on all information provided.
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Chinese investor scoops Liganga, Mchuchuma bid
A Chinese firm has won the tender to invest in the Mchuchuma and Liganga mining projects in southern Tanzania and is expected to pump in 3bn/-. The investor, Sichuan Hongda Corporation won the competitive tender in a bidding exercise that attracted 48 international companies.
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3. India in Africa

India's largest trading company opens doors in South Africa
MMTC Ltd, India's largest international trading company with a turnover exceeding US$ 10 billion has opened offices in South Africa in a bid to significantly increase trade between India and South Africa. Indian Commerce Minister, the Hon. Mr. Anand Sharma officially inaugurated the MMTC Office in Johannesburg on Monday 10 January, 2011 at a function organised by MMTC in association with the Consulate General of India in Johannesburg. The event was hosted by His Excellency Mr. Virendra Gupta, High Commissioner of India in South Africa.
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Indian bank expanding and recruiting in Africa
This week the Indian trade minister has made a high-profile official state visit to South Africa, as two-way trade between the two countries is growing beyond expectations and MMTC, india’ state-owned commodity trading enterprise, has opened its first African branch in Johannesburg’s Sandton business district. South Africa has just been formally invited to join the Bric bloc, made up of Brazil, India, Russia and China and in April it will attend the Bric summit in China for the first time.
Against this background analysts expect business with India to increase in the next twelve months. One company has made a head start: Religare Capital Markets, the investment banking arm of Indian billionaire Malvinder Singh’s Religare Enterprises. Last year Religare was given by the board a mandate to spend $1bn on strategic investments and since then RCM has been busy making acquisitions and recruiting people in Asia and the Americas as well as Africa.
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Huge untapped potential for investment and trade between India and South Africa
Shri Anand Sharma, Union Minister of Commerce & Industry, while addressing the India Business Forum, in Johannesburg last evening, said that there are huge untapped potential exists in the area of investment and bilateral trade between India and South Africa. Interacting with the captains of industry from both sides, Shri Sharma said that for Indian businessmen, Africa is an untested but potential huge trade and investment market for the future. South Africa could provide the key to unlocking this market.
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$15 b target set for India-South Africa bilateral trade
Buoyed by the massive growth recorded in trade between India and South Africa, and the huge potential it holds for the future, the two countries have decided to set a target of achieving $15 billion bilateral trade by 2015. The two countries are also set to breach the $10 billion two-way trade target by next month, 23 months ahead of schedule. Mr. Sharma was speaking in Johannesburg during the inauguration of the first branch office of state-run commodity trading enterprise MMTC. Mr. Sharma, who met the South African President, Jacob Zuma, on Monday, will also have a bilateral meeting with South African Trade and Industry Minister Rob Davies.
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India to set up educational institutes in Africa
India plans to set up a slew of educational institutions in Africa over the coming years in a soft diplomacy initiative at a time when it is competing with China over presence and investments in the region. The human resource development ministry will set up an Africa Institute of Educational Planning and Administration (AIEPA) in Burundi and an Africa Institute of Information Technology (AIIT) in Ghana under the plan, top government sources have told HT. At least another dozen institutes, including one on foreign trade and management, are also in the pipeline though they are yet to be finalized, the sources said.
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India for early conclusion of trade pact with southern Africa
India is keen to conclude a preferential trade agreement with the Southern African Customs Union (SACU) as this will significantly boost bilateral trade, Commerce and Industry Minister Anand Sharma said Tuesday. 'This should provide an enormous boost to ongoing levels of bilateral trade, specially in products such as pharmaceuticals, machineries, automobiles, where India enjoys a competitive advantage,' a statement released here quoted Sharma as saying at the India Business Forum in Johannesburg.
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India-UK fund to boost agro-innovation in Africa and Asia
The Indian and UK governments are tapping into agricultural innovation outside the traditional international development community with the launch of a £20 million (US$32 million) programme for food security. Sustainable Crop Production Research for International Development (SCPRID) will allow scientists to research stressors, ranging from pests to climate change, on five key crops — cassava, maize, rice, sorghum and wheat — with a view to boosting sustainable crop yields. Brian Harris, head of the agriculture and food sector of the UK Biotechnology and Biological Sciences Research Council, which is managing the programme, told SciDev.Net that the initiative builds on earlier partnerships with the UK Department for International Development (DFID) to "bring new people into the international development field" by encouraging UK scientists to solve practical agricultural problems in developing countries.
