The Council on Foreign Affairs recently published a piece on the controversial business practices of China in Africa. It highlighted the growing anti-Chinese sentiment due to increasing exploitation and monopoly in some industries. The report quoted the likes of former Zambian president, Michael Sata, and erstwhile Nigerian Central Bank governor, Sanusi Lamido, on the disadvantages of Sino-Africa relations. However, the critics fail to admit China’s necessary economic involvement in Africa and the need for individual African countries to evaluate their engagement strategy with China to maximize benefits.
Before China and Africa improved their trade agreements in the 1990s, which boosted economic gains between the two to over 700 percent, the majority of Africa’s trade relations were with European Union member states and North America. Still, modern Sino-Africa relations are barely 30 years old but Africa has achieved equitable transformation greatly surpassing the 56-year standing partnership with the West.
This transformation is evident in the maturity of economic opportunity cap in Sino-Africa relations to over $440 billion within this short period – the largest Africa has had since 1960. And presently there are more than 10,000 Chinese firms in Africa, 30 percent of which are in manufacturing with more than 90 percent in private hands.
Chinese businesses have also helped reduce the rate of unemployment by a significant margin.
Nowadays, an average Chinese firm in Africa has at least 89 percent of its workforce comprised of locals, which used to average 44 percent with other countries. And there is a new opening for construction engineers and ordinary labourers almost every day due to the increasing demand for jobs by new and existing Chinese firms.
A recent report by the New York consulting firm, McKinsey & Company, summarizes these benefits when it remarks:
“In a mere two decades, China has become Africa’s biggest economic partner. Across trade, investment, infrastructure financing, and aid, there is no other country with such depth and breadth of engagement in Africa. The Chinese ‘dragons’ — firms of all sizes and sectors — are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent — and in so doing, they are helping to accelerate the progress of Africa’s ‘lions,’ as its economies are often referred to.”
China deserves these plaudits, but Sino-Africa economic relations are not without their problems.
Critics often tag them exploitative or ‘neo-colonial’, but the reality is that the majority of African countries have bad engagement strategies with China. This must change if Africa wishes to benefit more and keep China in check. For instance, African countries must not allow Chinese monopolies in any industry, irrespective of the trade-offs. The continent desperately needs competition to achieve better service quality at cheaper costs; blocking potential competitions would be antithetical to this.
They must also significantly check corrupt officials who often grant Chinese mining firms illegal permissions to extract resources that may increase Africa’s revenue. There should not be much blame on the Chinese, since the average investor tends to explore the cheapest means for raw materials. Instead, more pressure should be put on African governments to reduce internal corruption.
China remains Africa’s biggest economic partner and leading source of foreign direct investment. The continent cannot afford to lose these benefits because of ignorant criticism. Presently, only South Africa and Ethiopia have strong engagement strategies, while others like Angola, Zambia and the Ivory Coast have highly-exploitative agreements with the Chinese. This must urgently change.
Author: Ibrahim B. Anoba is the Acting Executive Director of the African Liberty Organization for Development. A political economy pundit and Young Voices Advocate, Anoba is from Lagos, Nigeria. You can follow him on Twitter @Ibrahim_Anoba.