Policy Brief & Alerts

June 5, 2015

The Chinese Model Of Infrastructure Development In Africa

development is a key step in providing a competitive business environment for
African economies. It provides the backbone for poverty reduction strategies
and programmes designed to improve the livelihood of the poor. Africa is in
dire need of infrastructural development. The absence of quality infrastructure
in the continent holds back per capita economic growth by 2 percentage points
each year and depresses firm productivity by as much as 40 percent (Escribano
et al., 2008 and Kelly, 2012). Estimates suggest that around USD 90 billion is
required to close Africas infrastructure gap annually until 2020 (AICD, 2010).

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Date of Publication:January 2015

Volume Number:1 Issue 10

Document Size:12 pages

the past decade, China has financed infrastructure projects worth USD 28
billion in Africa (World Bank, 2013). In fact, from 2001 till the end of 2011,
around 10 major RFI deals were either completed, or at the implementation stage
in eight African countries: Angola, Congo-Brazzaville, Democratic Republic of
Congo (DRC), Ethiopia, Gabon, Sudan, Nigeria and Zimbabwe, with a combined
financial value of approximately USD 22 billion (Davies, 2010; China-Africa
Economic and Trade Cooperation 2013; and Konijn, 2014).

most attractive attribute of Chinese RFI loans for African countries is the
competitive interest rates and no-strings attached conditions provided by RFI
swaps. On the part of China, RFI loans provide a way to secure export markets
for Chinese goods and services, given that the approval of RFI loans by Chinas
EXIM bank is tied to the purchase of around 70 per cent of Chinese goods and
services. Thus, the use of RFI loans in Africa actualizes Chinas economic
objective of export promotion and the foreign policy of non-interference.



Nigeria Economic Update (Issue 23)

Recent Data on Nigerias Real GDP growth rate (Year-on-Year) declined by 2.47 percentage points, from 2.11 per cent in 2015Q4 to -0.36 percent in 2016Q11. This is the lowest GDP growth rate since 2004Q2 (-0.81 percent). The Oil sector continued to contract, as -1.89 percent growth was recorded in 2016Q1. The negative growth witnessed in the oil sector was likely driven by the fall in global oil prices by $9.732 and decline in domestic crude oil production, relative to preceding quarter. Similarly, the Non-oil sector witnessed a negative growth as it declined by 3.32 percentage points from 3.14 percent in 2015 Q4 to -0.18 percent in 2016Q1. The underperformance in the non-oil sector was driven by significant contractions in financial (by 17.69 percent), manufacturing (by 8.77 percent), and real estate (by 5.48 percent) sub-sectors. Given that the present economic fundamentals point to a likely recession in 2016Q2, the government can stir economic activities by speeding up the budget implementation process to spur growth in the non-oil sector and the economy at large. More so, the domestic production shock in the oil sector needs to be addressed to effectively leverage on the present marginal rise in crude oil prices.

Nigeria Economic Update (Issue 4)

Recently released power sector report by the National Bureau of Statistics records a total average energy generation of 2,548GWH by 25 power stations, from October 2016 to December 2016. Daily Energy generation, attained the 2016Q4 highest level of 3,859.6MW in October 2016, and a lowest level of 2522MW in the same month. On the average, current daily energy generated which is below 3,000MW, prompts system malfunctions. Thus, the irregular power generation and supply experienced in recent times is attributable to shortage of gas owing to non-functional major pipelines, in addition to the inability of GENCOs to make payments for the available gas supply. Given the recent challenges to power supply, efforts should be geared towards the diversification of electricity generation. Government should consider investment in renewable as well as coal energy to complement gas power supply.

Employment Choice And Mobility In Multisector Labor Markets

This paper examines employment choice and occupational mobility using data from Ghana in a model that incorporates capital market failure, credit constrained individuals and draw self-employment capital from family asset.