China-Africa deals must be mutually beneficial
With political colonialism out of the way and the military might of the former USSR a thing of the past, there is no doubt that China is now seeking to consolidate its economic influence on the continent.
Put simply: China needs Africa and its resources.
It is a well-known fact that the Chinese economy has been growing in leaps and bounds over the past ten years and that the country urgently needs the raw materials that Mother Africa has. Oil is an absolute priority. It is available in relative abundance on our continent.
China’s state oil company, CNOOC paid $2.7 billion early this year to obtain minority shares in Nigeria’s oilfield. China is also pursuing exploration rights in Angola, Sudan, Equatorial Guinea, Gabon and Congo Brazzaville. In fact the three countries are already exporting a third of their oil to China.
Other minerals, such as copper and other metals form an important secondary market. China is already depending on Africa for iron ore, copper, platinum, timber and cotton.
Statistics indicate that trade between China and Africa has gone up from $3 billion in 1995 to $32 billion in 2005, making just 2.3 percent of China’s total trade with the world. China is however optimistic that trade between it and Africa can double by 2010.
China is also emerging as a new source of aid and investment. China invested $900 million in Africa in 2004, out of $15 billion investment the continent received. It has also cancelled several billion dollars of African debts.
At the recent Sino-African summit in Beijing, China promised US$ 1,9 billion in investments. This incorporates some 14 business deals, while other reports say that more than 2 500 separate deals were signed during the summit.
China also pledged to double its development aid and in order to boost trade and investments in Africa, said it would set up a special fund of five billion dollars, comprised of three billion dollars in low-interest credits and two billion dollars’ worth of export credits over the next three years. In addition, China said it would consider further debt forgiveness for poor African countries.
For us in Africa this is good news indeed, especially in view of the fact that the traditional development partners are seemingly developing a distinct “donor fatigue”. There are also stricter trade regulations and fewer products from Africa make it to European markets.
Although Europe remains Africa’s biggest trading partner, its share has dropped from 44 percent to 32 in the last ten years, with China catching up gradually.
Whereas Africa’s people were not wise in the ways of the Western world when the wave of colonialism flooded the continent in the 18th and 19th century and had little idea that the treasures of our soil were a serious incentive to the willingness of settlers to “compensate” our people for tracts of land, we have learnt.
We have learnt that the minerals and other treasures buried beneath our soil have a definite value ‘ so much, in fact, that nations are vying with one another for this wealth.
We have also learnt that nothing is for nothing. There have been many calls for international companies to plough back into the countries of activity.
China must also plough back. At a time when Africa is losing out to the developed world, it is virtually incumbent on China ‘ and the other countries that seek our mineral wealth ‘ to fully display social responsibility by not just investing in economic activities, but also in social upliftment, skills transfer and in bridging the digital and other divides that still hamper Africa in realising its true potential.
In African terms: If we are to be wooed, the suitors must be prepared to offer the traditional lobola.
Any matters of this magnitude must be a win-win situation for all concerned.
Africa should not be satisfied with anything less.