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Kenya is East Africa's hub with the main Indian Ocean port in the coastal city of Mombasa.

Africa

Africa emerging as hub for Chinese manufacturing firms: expert

NAIROBI, Kenya Jan. 20 (Xinhua) — Africa is emerging as a hub for Chinese manufacturing firms seeking opportunities to expand their markets, an economic analyst said on Tuesday.

Churchill Ogutu, head of research at Kenya’s investment bank, Genghis Capital told Xinhua that as the Asian nation’s economy matures, it is shifting its focus towards high technology products hence some firms are relocating to Africa.

“We are seeing a trend where more Chinese manufacturing firms are setting up base in Africa to produce for local and regional markets,” Ogutu said when Genghis Capital released a report themed “Navigating the Now Normal” that delves into Kenya’s investment landscape for 2021 in the wake of the unprecedented crisis last year.

Ogutu said that rising labor costs in China means that the Asian nation is losing its traditional competitive edge in low technology products.

“China is therefore shifting towards more advanced products and this creates an opportunity for Africa to expand its manufacturing base,” he said.

Ogutu said that goods that were once imported from China are now being made in Africa and this has resulted in positive multiplier effects for the continent.He observed that Chinese entrepreneurs are filling a gap through import substitution that is creating employment for Africans.

“Africa is a virgin market and I don’t see the trend of new Chinese manufacturing dissipating in the future,” he added.

He revealed that the entry of Chinese firms into Kenya has also led to the widespread access of affordable commodities locally which is a plus for the economy.

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