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4. In Other Emerging Powers News

China's outbound direct investment up 36 percent last year
China's outbound direct investment in the non-financial sector hit 59 billion U.S. dollars last year, up 36.3 percent year on year, the Ministry of Commerce (MOC) announced Tuesday. Total outbound direct investment in the non-financial sector had amounted to 258.8 billion U.S. dollars by the end of 2010. Though China's outbound direct investment grew rapidly last year, most of it went to the Hong Kong Special Administrative Region, as well as countries in Asia and Latin America, with a very small amount to Europe, the United States and Japan, said MOC spokesman Yao Jian.
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Standard advises on China power deals
Standard Bank Group, Africa's largest bank by assets, acted as the sole financial adviser to the State Grid Corporation of China (SGCC) on its $1.8bn acquisition of 100% ownership of seven power transmission companies in Brazil. The acquisitions are one of the largest investments made by a Chinese company in Brazil. SGCC, the world's largest utility, has bought the seven companies from Spanish groups Cobra, Elecnor, Isolux and Abengoa. Craig Bond, Chief Executive of Standard Bank in China said it was pleased at being the adviser.
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Zuma, Uganda's Museveni Will Sign Agreements; Eskom
South African President Jacob Zuma who is on a two- day state visit to Africa’s biggest economy to boost ties, will meet President Museveni to sign agreements on bilateral cooperation in agriculture and a memorandum of understanding on public works and infrastructure development. They’ll also review progress on areas of collaboration in trade and investment, water and environmental affairs and energy and social development.
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Blackwater Founder Said to Back Mercenaries
Erik Prince, the founder of the international security giant Blackwater Worldwide, is backing an effort by a controversial South African mercenary firm to insert itself into Somalia’s bloody civil war by protecting government leaders, training Somali troops, and battling pirates and Islamic militants there, according to American and Western officials.
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5, Blogs, Opinions, Presentations and Publications"> Read More

Bric becomes Brics, but will this be good for South Africa?
Late last month, it was announced that South Africa had been invited to join the Bric grouping of Brazil, Russia, India and China. On December 23, Chinese Foreign Minister Yang Jiechi telephoned his South African counterpart, Maite Nkoana-Mashabane, (China currently chairs Bric) and conveyed the invitation to her, adding that a letter to President Jacob Zuma had been dispatched by Chinese President Hu Jintao, inviting South Africa’s leader to the third Bric summit, to be held in China this year. Yang also indicated that the group would now be known as Brics. “We believe that South Africa’s accession will promote the development of Bric and enhance cooperation between emerging economies,” said Chinese Foreign Ministry spokesperson Jiang Yu. The Russian Foreign Ministry stated that South Africa’s admittance to the group was “in line with sustainable trends of global development, including the emergence of a polycentric international system. The entry of [South Africa">, an active participant in the G20 and the largest economic power in Africa, will not only increase the total economic weight of our association but also will help build up opportunities for mutually beneficial practical cooperation within Bric.”
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South Africa as a BRIC Member
Gerhard Erasmus asks what we can expect from South Africa’s admission as the fifth member of BRIC and what does it mean for Africa. He asks: Is Pretoria now in a new league vis-a-vis other African states? Will it take on more responsibilities to promote African interests when meeting with its BRIC partners?
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Has China's Export Financing Met Its Match?
A fascinating new development in the dry area of export financing: we learn that for the first time, the US Eximbank has matched China Eximbank's terms for export financing. John Pomfret reports for the Washington Post on the case of GE's effort to win a tender for train exports to Pakistan. GE was about to give up: After all, China was a powerful competitor that routinely offered low-cost financing - below-market interest rates, easy repayment terms - that cut tens of millions of dollars off the bottom line of its international deals. But in a case that underscores a significant shift in how the United States and the rest of the developed world are dealing with the challenge of China's economic might, the U.S. Ex-Im Bank decided to fight back.
