Economy
Over 10,000 Chinese Firms Operate in Africa—Report
By Modupe Gbadeyanka
A new report by McKinsey Africa has disclosed that more than 10,000 Chinese firms operating in Africa, which it said is four times the previous estimate.
This study, according to McKinsey Africa, was conducted across eight countries making up about two-thirds of Sub-Saharan Africa’s GDP.
After the study, it was also discovered about 90 percent of these were private firms, of all sizes and operating in diverse sectors, with about a third in manufacturing.
In a statement made available to Business Post on Thursday, McKinsey Africa noted that these firms are bringing capital investment, management know-how and entrepreneurial energy to the continent, and in so doing, are helping to accelerate the progress of Africa’s economies.
It was also learnt that China remains Africa’s largest economic partner, though it has been a challenge to understand the full extent of the partnership due to a dearth of data.
Across trade, investment, infrastructure, financing and aid, China is a top five partner to Africa—no other country matches this level of engagement.
The China-Africa relationship has ramped up over the past decade with trade growing at around 20 percent per annum.
FDI has grown even faster—at an annual growth rate of 40 percent. China’s financial flows to Africa are 15 percent larger than official figures suggest when non-traditional flows are included. China is also a large and fast-growing source of aid and the largest source of infrastructure financing, supporting many of Africa’s most ambitious infrastructure developments in recent years.
Chinese firms are market-driven and investing for the long-term
Operating across many sectors of the African economy, in addition to manufacturing, a quarter is in services and a fifth in trade and in construction and real estate.
Chinese firms already handle 12% of Africa’s industrial production—valued at $500 billion a year in total. In infrastructure, Chinese firms’ dominance is even more pronounced, having cornered nearly 50 percent market share of Africa’s international EPC (engineering, procurement and construction) market. Chinese firms are making healthy profits. Nearly a quarter of the 1000 firms surveyed said they covered their initial investment within a year or less. A third recorded profit margins of over 20 percent. These firms are agile and quick to respond to new opportunities. They are primarily focused on serving the needs of Africa’s fast-growing markets rather than on exports. Chinese firms have made investments that represent a long-term commitment to Africa. Of the Chinese firms surveyed, 74 percent said that they are optimistic about their future in Africa.
Clear benefits, but challenges must be addressed
The report points to three main economic benefits to Africa from Chinese investment and business activity:
Job creation and skills development: Of the 1,000 firms surveyed, 89 percent of the employees are local. The research suggests that Chinese firms employ several million Africans. Nearly two-thirds of Chinese firms provide skills training to their workers.
Transfer of knowledge and new technology: Chinese firms are modernizing African markets by introducing new products and technologies. Some 48 percent introduced a new product or service and 36 percent have introduced a new technology in the last three years.
Financing and development of infrastructure: When asked what they value most from their Chinese partners, for some 50 African public-sector leaders, low-cost financing and improved infrastructure topped the list. They cited Chinese firms’ efficient cost-structures and speedy delivery as major value-adds.
While on balance, China’s burgeoning partnership with Africa is a positive for Africa’s economies, governments and workers, there are areas that need significant improvement:
Local sourcing: By value, only 47 percent of Chinese firms’ sourcing was from local African firms, which is lost opportunity for these firms to benefit from Chinese investment.
Local managers: Too few locals are in managerial positions—only 44 percent today.
Pain points for both sides: Chinese firms cite personal safety and corruption in some countries as their top concerns. For African leaders, language and cultural barriers are pain points. There have been instances of labour and environmental violations by Chinese firms.
Maximising the impact of the partnership
Kartik Jayaram, a senior partner and co-author of the report said, “Chinese engagement with Africa is set to accelerate—by 2025 Chinese firms could be earning revenues worth $440 billion, from $180 billion today. Additional industries could be in play for Chinese investment, including technology, housing, agriculture, financial services and transport and logistics. However, to unlock the full potential of the China-Africa partnership, we have identified 10 recommendations for Chinese and African governments as well as the private sector. To highlight two key ones—African governments should have a China strategy and the Chinese government should open financing and provide guidance to Chinese firms.”
Few African countries have a clear strategy and engagement plan for China. Governments should develop such strategies, linked to national plans and priorities. They should also cultivate capabilities in their bureaucracies to support these strategies.
Opening Chinese government financing and providing guidance on responsible business practices to Chinese private sector firms in Africa would accelerate sustainable investment.
By Adedapo Adesanya
The Multilateral Investment Guarantee Agency (MIGA), a World Bank financer, is ramping up efforts to unlock private capital for Africa, with plans to more than double its annual guarantee issuance on the continent to $6.4 billion over the next three and a half years.
The move is expected to catalyse as much as $23 billion in private sector investment across key sectors, including energy infrastructure, food security, trade finance, digital connectivity and sovereign debt restructuring.
The expansion underscores a growing shift among development finance institutions toward deploying guarantees as a primary tool for de-risking investments in frontier markets and attracting private capital flows into economies often viewed as high-risk.
MIGA’s Managing Director, Mr Tsutomu Yamamoto, said the scaled-up programme would play a critical role in mobilising investment, creating jobs and strengthening economic resilience across African countries.
