How Africa Can Benefit From Its Growing Relationship With China

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VENTURES AFRICA- In recent times, China’s economic presence in Africa has become one of the continent’s economic biggest stories especially with its contribution in trade and infrastructure building. China’s growing presence in Africa is part of a rapidly changing reality that presents enormous opportunity.

All over the continent, China has built roads, railways, ports, airports, and more; filling a critical gap that western donors have been shy to provide while unblocking major bottlenecks to growth. The rehabilitated 840-mile Benguela railway line, which now connects Angola’s Atlantic coast with the Democratic Republic of Congo and Zambia is one of several investment in Africa by the Asian tiger.

However, in as much as china has invested in the continent, economic analysts have questioned the motives of the Asian tiger on the continent – whether it is has a good or bad influence. While some argued that China’s strategy is self promotional, others maintained that its move is strictly neutral and business-oriented.
In an article written by Peter Eigen, the founder and chair of the Advisory Council, Transparency International and chairman of the Extractive Industries Transparency Initiative; suggestions were made on the how Africa can benefit more from its growing relationship with China.

Eigen who is also a member of the Africa Progress Panel, chaired by Kofi Annan suggested that African countries could diversify their economies by shifting away from supplying unprocessed natural resources to China. This will make the continent less dependent on the vagaries of both the Chinese economy and the ups and downs of global commodity prices. Meanwhile, African nations should also prepare for the day when they no longer have natural resources to sell.

Another way Africa can benefit from its growing relationship with china is to encourage Chinese investment into more labor intensive sectors.

Eigen said since Africa’s population is growing faster than anywhere else in the world with job creation a top priority; Africa can leverage on China’s relationship which is moving from being essentially government-to-government to business-to-business. Giving an example of Zambia, where some 300 Chinese companies now employ around 25,000 people and the Ethiopian shoemaking sector which has created jobs and exports as a result of Chinese investment; Eigen says economic enormous potential abound in the manufacturing industry, especially for clothing and textiles.

Furthermore, African countries could negotiate better terms with Chinese investors, including quality control and better linkages with local economies. This can be done with African governments urging China to improve market access for African goods overseas, like in the World Trade Organisation.

He further argued since job creation is a priority issue for Africa development, working conditions for African laborers should be improved in Chinese projects on the continent.

Finally, since the increasing growth in Africa population signifies it as the future largest consumer market in the world, further regional economic integration should be considered to increase the market access by investing in a single country, Chinese businesses will want to invest much more.