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Outbreak making Chinese investors skittish
Publication Date : 21-08-2014
With the rapid spread of Ebola in four African countries - Guinea, Sierra Leone, Liberia and Nigeria - concern has risen about the safety of travelling, living and investing in those countries. Inevitably, these economies are facing tough challenges.
But more worrisome for economists and investors is the size of the economic impact if a truly large-scale epidemic breaks out in Africa's most populous country, Nigeria. It is also the biggest economy on the continent with gross domestic product of $510 billion and a growth rate of 6.8 percent in 2013.
Prospects for long-term investment are stable, but the epidemic may cause short-term uncertainty, according to Chinese entrepreneurs in Nigeria.
"We are confident about the health system in Nigeria, and we know the disease will surely be brought under control," said Xue Xiaoming, vice-chairman of the Chinese Chamber of Industry and Commerce in Nigeria.
Xu added that all cases in the country were confined to a small circle of people who had contact with patients. "If all the patients are isolated from the public, the country will be absolutely safe," he said.
The death toll in Nigeria rose to five on Tuesday, Health Minister Onyebuchi Chukwu said.
The World Health Organization said the total international death toll from the virus has reached 1,229.
Xue said he has received numerous queries from potential Chinese investors, many of whom have put their plans in Nigeria on hold.
Chinese investment in the nation runs the gamut of sectors from commodities to manufacturing, infrastructure construction and resources. After Nigeria became the biggest African economy earlier this year, economic cooperation with China was expected to expand swiftly.
"But Ebola has cast a shadow over new possible investment from China," Xue said.
Bilateral trade has surged during the past decade, reaching $13.6 billion in 2013, five times bigger than the figure in 2005.
"Also, Nigeria was the first African country to use the yuan as an official reserve currency, so the prospects for Chinese investment have been looking promising," he said.
Xue said Ebola would not affect existing Chinese investment in Nigeria because there has been smooth communications related to Ebola between local authorities and Chinese investors.
But news about the outbreak has many potential investors on edge.
Many have suspended investment plans after hearing that some international carriers such as Emirates Airlines, Korean Air and Kenya Airways have halted flights to affected countries, he added.