Africa's Dream Of Feeding China Hits Hard Reality

Watching workers poke avocados from the treetops in an orchard owned by Kenyan agriculture firm Kakuzi, managing director Chris Flowers revels in the thought some might soon go to the crown jewel of emerging consumer markets: China.

Taking advantage of Beijing's deeper focus on trade with African countries to help reduce gaping deficits, Kenya struck an export deal with China for fresh avocados in January after years of lobbying for market access.

Six months later, no shipments have left, Kenya's avocado society, the East African country's plant health inspectorate and Kakuzi (KUKZ.NR) told Reuters.

While 10 avocado exporters have passed Kenyan inspections, China now wants to do its own audits and, based on the past experience of some other African fruit producers, it could take a decade to get the green light.

"You can actually have a market, but if you can't meet the standards, you can't take advantage," said Stephen Karingi, head of trade at the United Nations Economic Commission for Africa.

Reuters spoke to nine officials and businesses across Africa who said Chinese red tape and a reluctance to strike broad trade deals were undermining Beijing's plan to boost African imports.

Ramping up agricultural exports, however, is one of the few options many African countries have to rebalance their trade relationships with China and earn the hard currency they need to service mountains of debt, much of it owed to Beijing.

Take Kenya. Its annual trade deficit with China is about $6.5 billion and it has roughly $8 billion of Chinese debt. It needs nearly $631 million to service that debt alone this year, but that's almost three times its exports to China in 2021.

Many African nations now say they simply cannot afford more Chinese loans and must boost exports to China. In recognition of the need to address the imbalances, or at least stop them getting worse, China announced a shift in strategy in November.

At a China-Africa summit typically used by Beijing to unveil eye-popping loans, President Xi Jinping announced a raft of initiatives to boost China's imports from Africa to $300 billion over the next three years and $300 billion a year by 2035.

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Source: Reuters