Fall out from the shot down:

The rise in China’s influence in Africa and the decline of the West

The African continent is increasingly becoming the global common hub for doing business. A continent which not long ago was described as a ‘hopeless continent’ have risen above all odds to actually show the potential that it posses. Not only is Africa attracting the world and depicting that it is capable to contain them, but increasingly from operators in Africa itself. Africa’s economic structural reforms have shown a strong resilient following the global economic crisis in 2008 by rebounding back very quickly since the last decade and going forward, looking more boisterous.

The economic fundamentals are clearly in favour of Africa and just what exactly do I mean by that?__I am talking about the potential, the capacity; the zeal and the robust economic posture of continental Africa. The numbers are clearly in favour of Africa with steadier exchange rates, robust commodity prices, increased private capital flows and modest inflation. Africa has got a very good fiscal story with debt to GDP ratios at the sovereign level which are no where near the burden of what is seen in Europe, United States and other parts of the world.

Exports are booming and export markets have become more diversified. Foreign direct investment has increased by a factor of six over the past decade. Private entrepreneurs have emerged as a dynamic force for change, driving innovation and transforming outdated business models. There is an emergent middle class, although its size is often exaggerated. For the first time in over a generation, the number of people living in poverty has fallen. Fewer children are dying before their fifth birthday and more are getting into school.

However, there is a growing schism globally about the relationship of Africa with the West (US) and China. I watch this debate with much enthusiasm and moreover, I expect this to be the case especially looking at the increasing awareness in and on Africa in the past decade.

Africa has had 50 years of development partnership with the West and even though still continues to, but really, there is not much change experienced on the continent. This has sent a lot of frustration shared by people not only on the African continent but by people in the West as well. Questions are been thrown at the West as to why after several years and several billions poured into Africa, there has not been a significant change on the continent. This and other questions are very legitimate to be tabled before both the donor west and recipient Africa.

The most intriguing aspect is that, Africans themselves are up on their toes and asking questions as to whether they are better off without the West/traditional donors or are there alternatives to this model. Can we as Africans form a different development partnership which can bring us the change that we so seek?

These questions have led Africa to sit at the same table with China, the new development partner. The China-Africa relation started dating back in the 1960s and 1970s. But really, the relation came to the fore in 2006 when 48 African leaders attended a joint forum in Beijing. The Forum on China – Africa Cooperation is the name of the meeting between the People’s Republic of China and the states of Africa. There have been five summits held to date, with the most recent meeting having occurred from July 19 – 20, 2012 in Beijing, China.

In 1980, the total Sino-African trade volume was US$1 billion. In 1999, it was US$6.5 billion and in 2000, US$10 billion. By 2005, the total Sino-Africa trade had reached US$39.7 billion before it jumped to US$55 billion in 2006, making China the second largest trading partner of Africa after the United States which had trade worth US$91 billion with African nations. In 2010, trade between Africa and China was worth 114 billion and in 2011, US$166.3 billion. In the first 10 months of 2012 it was US$163.9 billion. Currently, there are an estimated 800 Chinese corporations doing business in Africa, most of which are private companies investing in the infrastructure, energy and banking sectors.

At the level of attitude, China sees its interest in development as directly linked with Africa. Of course, that is what has necessitated for the constant engagement between African countries and China in the last decade. China has a huge population to feed; talk of potable water, arable land, oils, minerals etc. China therefore sees Africa as the best destination to meet the increasing demand domestically.

Nonetheless, since China began seriously investing in Africa, it has been routinely cast as a stealthy imperialist with a voracious appetite for commodities and no qualms about exploiting Africans to get them. It is no wonder that China has received criticism from all over, especially from the US and UK. Despite all the euphoria, China’s motives for investing in Africa are actually quite pure and very visible. The increasing infrastructure development is quite visible, and their quest to offer support to spur economic growth on the continent is a course worthy of mentioning. However, let not miss the point that, the West in their 50 years development partnership have their own approach. In a June 2012 White House paper on ‘U.S Strategy towards Sub-Saharan Africa’, the United States will partner with sub-Saharan African countries to pursue the following interdepen-dent and mutually reinforcing objectives: strengthen democratic institutions; spur economic growth, trade, and investment; advance peace and security; and promote opportunity and development.

Africa needs China’s investment; we need jobs, trade, we seek something new to happen. But the point really is that, we need development and that is why the case about which quarters development emanates from is not really something we have to worry about. It can come from China and or the West.

ABOUT THE AUTHOR

Paul Frimpong CEPA Chartered Economist (ACCE-Global) who writes on the macroeconomy and global affairs. He is also an African Affairs Analyst

Tel: +233 -241 229 548 Email: py.frimpong@yahoo.com/py.frimpong90@gmail.com

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