Synergy unleashes Africa’s economic power

By Mark Kapchanga Source:Global Times Published: 2015-12-2 22:23:01

Illustration: Liu Rui/GT


Barely a week after Africa hosted Pope Francis in a three-nation tour, the continent received another important guest, the Chinese President Xi Jinping.

The president has already made a rare stop-off in Zimbabwe en route for the South Africa summit. The visit is crucial at a time when the China-Africa cooperation is growing by leaps and bounds. Indeed, China is now Africa's largest trading partner, surpassing the US in 2009.

China continues to build roads, bridges and power plants across Africa. One such investment is the Standard Gauge Railway in Kenya that will open up the East African region to internal trade and investments. Moreover, in the coming years, the controversial Gibe III hydro-power plant near the Kenya-Ethiopia border will come online and will be Africa's largest hydro-power project, supplying energy to many eastern and northern African countries.

This week, African countries expect Xi to pledge more investments and development support in the continent despite the growing fears that the Chinese economic growth is slowing.

But this does not mean that all is glorious between the two regions. The summit provides a fertile ground for China and African countries to deliberate on sticky issues such as poaching, environmental degradation, alleged labor abuses issues by some of the Chinese firms as well as the rising insecurity in Africa that threatens Chinese investments.

From Boko Haram in Nigeria to Al Shabaab in Somalia, from Al Qaeda in the Islamic Maghreb to the Libyan Islamic Fighting Group, militancy continues hurting investments in Africa. Three Chinese were among 20 people killed in an Islamic extremist assault on a hotel in Mali two weeks ago, bringing to the fore questions of the role of China in supporting Africa's counter-terrorism efforts.

There is no question that rising terrorist threats in the continent in Africa will harm China's interests. Today, there are over 2,000 Chinese companies operating in Africa, and about 1 million people, most of whom are working in extractive industries and infrastructure development. This renders them prone to security threats because most of their operations are in the most remote parts of the continent with minimum security guarantees from the authorities. This is attested by the kidnappings of Chinese workers in Africa by local militias.

China has already acknowledged the undesirability of the security situation in Africa, and has publicly committed its support to the counterterrorism efforts by African countries. In May 2013, the Chinese ambassador to the UN called for the international community to offer its support to Africa in maintaining regional security.

Given the important role the African Union (AU) continues to play in regional security affairs, in recent years China has also been providing financial and technical assistance to the AU under the China-Africa Cooperative Partnership for Peace and Stability. While such assistance does not have a direct counterterrorism component, China needs to rethink its cooperation with African countries on this matter.

Another issue is that Africa's trade volume is only 5 percent of China's global trade total. A look further shows that Africa's exports to China are quite narrow, involving primary products such as crude oil, raw materials and resources, with a total value of about $95 billion. Yet Africa has massive potential in textiles, agriculture and tourism that need to be exploited further.

Ethiopia's leather industry is a classical example of the underlying economic potential in Africa. The country's leather industry has been growing fast in the past years. In 2012, leather exports stood at $123 million. By the end of this year, though, the government projects that the sector will have grown by more than five times to $500 million.

With African countries deeply disunited, it is crucial that they come together, and form economic blocs that would make them benefit from synergies.

The East African Community, the Economic Community of West African States and the South African Development Cooperation can be integrated further so that Africa would be able to widen its trade basket with China.

The author is a journalist on African issues based in Nairobi, Kenya. mkapchanga@gmail.com



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