He noted that the agency’s instruments, ranging from political risk insurance to credit enhancement, debt swaps and portfolio guarantees, are designed to reduce investor exposure and improve project bankability.
The guarantee push will continue to focus on strategic sectors such as power grids, local banking systems, agriculture and food supply chains, as well as digital infrastructure, all of which are seen as foundational to long-term economic growth across the continent.
Although the agency did not disclose specific projects in its pipeline, it said the expansion reflects rising demand for risk-sharing mechanisms in emerging markets, particularly as governments grapple with tight fiscal conditions and limited access to affordable financing.
The development follows a broader restructuring within the World Bank Group nearly two years ago, which consolidated guarantee operations to scale up private sector investment mobilisation globally.
MIGA has already played a role in pioneering debt swap transactions in the Ivory Coast and Angola, while also supporting food security initiatives in Kenya and backing more than 100 energy projects across emerging markets. Its guarantees have further underpinned lending operations in countries such as Ghana and Zambia, helping to stabilise financial systems and sustain credit flows.
The agency’s latest push reflects a wider evolution in development finance strategy, where guarantees are increasingly used to stretch limited public funds and crowd in private investors. By lowering perceived risks, these instruments make large-scale infrastructure and development projects more attractive to commercial financiers who would otherwise stay on the sidelines.
This shift is gaining urgency as many advanced economies scale back aid budgets while simultaneously seeking stronger economic ties and resource access in Africa.
In response, multilateral lenders are leaning more heavily on innovative financial tools like guarantees to bridge funding gaps and sustain development momentum.
MIGA’s broader ambition is to help lift the World Bank Group’s global guarantee issuance to $20 billion annually by 2030, positioning guarantees as a central pillar in financing sustainable development across emerging markets.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange further appreciated by 0.58 per cent on Tuesday, May 19, buoyed by strong investor appetite for unlisted securities.
Data from the bourse showed that the volume of securities traded during the session ballooned by 365,661.8 per cent to 1.9 billion units compared with the previous day’s 514,142 units, as the value of transactions surged by 30,433.9 per cent to N5.3 billion from the preceding session’s N17.4 million, and the number of deals increased by 22.2 per cent, as these trades were executed in 60 deals versus the 27 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc ended the trading session as the most traded stock by value on a year-to-date basis, with the sale of 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and Central Securities and Clearing System (CSCS) Plc with 60.9 million units exchanged for N4.1 billion.
GNI Plc was also the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units sold for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
During the session, there were three price gainers and one price loser, led by Afriland Properties Plc, which went down by 5 Kobo to trade at N16.90 per share versus the previous day’s N16.95 per share.
But FrieslandCampina Wamco Plc appreciated by N12.45 to N151.79 per unit from N146.55 per unit, CSCS Plc expanded by 62 Kobo to N70.62 per share from N70.00 per share, and UBN Property Plc added 20 Kobo to close at N2.24 per unit versus N2.04 per unit.
At the close of business, the NASD Unlisted Security Index (NSI) rose by 24.05 points to 4,157.75 points from 4,133.70 points, and the market capitalisation chalked up N14.39 billion to close at N2.487 trillion compared with Monday’s N2.473 trillion.
By Adedapo Adesanya
The Naira further depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, May 19, by 17 Kobo or 0.01 per cent to trade at N1,373.87/$1 compared to the previous day’s N1,373.70/$1.
However, the domestic currency appreciated against the Pound Sterling in the same market window by 5 Kobo to close at N1,839.61/£1 versus Monday’s rate of N1,839.66/£1, and gained N5.97 against the Euro to settle at N1,594.52/€1, in contrast to the preceding session’s N1,600.49/€1.
Data from GTBank FX bench showed that the Naira appreciated against the US Dollar yesterday by N2 to sell at N1,381/$1 versus N1,383, and at the parallel market, it remained unchanged at N1,390/$1.
The outcome across the board came as Nigeria’s external reserves have shown signs of improvement in recent weeks, which may provide some support for FX market interventions by the Central Bank of Nigeria (CBN) and broader macroeconomic stability efforts.
Currency traders and investors are expected to continue monitoring CBN policy direction, foreign portfolio inflows, crude oil earnings, and external reserve performance as key indicators influencing the naira’s trajectory in the coming months.
The Monetary Policy Committee (MPC) meeting began on Tuesday with announcements of decisions expected later on Wednesday after inflation ticked up in April.
In the cryptocurrency market, major digital coins were down as traders focused on macro data, oil prices, and inflation, while the US Senate advanced a measure that could force President Donald Trump to seek congressional approval for the Iran war.
Ripple (XRP) went down by 1.3 per cent to $1.36, Dogecoin (DOGE) slid by 0.9 per cent to $0.1034, Cardano (ADA) dropped by 0.7 per cent to $0.2499, Ethereum (ETH) declined by 0.5 per cent to $2,124.02, Solana (SOL) depreciated by 0.5 per cent to $84.67, TRON (TRX) dipped by 0.4 per cent to $0.3551, and Binance Coin (BNB) slumped 0.1 per cent to $641.39.
On the flip side, Bitcoin (BTC) appreciated by 0.3 per cent to $77,114.20, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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