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China Corporate Challengers Brawny, Not Brainy
Brawn, not brain-power, characterizes the Chinese business groups that a new report says will shake up the corporate world order. A list of rising companies from the developing world likeliest to challenge the multinationals (pdf), published by the Boston Consulting Group on Tuesday, suggests size and government backing in China, not entrepreneurialism, may be the source of the global impact by the country’s businesses. China occupies 33 spots on the 100-strong list, against 20 from India and 13 from Brazil.
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Forging a New Partnership: India and Africa
The relationship between Africa and India dates back to more than a thousand years. India and Africa are bonded together by very long traditions of friendship and common historical struggle against colonialism, apartheid, racism and injustice. This shared historical background based on colonialism and a successful attainment of independence is one of the important bases for strengthening India-Africa partnership in the 21st Century. The rapid emergence of India in the globalized world raises the demand for tapping in to Africa’s natural resources, which are available in the African Continent. Africa also has to be industrialized for an equitable distribution in sustainable development of the continent. It is also in the above environment of strengthening the India-Africa Partnership in the 21st Century that India has launched and implemented a number of initiatives to support various aspects of the continent’s peace, stability and overall development efforts.
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Ready for the African safari?
T S Vishwanath highlights that the African continent has been clearly recognised as the next big market for trade and investment globally. A free trade agreement (FTA) with different regions of Africa will be the next logical step in building a dynamic partnership with the region, stated India’s Commerce and Industry Minister Anand Sharma recently while addressing industry. He notes that it is time for India to re-look the strategy to engage in Africa. Therefore it will be important for the Indian government to closely engage with industry in India for developing an Africa strategy since it will help develop a more sustainable partnership, which will be beneficial to both India and Africa.
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What's driving the rise of southern aid agencies?
A fully fledged member of the G20, invited to join another exclusive club, the "Brics" (Brazil, Russia, India, China and now South Africa), and Africa's most promising candidate for a permanent seat on the UN security council (or has that idea been kicked into touch?), it was a matter of time before South Africa announced its own official aid agency. No hopeful new power can be without one.
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Enlarged Bric bloc to prioritise energy security, says India
Fast-growing India has developed an intensive focus on dealing with its energy security challenge, which has emerged as a constraint on the Asian giant’s industrial competitiveness, India’s Ministry of External Affairs joint secretary and spokesperson Vishnu Prakash told Engineering News Online this week.In a briefing with South African journalists in New Dehli, Prakash said the country was strongly focused on increasing its energy capacity, as well as other infrastructure, such as roads, ports, airports and telecommunications, the lack of which was limiting the economy’s growth and development aspirations.
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What BRICS means for agriculture?
Since news of this broke, Goldman Sachs economist Jim O’Neill, who coined the BRIC acronym, has questioned why larger and faster developing emerging economies, like Mexico and South Korea, weren’t asked to join the group before South Africa. Agriculture Business Chamber CEO Dr John Purchase said it likely has to do with South Africa’s strategic position as the strongest economy on the continent, which also makes us a gateway into Africa for Brazil, Russia, India and China.
It’s common knowledge that China and India, especially, are investing heavily into Africa seeking raw materials and minerals, such as coal and iron-ore, for their fast-growing economies, and access to agricultural production to ensure greater food security for their countries, he explained. With the BRIC group now the BRICS group, Pretoria University agricultural economist Prof Johann Kirsten said South Africa will have the opportunity to see “how Brazil and China have become agricultural giants by having good policies, by stimulating investment in agricultural research and by not disturbing investment in agriculture through political interference”
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A strategy to straddle the planet
Welcome to a new era of globalisation, China-style. As the financial crisis recedes, one of the big fears is that the process of increasingly closer links among big economies worldwide will go into reverse as governments and countries look inward. The message coming from the world’s second-largest economy for the past year has been clear: China wants to accelerate the integration of the global economy, but on its own terms. Over the past few decades, China has benefited hugely by hitching itself to a process of globalisation where the rules were written in Washington and the American consumer was the buyer of last resort. China prospered by making first the socks, then the washing machines and finally the iPods sold at Walmart.
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