CADF Expands African Operations

Ashby Monk

China’s strategic, economic toolkit appears to be expanding. The China Africa Development Fund has opened a new 0ffice in Addis Ababa, Ethiopia, which will give the Fund a new base of operations for Eastern Africa.

The CADF has been very busy over the past three years; it is reported to have invested over $3 billion in 30 projects across Africa. As it looks to expand its African operations–it is set to receive another $2 billion from the China Development Bank–Ethiopa has strategic importance:

  1. The CADF already has close to $800 million invested in Ethiopia. So the new office will give the Fund the opportunity to keep an eye on some of its biggest projects.
  2. The new office is uniquely placed for political influence, as it will allow the CADF to cultivate relationships with a variety of African countries. Indeed, Addis is a “one stop shop for influence and access; it’s the Geneva of Africa” (according to a friend in the region). It is the home to several international institutions as well as the African Union Headquarters.

Here is what the CADF had to say about its location choice:

“…it is convenient for us. We can establish a communication scheme with [the AU] in order to reach the remaining countries of the region. So we think we will take full advantage of this office to facilitate investment to Ethiopia and other African countries.”

Interesting, but not surprising that the Chinese Fund would associate commercial success in the region with political relationships at the AU.

3 Responses to “CADF Expands African Operations”

  1. 1 Judy Yeo April 27, 2010 at 12:33 am

    That politics and commerce/money go hand in hand is hardly new, a look at Britain’s colonial past is a primer in the subject? British East India Company may well have been a forerunner. Though admittedly it looks more like the predecessor of the government contractor than the SWF.

  2. 2 Ashby Monk April 27, 2010 at 7:51 am

    I didn’t mean to suggest it was “new”, Judy. High politics has always been hand in hand with high finance. I was just remarking on the CADF’s rhetoric about the utility of an Addis base of operations…

  3. 3 MMcC April 29, 2010 at 10:10 am

    I think the political linkage CADF makes is not going to go away any time. I haven’t been able to find annual report details from the fund but, going by public announcements and assuming, with low confidence, that the parts resemble the whole, the majority (perhaps greater than 80%) of the deals it has arranged have had Chinese SOEs involved. Perhaps CADF should be considered China’s first Reithian ibank…

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This website is a project of Professor Gordon L. Clark and Dr. Ashby Monk of the School of Geography and the Environment at the University of Oxford. Their research on sovereign wealth funds is funded by the Leverhulme Trust and The Rotman International Centre for Pension Management.

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