Post-colonial Africa is often viewed as the hamlet of civil wars, inimical epidemics and venal regimes that have aggravated endemic poverty, a perception that has led to post-Cold War Afro-pessimism/Afrophobia and to Africa’s downgrading, a subject of concern for developed world policy-makers and investors. This is so even though Africa is the second largest continent, with the fastest-growing population: 1.4 billion by 2020 and about 20 percent of the world’s people. Despite this grim fact and understanding, there is the indecorous burden arising that most of the continent’s population is surviving at or below a generally studied poverty level of minus or one dollar a day.
With the advent of Chinese inward activity in Africa, questions are being asked as to the actual motive behind this renewed surge in the South-South international relationship. There is no doubt that a boost to the economy, increased investment, etc. of the Chinese magnitude is positive for the continent, Africa, which trails the rest of the world in achieving the Sustainable Development Goal (SDG) agenda (2030). China’s Policy, activity and responses to what is ostensibly a boon have been carefully and comprehensively tailored to promote and facilitate sustainable development in a region that is fragile socioeconomically.
For over 50 years, China has been involved with Africa in almost all sectors – agriculture, construction, culture, development, etc. Business and trade relationships with China have been increasingly accompanied by friendly gestures that have led to construction of infrastructure and the provision of tangible aid packages, including giga-projects on the African continent. The most prominent of undertakings is the iconic Tanzania-Zambia Railway project (TAZARA) which stretches almost 1,860 kilometers and cost about US$ 600 m at that time. On the other hand, from the period of colonisation till now, the West’s relationship with Africa has been in the form of aid, grants, debt, etc., that breed corruption and leave a legacy of incompetence. With reference to China’s success in dealing with African countries, Chinese firms can in any case be expected to secure many construction contracts given their ability to bid at low prices and execute contracts without delay. In Botswana, for instance, the Chinese now win 80 per cent of the contracts that they bid on. Their winning bids are based on low labour costs and profit margins and a quick project turn-around.
Also, the development of China-Africa economic and trade relations is conducive to global economic stability. In recent years, Africa's economy has developed rapidly, and its overall appearance has significantly changed. Africa has excellent business opportunities and has gradually become China's third-largest overseas investment market as an emerging market.
Notwithstanding, Africa’s urban growth is set to move at a tremendous rate and scale between now and 2050. By 2035, over 50% of the continent’s population will be living in cities; by 2050 the urban population will be twice as large as it is today. In Africa’s biggest city Lagos alone, growth is projected to be the equivalent of 77 people moving there each hour between now and 2030. This speed of urbanisation is nearly unprecedented – except for one other place: China. Forty years ago, 80% of China’s population was employed in rural agriculture. Today, 60% live and work in cities. Within a short period of reforms to open up China’s economy after 1978, approximately 50 million people moved out of rural agriculture and into cities.
With the integration of China into the world economy gaining momentum, it is ever more desirable that the economies in Africa be positioned to tap into and utilise the experiences that China has accumulated to date. China’s phenomenal rate of growth, its hunger for natural resources, its ever growing economic and political power ensure that it will re-shape the world economy and influence the rules of the game for now and in the not too distant future.
Notwithstanding, for the first instance, the impact of China cooperation includes multiple aspects, including employment, increasing residents' income, and reducing poverty. The impact on inclusiveness is to play an indirect role through other factors, and to increase residents' income through spillover effects such as promoting technological innovation. China's foreign direct investment enterprises have improved the quality of human capital of the labour force through the technical training of labourers that can obtain more substantial competitiveness and higher income. Meanwhile, the impact of poverty reduction is achieved by promoting economic growth. Governments collect taxes from enterprises established by Chinese FDI, increase fiscal revenue, and provide the public with services conducive to poverty reduction.
