“A friend in need is a friend indeed”
Leading at the edge of Chaos:
What is making the relationship between China and Africa grow positively can be linked to when China showed up at the continent’s lowest point.
I will share some key highlights on the significance of the timing of China’s reinvigorated investment boom on the African continent. This set the path that has accelerated win-win cooperation between Africa and China.
The significance of when China showed up in Africa to provide the needed support has often been overlooked. More often than not, it’s lost completely in the Africa-China debate, and that is very intriguing.
A friend in need is a friend indeed.
Dating back to the 1990s through the early 2000s, the African continent experienced a plethora of crises that crippled the continent’s potential for growth and left millions in abject poverty.
Civil Wars:
Facilitated by the breakdown of the Soviet Union, the proliferation of arms found its way into the hands of rebel groups in Africa. This led to civil wars across multiple countries in Africa, such as Sudan, Chad, Liberia, Angola, and Rwanda (the Genocide of 1994), among others.
Equally prevalent were intra-state and cross border disputes such as Nigeria-Cameroon dispute over the Bakassi peninsula, Algeria-Morocco conflict over the Atlas Mountains, Eritrea-Ethiopia crisis etc. but to name a few
Diseases Burden
The continent did indeed go through a series of health crises. Many countries across the continent suffered from various kinds of diseases during this period, putting the entire continent in a high health-risk zone.
Debt Crisis
Following World War II, countries on the continent had little or nothing left to rebuild their economies. Through the Structural Adjustment Program of the World Bank, lots of these countries borrowed to rebuild their economies.
Unfortunately, various other negative incidents, such as political and civil crises, forced these countries into debt.
All these incidents of civil wars, diseases, and debt crises led to a huge humanitarian crisis, refugees, and a broken continent.
Hopeless continent and emergence of FOCAC
In May 2000, the entire continent of Africa was labeled “the hopeless continent” by the Economist magazine.
This, in many ways, was the broader sentiment shared by Europe and the West, led by the US.
Africa was seen as nothing less than a death zone and certainly not a place to do business or invest. The continent was used as a do-good-aid dumping ground.
What is significant is that it was at this point that the continent needed tangible investment and needed partners ready to help rebuild these economies.
As if these aspirations were not shared by African leaders enough. The traditional partners ignored the continent’s cry for investment and access to patient funding for infrastructure development and to build sustainable social programs that could lead to poverty reduction.
It was at this edge of chaos that China showed. And it showed up significantly through.
If you are a key follower of Africa-China relations in any form or shape, then you will probably be familiar with the term FOCAC—Forum on China-Africa Cooperation.
FOCAC, as it has become known, was established and first held in October 2000 in Beijing as a triennial platform to build cooperation between Africa and China across key areas of interest.
Twenty-two years later, FOCAC continues to serve its purpose as a platform for collective discourse on cooperation between Africa and China.
Juxtaposing the two scenarios: while in May 2000 the continent was labeled as hopeless, within that same year, China hosted the first FOCAC. One cannot overemphasize the significant of this enough.
Suitability of China for Africa
“To succeed in Africa, you need to be built for Africa”
Africa was unattractive to its traditional partners
The continent’s traditional partners, mostly western countries, did not see Africa as a place to do business. Little to no real investments were made during the 1990s.
While China came in and acted differently. Chinese FDI annual flows to Africa, also known as OFDI (“Overseas Foreign Direct Investment”) in Chinese official reports, have been increasing steadily since 2003.
China has been the largest investor in Africa over the last few decades. It’s imperative to note that between 2007 and 2020, China has made more investments in Africa than the next eight largest lenders combined.
Africa has a huge infrastructure gap
Annually and for over a decade, Africa has required a minimum of $100 billion to sufficiently close its infrastructure gap.
Countries across the continent are exploring bilateral, multilateral, and, until recently, the issuance of Eurobonds to finance infrastructure.
However, for over two decades, no country has invested more in Africa’s infrastructure development than China.
China’s two major foreign development banks invested $23 billion in infrastructure projects on the continent between 2007 and 2020. That amounts to $8 billion more than the combined contributions of the other top eight lenders.
Resources for infrastructure
Africa sits on huge and numerous natural resources. And after several decades, the continent has not been able to leverage these resources to engineer the kinds of growth it so requires.
The new approach of exchanging resources in order to secure long-term capital for infrastructure development is highly innovative and a genius model.
African countries, for the first time, can leverage on natural resources to build their economies without plunging themselves into debt crises and putting their economies at risk.
Cheaper alternative in infrastructure development
It’s an undisputed fact that China currently sits at the top of the list of countries with the ability, speed, and value for money when it comes to developing the infrastructure that is needed in Africa.
Africa can accelerate its infrastructure development more quickly and at a very high value for money with the support of China.
Equal treatment to all countries – Mutual Respect
For China, the size of the country does not matter when it comes to its relations and mutual respect. This is a core part of China’s foreign policy.
As it has become a tradition, each year Africa is first on the list of foreign visits since 2000 by China’s top foreign official (the Foreign Minister).
The same cannot be said of the continent’s traditional western counterparts. This act of respect by China for the African continent is very significant and has contributed to the level of positive relations between Africa and China.
A shared model of economic development
For most countries in the global south and Africa in particular, China’s economic model and success are inspiring enough. A country that has been able to lift over 800 million people out of poverty and become a beacon of infrastructure development globally.
Countries in Africa also need the same roads, rails, healthcare, quality and innovative education, manufacturing boom, etc. as China has successfully achieved.
This model of economic transformation and sharing of experiences is also making China an attractive partner for the African continent.
The growing momentum of mutual cooperation between Africa and China is not changing anytime soon.
To succeed in Africa, you need to be built for Africa. China has shown itself to be the most reliable partner seeking to build a win-win cooperation with the African continent.
About author
Paul is a development economist, top voice on Sino-Africa relations, and an award-winning entrepreneur.
He’s currently the Founder and Executive Director of the Africa-China Centre for Policy & Advisory.
The Africa-China Centre for Policy and Advisory is a Sino-African research and policy think tank and advisory firm headquartered in Accra, Ghana.
www.africachinacentre.org | [email protected]
