On Thursday 5 November ARI hosted a talk by Professor Robert Rotberg (John F Kennedy School of Government, Harvard University). He argued that the “Africa rising” narrative will shift to “Africa stagnating” if pessimistic predictions about China’s economic slowdown prove correct. Here are 7 key takeaways from the talk:
- Nothing is more important to the future of Africa than the future of China. Africa’s population is projected to grow rapidly, more than doubling to 2.5 billion by 2050. To benefit from this and secure a demographic dividend, Africa is reliant on China as the major buyer of its natural resource exports. As China’s economy slows it will produce and import less. This is already having a marked impact on countries like Zambia which is reliant on copper exports for 86% of its revenue.
- If China’s GDP growth slows to 5%, down from 6.9% this year, this spells disaster for Africa. With static or diminishing income from natural resources, countries that are not food self-sufficient – like Nigeria – will be have generate alternative foreign exchange revenues for that purpose. This issue is only going to become more acute given the demographic projections and Chinese land grabs in Africa. If China’s downturn is less pronounced, the consequences for Africa will be less severe.
- China has provided a lot of easy credit to African governments to build damns and other infrastructure projects. This has brought substantial benefits. However, many projects are being built using Chinese labour and this is a missed opportunity.
- To date, China has been disinterested in the political leanings of African governments when it comes to investment. It has supported the political elites of many of the most unequal countries, like Angola. In a sense, China is non-ideological: it is pursuing a mercantile rather than altruistic approach, extracting resources at the least cost and greatest benefit to itself. Nonetheless, it still wants to be seen as a major player in Africa and has increasingly sought to develop its soft power on the continent by teaching Mandarin, developing media outlets and opening embassies than the US or UK.
- China does not see Africa as an arena for global competition. The US, UK and former colonial powers welcome Chinese involvement, as it does things that are necessary but they are not prepared or able to do – like build big infrastructure, fast. Despite the recent Indo-African Summit India won’t pick up China’s slack anytime soon: it does not have the same growth needs.
- China’s engagement in Africa does have some rough edges. It fails to employ Africans to carry out infrastructure projects, there is a lack of technology and skills transfer to local people, and growing competition between Chinese and African small traders has devastated domestic manufacturing. Support for highly authoritarian regimes also comes at a cost for citizens.
- Xi Jinping’s recently launched corruption drive at home, which led to the detention of Sam Pa, a renowned Chinese investor in Africa, might have wider impacts. It is difficult to know yet whether this is part of a political purge within the Chinese Communist Party or a wider crackdown. Private Chinese companies in Africa cannot operate without official state support. So if it is about tackling corruption at large then the impacts for investment in some African states will be sizeable.
Here are links to some recent articles that complement Professor Rotberg’s narrative or present alternative points of view:
- Deborah Bräutigam’s new book “Will Africa Feed China?” reveals the real story behind allegations of large-scale Chinese land grabs on the continent. A review is available here
- The Mail & Guardian Africa’s Christine Mungai and Charles Onyango-Obbo looked at the impact China’s economic slowdown might have on countries like Angola, Nigeria and Zambia, and on specific sectors like trade and technology
- In the Financial Times, Aubrey Hruby suggested that China’s economic slowdown is an opportunity for Africa to address longstanding economic inefficiencies; and incoming Africa Editor David Pilling argued that China-Africa relations are about more than just raw materials
- Amadou Sy of The Brookings Institution provided a nuanced and accurate picture of China’s direct investment in Africa and scrutinised the facts and fictions behind Chinese land grabs
- In conversation with The Washington Post, Howard French looked beyond the “trade not aid” rhetoric to explore the complexity of Sino-African relations
- JR Mailey, writing for African Arguments, provided analysis on the recent detention of Sam Pa, the Chinese tycoon renowned for striking deals with the most authoritarian of African governments
- IIED’s Xiaoxue Weng discussed China’s impact on Africa’s informal economy, a topic also addressed in this book review of Margaret C Lee’s “Africa’s World Trade”
Pictures:
Podcast: