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OPINION: China's consumer driven policy in Africa

PUBLISHED: Mon, 24 Oct 2016 15:31:01 GMT

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Between 1886 and 1994, British countries scrambled and colonised African countries making them protectorates of their own advancement into the once ‘dark continent.’ Had China been as big as it is at the moment and with this post-colonialist advancement in the last decade, Africa could have gracefully yielded to colonisation by China without a fight and could have been a force to reckon with.

Since Colonisation, Africa has been dragging behind other continents economically, with its GDP standing at 2.2 trillion dollars in 2016 compared to Europe at 19.1, Asia at 25.0 and North America at 21.7 according to statistics by the International Monetary Fund. This slowdown has been attributed to the extraction policy used by European settlers rather than settling in the continent in large numbers to contribute to the establishment of institutions and economic structures, and thus development.

Instead, extraction was used to source minerals and raw materials in the continent for the development of Europe. It is with such a policy that West Africa to this date struggles to make ends meet economically, with ‘colonial debt’ still paid by French colonies in Africa through the ‘colonial pact’ that requires countries to put 65% of foreign currency reserves in the French treasury and 20% for financial liabilities, which sums up to 500 billion dollars annually, giving these African countries direct access to just 15% for development annually.

It is this extraction policy that focused on economic value over the standards of living that has come back to haunt the European contribution to Africa as China comes forward with its ‘consumer driven policy’, which seeks a mutually beneficial alliance. This is coupled by a non-interference policy adopted by former Chinese President Jiang Zemin in 1996 which prevents the country from interfering in the domestic affairs of African countries. In contrast, African countries continue to push back European and Western countries on foreign policy, unsuccessfully trying to draw the lines of association.

Over these developments, China has been investing two billion dollars into Africa annually with a further promise of 60 billion dollars’ worth of investments into Africa through loans, export credits and development funds. This has been welcomed by African countries through a Memorandum of Understanding with the African Union and bilateral agreements which include trade pacts with African economic zones and countries. Again in contrast, the European Union has been struggling to get East African countries to sign the EU-EAC trade deal terming it unfair to East Africans while it plans to pool in just USD47.9 billion in its External Investment Plan in Africa.

China has also overtaken United States as the largest economy, attributed to its diversification of investments in traditional areas as well as new areas, i.e. Africa. China’s investments abroad are estimated at USD531 billion and it is expected to surpass the USA by 2020 as the largest external investor. China will then be Africa’s largest trading partner with a trading volume of USD166 billion, expected to reach USD1.7 trillion in 2030. In traditional markets, China would then have edged past the US as the top crude importer to 8.04 million barrels a day compared to 7.98 barrels per day by the US recorded at the end of September 2016.

China’s popularity in Africa is on the rise as the Eastern nation is seen to balance economic progress to better standards of living without interference with domestic issues. Also, China’s approach towards skills transfer and active participation in African projects sets it apart from the West and European countries as a contributor to Africa’s development. In 2015, China undertook 14% of the major projects in Africa, while actively taking part in 31% of 51 major projects in East Africa.

Africa has grown by 34% and Asia by 106% by GDP according to records by the International Monetary Fund and the CIA World Factbook between 2010 and 2016. As much as these two economies lay nowhere near each other the correlation in exponential growth between the two compared to Europe’s 1.6% growth over the same period, leaves a lot to be expected between China and Africa in bilateral development. 


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