By: Eruke Ojuederie
Africa, the once exploited continent of the world is now a choice business destination for world powers as the scrambles have intensified towards establishing relevance and stamping a huge footprint in the already expanding economies of the African continent.
The abundance of natural resources with which it has been endowed, has never been undermined but in recent times views are geared towards partnerships and worthwhile investments that will be beneficial to the developmental needs of nations. Experts say Africa is capable of sustaining the needs of growing economies throughout the world with proper planning and adequate funding. Resources such as metal like Bauxite used for aluminium, Platinum used for catalytic converters, Lab equipment and dentistry tool, Nickel used for batteries, Magnet and stainless steel, and so on, have been fingered as profitable resources which would be productive in growing economies, as well as the rest of the world, in the very near future.
China, the most populous nation of the world, has taken the mantle in this race as it has been a prominent player in Africa’s developmental process especially in recent times. The Chinese government has continued to seek new ways of doing business, building infrastructure, as well as investing money in different industries across Africa which cut across manufacturing, construction, finance and mining. A closer look at the prospects of China against that of Africa reveals an intertwined relationship. This is because, China faces a rather slow growth and a decline in workforce percentage which has lingered for over two years while Africa offers the potentials of rapid growth together with a growing young pool of low-cost labour and overflowing natural resources. During the last decade, China expanded trade with African countries tremendously. In 2012, total trade between China and Africa was $128 billion, compared to $100 billion between U.S and Africa.
According to World Bank records, the 2013 trade relations between China and Africa were summed to about $200billion with electronics goods and textiles flowing into Africa while natural resources were wheeled away to China. A proposed $750million was also put forward for agriculture and general development aid while $50million was given to support small and medium-sized business development. These loans seem an almost insignificant achievement since they are meant to be returned. However, with the Foreign Direct Investment, China has continued to debunk the arrays of blows dealt it in recent times as regards the genuineness of its focused investment projects in Africa. It would not be out of place to say that there is some form of exploit in the trade processes, since the bulk of raw material are extracted from the continent.
Among the list of projects undertaken by the Chinese, is the investment of about $6billion by the China National Petroleum Corporation in Sudan’s oil sector from which they hope to receive some crude oil. The China Power Investment Corporation has also invested $6billion in Guinea’s bauxite and alumina projects from which China Hongqiao Group Limited, the country’s second-largest aluminium producer, is to receive shipments of bauxite ore from this joint venture, its Chief Executive Officer Zhang Bo said. Privately-owned Huawei and publicly traded ZTE are now principal telecommunications provider in a number of African countries, providing services to their hosts and boosting their own economies, the purchase of 20percent of South Africa’s Standard bank by the Industrial and Commercial Bank of China for $5.5billion, as well as the registration of up to 580 Chinese companies in Ethiopia, operating with estimated investment capital of $2.2billion are also worthwhile alliances which have been made. These projects have contributed to various sectors of the Chinese economy, while enhancing trade development initiatives in Africa.
While commissioning one of the gas plants funded by the Chinese government, Mr Eliakim Maswi the Permanent Secretary of the Ministry of Energy and Minerals Tanzania said
“Not only will the projects ease shortages but they will also help the country to save money it has been spending to operate costly diesel-fired power plants”.
Other projects such as the China Railway Construction Corporation’s 1400 kilometer rail track which represents China’s largest overseas investment deal so far, and that of China’s Huajian Group a leading Chinese shoe-making factory which has commenced plans to invest US$2billion over the next decade to create a shoe-manufacturing company that will be capable of exporting to other African countries and possibly Europe, prove that Africa has arising to the tenets of the global business world by reliving the barter system of trading.
Despite these seeming successes, Neo-colonialism is one imminent danger which stares the continent in the face just like in the colonial era. These world powers still tactfully sap the continents resources for a meagre exchange. African leaders are yet to tackle these impending problems and seek better ways to conduct business like the rest of the world.
Although the Chinese government seems to be weighing its risk taking options as a result of the economic slowdown in the country, as well as the challenges faced in some of the African regions were projects are being carried out, Africans are optimistic that the ties with the Chinese will be a long lasting one while efforts to make the continent a more viable commodity, are on the way.