China’s influence in Africa continues to grow as almost 50% of key infrastructural or construction works in Ghana are held by Chinese contractors, according to data from Fitch Solutions, research arm of ratings agency, Fitch.
It said the Chinese presence on the continent is even higher in other African countries including Nigeria, Kenya and Tanzania.
China’s dominance in Sub-Saharan Africa’s rail and ports sectors, the report stated, is largely shared between two state-owned construction firms and their respective subsidiaries: the China Communications Construction Company (CCCC) and China Rail Construction Corporation (CRCC).
“As many countries in Sub-Saharan Africa (SSA) aim to shift freight volumes from road to rail and as coastal markets compete to become gateways and trade-hubs for their respective sub-regions, we expect continued investment into freight-related infrastructure.”
“Currently, Chinese contractors have established their dominance in the SSA's freight infrastructure construction sector and Chinese construction firms hold sizeable shares of construction roles, often exceeding 60%, in the rail and ports sectors of key markets in East Africa, including Ethiopia, Kenya, and Tanzania. Chinese contractors hold a strong presence in West Africa, too, where they are heavily involved in Nigeria's large rail and ports infrastructure project pipelines”, it said.
Furthermore, Fitch Solutions said the China Communications Construction Company and its subsidiaries hold by far the most construction roles in the region’s ports sector.
“CCCC and its subsidiaries China Harbour Engineering Company (CHEC) and China Road and Bridge Corporation (CRBC) hold by far the most construction roles in the region's ports sector, across the greatest number of markets. CHEC is involved in some of West Africa's largest port projects currently under construction, including the US$1.5 billion Lekki Deep Sea Port project in Nigeria and the US$1.5 billion expansion of Tema Port in Ghana.”
The report concluded saying, “we note that a long-term deterioration of US-China relations and potential US sanctions targeting Chinese contractors could restrict Chinese firms' access to non-Chinese sources of financing and threaten to thwart Chinese construction companies' potential long-term ambition to increasingly compete with other foreign firms for such funding sources”.
“To the extent as such ambitions would lend long-term stability to Chinese contractor's market shares in Sub-Saharan Africa's freight infrastructure construction industry, this constitutes a downside risk for their positions in the sector”, it emphasised.
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