Tracing Chinese investments in SADC

Tiri Masawi

China has curved a niche in the Southern African Development Community (SADC) as the fastest rising single largest investor with an insatiable appetite for the regional bloc’s mining, retail, manufacturing and lucrative construction sectors.

The African Investment Report for 2016 confirms China as a significant player in the new African economic set up and the Asian giant is also keen on oil extraction across the continent.

True to the notion of plucking hanging fruits of their contribution to the liberation of the region by providing weaponry and morale support to most liberation movements in the region during the fight against colonialism, the Chinese, deemed an all-weather friend in SADC, are not missing out on any opportunities the region offers for business.

Lite Nartey (et al) in their publication titled Chinese Investment in Africa published in 2015 say the nature of Chinese investments in Africa has not been properly understood and generally covers about 50 countries.

“The level of Chinese investment in Africa cannot be understated. The impact of Chinese investment in Africa increased by 300 percent between 2008 and 2012 and continues to soar beyond. Much of the growth is based on increased exports by China. In 2015 China exported goods worth US$54 billion compared to US$21 billion by the United States of America,” Nartey and company said in their publication tracing Chinese investments in Africa.

Traditionally Britain, South Africa and Germany have maintained their grip on major investment opportunities in the SADC region but China’s drive for regional economic opportunities doesn’t seem to be abating and is poised to continue for a long time.

Arguably, the balance of trade continues to be skewed in the Asian giant’s favour with very little or not many SADC regional investors making inroads into the vast Chinese market. The little progress recently recorded is the penetration of regional minerals and meat products being sold to China.

Perhaps that has been the major bone of contention with most African business representatives who believe China needs to do away with protectionist policies and its market to African products and investors in a reciprocal manner as most countries in the legion have welcomed the Asian giant with open arms.

In fact, Chines President Xi Jinping proclaimed 2017 as the year of the dragon and judging by the continued proliferation of Chinese investors across the SADC region, that country is not holding back on its quest for growth in SADC. China has significant traces in SADC’s economy in the retail sector, manufacturing, energy, and mining and of late agriculture.

While the Chinese dragon is swinging its tail in the SADC region painting most industries from the Cape to Dar es Salaam red, it has not only been seen as a solace for an otherwise slow region in terms of industristrialiation and economic growth but a travesty on its own affecting local businesses.

Recent statistics show that China’s total investments in Africa as a continent are topping US$50 billion and significant portions of these investments which sometimes flow in the form of concessionary loans are flocking from Windhoek to Harare, Kinshasa to Ndola and Gaborone to Dar es Salam.

In Namibia, where China has significant investments in uranium mining and owns the world’s fourth largest uranium mine through Husab Mine and also a 25 percent stake in Langer Heinrich Mine, it has not been without its criticism especially from the local folk who believe that despite the country having solid cordial relation with Namibia since the days of the liberation struggle, Chinese companies have at times displayed questionable traits on labour practices.

China also creams off billions of dollars from the Namibian economy from the construction industry through joint ventures and individual company engagements and is currently driving the multibillion dollar expansion of the Walvis Bay Port which will have a significant impact on landlocked countries in the region such as Botswana, Zambia and Zimbabwe. Already the three countries are at advanced stages of construction of their dry port facilities at Walvis Bay.

In Zimbabwe, China was until recently deeply rooted in  diamond mining and the construction sector, while in Botswana Chinese traits are very visible in the construction and retail sectors. In Zambia the Chinese are deeply rooted in mining and retail, while in South Africa they have largely penetrated the retail and construction sectors while in the Democratic Republic of Congo the Chinese are gunning for cobalt and other rare minerals. The Chinese have also not been able to escape the wrath of these countries’ labour laws as they have been caught offside often times.

More vocal about an unparalleled Chinese dominance in the Namibian construction sector has been the chief executive officer of  the Namibian Chamber of Commerce and Industry (NCCI) Tarah Shaanika who in the past has called for partnerships with locals as a precaution to safeguard Namibian interest in some of the industries.

Chief among the NCCI reservations with the Chinese have been the continued dumping of counterfeit goods on the Namibian market and poor labour practices in some instances. Shaanika once reiterated that, “Chinese need to follow best business practices and also not be allowed to settle in sectors where locals can exploit business opportunities.”

The NCCI has been on record that there is a need for urgent remedies in line with infant industry protection laws that leave certain sectors for the local folks to thrive.

One of the chief concerns in Namibia has been the attitude by some of the Asians to blatantly disregard local labour laws and have they been found wanting on several occasions although their contribution to the economics of scale cannot not be hard done.

May 2017
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