Botswana, China sign economic agreements

Brian Benza
Staff Writer | Tuesday November 23, 2010 00:00

On Sunday, the two countries first signed an agreement on economic and technical cooperation with a grant of around six million dollars (P40 million).

The second was a MoU between Botswana Power Corporation and China Development Bank and Golden Concord Group on cooperation in infrastructure and energy development.

In 2007, the China Development Bank established a US$5bn venture capital fund, called the China-Africa Development Fund, through which they have already begun to partner for private equity deals done in Africa.

Apart from building the Morupule B power station, the Chinese, through the Industrial and Commercial Bank of China (ICBC) in partnership with Standard Bank are also part funders of the 600MW power project.

On the other hand, the Golden Concord Group is constructing a 300MW Mookane power station in which they have a majority shareholding with CIC energy being the other partner.

The third agreement signed on Sunday was also a MoU for financial projects between the Botswana government and the Export-Import Bank of China.

Xi, touted as China's next president, arrived in Botswana on Saturday, the last stop on his Africa tour, after visiting oil producer Angola, and South Africa.

Speaking during a luncheon held in honour of Xi on Sunday, Vice president Mompati Merafhe said that the MoUs were a clear demonstration of the fraternal friendship that exists between the two countries.

'I wish to assure that my government will do everything possible to take advantage of the programmes that we have put in place in order to enhance cooperation between our governments and our people,' he said.

According to Xinhua, the Chinese news agency, Xi spoke highly of the traditional relationship between China and Botswana, saying the marked progress in bilateral trade and economic cooperation has benefited both sides.

Xi put forward a three-point proposal on elevating bilateral ties, including enhancing mutual political trust, expanding trade and economic cooperation, and strengthening people-to-people and cultural exchange.

Xi left the country yesterday after visiting the Diamond Trading Company Botswana.

He also proposed that both countries strengthen coordination on climate change. Xi, among others, pledged that China would continue to provide scholarships and training programmes for students from Botswana.

China is on a charm offensive in Africa using its vast financial resources to invest heavily in energy, infrastructure and other sectors. China now does US$107bn of trade annually with Africa with major interests in Sudan, Angola, Nigeria, Niger and the Democratic Republic of Congo (DRC), and lesser interests in almost all the other African countries.

According to the Chinese Embassy, trade volumes between the two countries was at 360 million U.S. dollars in 2008 but slowed down to US$200 million in 2009 million due to the global economic downturn.

From January to August 2010, the bilateral trade stood at around US$179 million.