China has increased its aid to Africa, it does so without explicit conditionality and with leniency. By the end of 2016, China contrastingly had already signed debt relief agreements with over 33 African countries. In addition, preferential loans for African countries have been used to develop infrastructure, purchase technological equipment and establish production enterprises. China has invested in more than 800 aid projects in Africa over the past 50 years, including 137 in agriculture, 133 infrastructure projects, etc. From the perspective of China, increasing investment in Africa is conducive to obtaining new production capacity cooperation opportunities. But, from the perspective of Africa, China's direct investment can inject new funds into Africa's economic development. China's government policies will help African countries alleviate the employment problem, helping to solve African countries' poverty problem and making the relevant planning in the United Nations Sustainable Development Goal for world poverty alleviation a reality.
Currently, the benefit to Africa is obvious and the prospects for further improvement are bright.
Also, the parallels between Africa and China’s urbanisation trajectories could offer policymakers potential policy design lessons. Some of China’s recent successes in managing urbanisation, if adequately adapted to the unique and diverse African context, could potentially help the continent’s burgeoning urban growth become more sustainable and equitable. Although similar in pace and scale, China and Africa’s urbanisation experiences have had very different outcomes. China’s urbanisation has been accompanied by industrialisation, productivity growth and ultimately, economic growth for the whole country. Between 1978 and 2009, the country’s aggregate GDP grew on average by 10% annually: the equivalent of doubling the national income nearly every seven years. Across most of Africa, however, despite rapid urbanisation, industrialisation has been largely limited, and so has economic growth.
Given the recency and similar trajectories of the two regions – China’s shift to urbanisation came not too long ago and Africa is still relatively new in its urban transition. Therefore, African policymakers can learn from the Chinese experience. It is, of course, clear that Africa and China are very different: Africa is a large and diverse continent made up of 54 countries, while China is one country, albeit a very large one with subnational economic and institutional variation. Each country has its own specific economic, geographical, historical and institutional compositions. Thus, it is only expected that there is no single policy approach that can be drawn upon and that will work for an entire continent.
Lastly is about policy experimentation and scaling. One of the most pertinent areas where Africa can look to for guidance is in the way the Chinese national government empowered its cities to experiment and take risks in developing policies to better meet the needs of their local contexts. These policies include, for example, effective decentralisation, not only of administrative but of fiscal functions as well.
Local public officials in China were incentivised to experiment and their performance was monitored closely. This has led to some very successful outcomes, which have subsequently shaped much of the Chinese development process.
Across Africa, this type of decentralisation may be present on paper but has not been completely implemented in practice. In 2010, therefore, Kenya decided to institute a new Constitution with an aim of ensuring the actual implementation of a decentralised governance structure. In both countries, changes in fiscal relations between the central and local governments have impacted the incentives faced by the latter and the resources available for pursuing their goals. Like China’s decentralisation reforms unleashed the actions of frequently formidable "local developmental states”, Kenya’s decentralisation has created fiscal balance between national and county governments that have been favourable for development.
In a nutshell, China is forging deep economic relationships with most African countries with the aim of securing access to their vast natural resources. There already exist political and military ties dating back over 50 years. Given the plight of Africa as the last business frontier, there is evidence that the parties complement each other and use their resources for sustainable development in the best way possible.
Increasing cooperation for trade and investment between China and Africa could bring viable benefits to both. As Africa and China pursue the path of development and will have up to 40 per cent of the world’s population, it is crucial that both parties maintain a business and mutual understanding that will facilitate the sustainable development of their peoples. When businesses and frameworks for development are put in place, they can be followed strategically to permit both parties to participate effectively and constructively in Africa’s development. The significance of China’s relationship with Africa cannot be overemphasised. China-Africa economy has consistently maintained an average of 9 per cent growth over the past 25 years. It has uplifted over 300 million of its people from poverty and significantly increased incomes and is thus on course to achieving SDGs.
Therefore, the onus is on decision makers in African countries, the leaders in the private sector and development partners to establish a framework that can make the best use of the investment friendly terms of the bilateral and multilateral agreements that exist between China and Africa.
Derick B. Wesonga is a student passionate about policy and international relations