Business / Economy

Room for growth

By Andrew Moody and Wang Chao (China Daily) Updated: 2014-04-14 07:12

Despite that loss, Chinese companies are still involved in major infrastructure projects in Gabon. China Harbor Engineering Co is currently constructing phase one of a $120 million 15-month project for a new waterfront in Libreville.

Sinohydro, the biggest Chinese company in Gabon, has just completed a $500 million hydropower station at Grande Poubara on the Ogooue River and is also engaged in road contracts of more than $1.2 billion.

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The Chinese also built and part-funded the country's main football stadium, the Stade d'Angondje, which was used for the 2012 Africa Cup of Nations, as well as building the country's National Assembly and Senate buildings.

It is a country in which French interests are entrenched, however. The last of the four territories in French Equatorial Africa to become independent in 1960, there remain some 10,000 French citizens living in the former colony and some 300 French companies.

Gabon is increasingly also less reliant on Chinese funding. In December, it raised $1.5 billion through a new 10-year eurobond offering to reduce its borrowing costs and fund infrastructure development.

The cost, at 6.37 percent, is far higher than most Chinese funding, which can be as low as 2 percent over 20 years and often can be rolled over after the term.

At the Chinese embassy in the Sabliere district of Gabon, economic counselor Wu Jingchun says there seems to be a reluctance to receive financial support from China.

"We have approached the Gabon government about finance but they are not very keen to get loans from China. The Export-Import Bank of China has been in contact to offer loans. They don't appear to want loans from China," he says.

Room for growth Wu, a 50-year-old urbane diplomat with spells in Cameroon and Paris behind him, says Gabon can present significant challenges for Chinese companies operating in the country.

"If you build a factory you have to import all the materials because nothing is manufactured locally. Local labor costs are also high. The minimum wage is $300 a month compared to just $60 in neighboring Cameroon. The market is also small. If you sell everyone in the country two cellphones that is only 3 million phones," he says.

One area in which China has had a significant role in Gabon has been in agriculture with support, including interest-free loans for rural development, being offered since the 1970s.

In his office suite in the ministry building in the center of Libreville, Julien Nkoghe Bekale, Gabon's minister of agriculture, believes China has played a vital role in developing the country's agriculture. "China has successfully reduced the number of people under the poverty line in a very short time, so Gabon wants to learn from China."

The government is currently looking at building an agricultural demonstration center in every province of the country. Chinese companies operate such concerns in many parts of Africa.