Opinion and Analysis

Africa should strive for more benefits from ties with China

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Posted  Sunday, March 31  2013 at  15:23
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That Chinese President Xi Jinping’s first foreign trip was to three African countries — Tanzania, South Africa, and Congo — shows how dearly the Asian Tiger values the continent.

Economic and trade cooperation between China and Africa has progressed steadily since the 1950s, both in scale and scope. In 1950, bilateral trade stood at $12.14 million, exceeded $10 billion in 2000, and soared to $200 billion last year.

By the end of 2012, China’s direct investment in Africa had accumulated to nearly $20 billion dollars, with 75 per cent going to such sectors as finance, processing and manufacturing, trade-related services, agriculture and transportation.

So far, more than 2,000 Chinese enterprises have invested in 50 African countries. In addition, Chinese construction firms are acquiring enormous construction contracts. Chinese products have flooded markets in Johannesburg, Luanda, Lagos, Nairobi and other cities, towns and villages in Africa.

The goods include clothing, jewellery, electronics, toys, bicycles, and even little things like matches, tea bags, and bathing soaps. African consumers like Chinese products because they are cheap. But the cheap, largely low quality products have been linked to killing African industries, particularly textile firms in countries such as Nigeria and Mali.

Unfortunately, the vast majority of China’s imports from Sub-Saharan Africa are primary commodities such as crude oil, metals, ores, wood, and cotton.

Africa’s focus on exporting raw materials and semi-processed commodities to China means poor returns on its resources. US Secretary of State Hillary Clinton recently warned against a “new colonialism in Africa,” in which it is “easy to come in, take out natural resources, pay off leaders and leave.”

Africa must develop its manufacturing sector and export finished products if it has to benefit more from its resources. The continent has also no choice but to commence deepening the almost non-existent intra-Africa trade.

So even as China continues on a charm offensive in Africa, it is time the continent’s policy makers re-thought the future of Africa’s love affair with the Asian Tiger.