The partnership between China and Africa has now gone too far to ever turn back. Particularly in the areas of economic development, the two partners have become Siamese twins. It is now almost impossible to separate the duo economically.
But while cooperation between the two sides has been largely based between both governments’ commercial and diplomatic institutions, the Chinese private sector has been taking on an increasing role in the continent’s socio-economic growth and development.
The newly launched report, “Market Power and Role of the Private Sector: Chinese Investment in Africa” published by the China-Africa Business Council documents the two-decade economic cooperation between the two partners. Launched in Beijing on August 26, the document addresses topics including the history of Chinese enterprises in Africa – their development stages to the current prominence, and the role of these enterprises in the countries socio-economic development. The 136-page report also highlights the challenges in Sino-African investment cooperation during the period under review,
Chinese enterprises have made significant socio-economic impact in countries such as Nigeria, South Africa, Egypt, Angola, Zambia, Democratic Republic of Congo, Ethiopia, Kenya, Congo-Brazzaville, Ghana, Algeria and Tanzania. It is bound to get deeper into the continent with the construction of the Belt and Road Initiative which will open ancient international trade routes.
Chinese enterprises will play a crucial role in the growth of the African Continental Free Trade Area (AfCFTA), the continental trading bloc that was launched in January 2021. It is expected that Chinese enterprises will plug into the vast business opportunities that AfCFTA offers. China can also use this platform to explore the massive untapped potential in the continent’s services sector.
Significantly, the launch of the report comes in the background of the 2021 Forum on China–Africa Cooperation (FOCAC) to be held in Dakar, Senegal. African countries are hoping for more Chinese commitment in the growing relationship. Since the establishment of FOCAC in 2000, Sino-Africa trade has grown 20-fold. Between 2000 and 2019, trade between China and Africa was over US Dollars 200 billion.
The upcoming FOCAC will undertake a major audit of the “Ten Major Cooperation Programs” and the “Eight Major Initiatives” jointly formulated and implemented within the FOCAC framework in 2018. These include investments in infrastructure, manufacturing, mining, agribusiness and industrial parks.
Africa has a lot to offer. First, the continent is a massive market consisting of 1.3 billion people at the last count in 2018. The amount of goods and services needed by these growing population is stupendous, particularly the highly consuming youth. Almost 60 per cent of Africa’s population is under the age of 25 years old, making Africa the world’s youngest continent.
Africa also has some of the world’s rarest minerals and raw materials in vast quantities. These include diamonds, sugar, salt, gold, iron, cobalt, uranium, copper, bauxite, silver, petroleum and cocoa beans. This is an invaluable asset for any private sector both intracontinental and intercontinental. But Africa should leverage on this comparative advantage, something which China is exploiting for mutual benefit.
There are very fertile areas for Sino-Africa economic partnership in energy and hydro-power production, agro-processing, Information and Communication Technology, housing and sanitation, and transport. Much of this is happening through thriving Public Private Partnerships in many African countries.
China’s vaccine manufacturers are expanding their concerns in Africa at a time when the Western world is engaged in both vaccine hoarding and colonialism. Already, two major Chinese vaccine companies have established localized production lines in Morocco and Egypt, with more coming up in South Africa and Zambia. This is the kind of investment partners Africa needs in order to build its capacity to manufacture its own goods and work towards value addition and self-sufficiency.
Chinese firms are also encouraged to participate in the upcoming Africa Investment Forum set for November 17. Postponed in 2020 amid coronavirus concerns, this premier business event to be held in Johannesburg will be a showcase of the vast array of business opportunities across the continent. In the 2019 forum, the African Development Bank says that 57 deals valued at US Dollars 67.7 billion were tabled for discussions, out of which 52 deals worth US Dollars 40.1 billion secured investment interest.
Ultimately, Africa needs quality investment based on specific criteria. Any massive investment must enhance the resilience of national economies by building on local supply chains. Africa also needs investment that is socially responsible and environmentally conscious. Overall, investment in Africa must absorb the enormous trained labor force, improve the living standards of the majority in the continent and eradicate extreme poverty.
The writer is the Executive Director of South-South Dialogues, a Nairobi based research and development communication think tank.
