Big trouble in little Africa-Chinese presence and influence in Africa
Big trouble in little Africa-Chinese presence and influence in Africa
Prehistoric man was a wanderer. He obtained sustenance daily by going in search of food and slept anywhere night found him. But until men began to live in small settlements, the need for a relation between clans, community and ultimately nations didn't matter. Now, international relations between countries is critical for the continued peace, stability and prosperity of Individual nations.
Likewise, the alliance between African nations and the people's republic of China was forged out of the need for mutual economic benefits. Nigeria, for instance, formalised its union with China just a decade after it gained its independence. The bond between the two sides have waxed stronger, but not without a few drawbacks considering who gains and (ironically) who loses from the alliance.
Historical development of the Africa-china relations
The Africa-China relation(also known as Sino-African relations by experts) is nothing new. Evidence of trade between the two sides goes as far back as the 14th century. An example is trade contacts with China by the Moroccan traveller and trader, ibn Battuta. This ancient bilateral relationship is also evidenced by discovering porcelain and glass beads of Chinese origin in present-day Zimbabwe.
The relationship between the two parties has continued to wax strong. As a consequence, the turn of the 21st century has seen a significant increase in trade relations between the two as well as an increase in the number of Chinese living in Africa and vice versa. As of 2013, the estimated number of Chinese resident in Africa was reported to be one million, while the number of Africans in China was put at 200,000.
Another justification for the strength of the Sino-African bond is the fact that Africans(consumers) consistently seek cheap products which Chinese industries- craving large markets for their products- comfortably find in Africa. This coincidence of wants invariably creates mutually beneficial relations between the two sides.
In 2009, China outperformed United States, United Kingdom and France to become Africa's largest trading partner. In effect, China has signed bilateral trade deals with about 40 countries on the African continent ever since.
China has also been known to support African countries with loans for building desperately needed infrastructure to support Sumo-African bilateral trades. The Loans usually possess questionable clauses in their agreement which has got the attention of the international community. The primary concern is the motive behind the Chinese loans, which can be seen as being opportunistic. This brings us to Chinese loans and their effect on the economies on the African continent.
Once in a while, countries require a loan or two to help with certain economic constraints. But the question is, 'how much (loan)money is too much money?'
For a country like China(Lender), there are no limits. This is due in part to the fact that China's financing reserves have approximately equalled that of the world bank. The seemingly infinite propensity of China to give and give and give loans to underdeveloped and developing African nation is a serious problem. Some of the affected countries now struggle with a phenomenon called debt-trap diplomacy. This phenomenon plays out when a strong lending Nation seeks to burden the borrowing nation with more debt than can conveniently be managed to gain a level of leverage over the debtor country.
For instance, Zambia has become the first African country to default on the repayment of its debt to China. Depreciating prices of global copper prices -which is Zambia's principal export -has contributed to Zambia's struggle to pay and eventual default on its $11 billion debt to China. Speculations as to the fate of Zambia concerning Its debt to China have been put up, and the summary is the same every time: the Chinese leverage is in place in Zambia, thereby forfeiting certain economic and political control to China.
Following closely in Zambia's footstep are Angola($25 billion), Ethiopia($13.5 billion) and few other African nations like Congo and Sudan. Cumulatively, Chinese loans to African countries is over $140 billion.
This is a huge problem considering that the debtor countries do not efficiently service the loans.
Big trouble, little Africa.
As a result of solid bilateral relations between China and most African countries, there has been an influx of Chinese citizens and industries seeking to work with (or exploit-as the case may be) the people of these nations. Nigeria, as a case in point, began to host Chinese investors who built factories for commerce in the '50s. By that time, the number of Chinese residents in Nigeria was barely 200. Now, thanks to blooming Nigeria-China relations, that number has soared to one million. Chinese Industries in the country have boomed in like manner.
The industries in a country define its economy, and to an extent, the standard of living of its citizens. However, the proliferation of the Chinese industry in Nigeria isn't all pleasant when brought under scrutiny. This is because Chinese companies have a reputation for paying workers worst while offering poor working conditions. The reluctance of the said companies to promote locals over Chinese is also another problem.
The preference of Chinese professional expatriates over locals is a problem that has led to large scale unemployment. Even indigenous industries are not left out of this prejudicial behaviour as they also prefer to employ Chinese technology and workforce. A good instance is the Dangote group, which, best known to its management, chose the services of Chinese expatriates over local. This sparked outrage among the workers in the year 2010, and a protest ensued. The situation has not changed much ever since.
Furthermore, the over-dependence of Nigeria on cheap products made in China has lead to a flood of Chinese products entering the country. The effects are catastrophic. The ramification of the appetite for Chinese product include:
- The shutdown of industries due to crippling competition from the Chinese. A perfect example is the shutdown of the Kaduna textile industry due to the influx of cheaper (but not necessarily higher quality) textiles from China.
- Trade imbalance: Research has shown that the value of Nigeria's imports from China is ten times more than what it exports to China. This is a vast margin that creates a trade imbalance. The impact on the economy tends to be slowly crippling.
- Flood of fake goods into Nigeria, and indeed, other African nations. Counterfeit electronics, fashion items and even drugs are just a few of the menace caused by Africa's overdependence on China. This leads to the loss of expendable income (and lives in the case of fake drugs) to the tune of billions of dollars annually due to the replacement of these counterfeit goods.
In conclusion, the presence and activity of China, its people, and industry in Africa has been beneficial. Without an atom of doubt, many African countries would not have the Technological advancement and infrastructure they can boast of presently. Yet, we cannot but ask ourselves a pertinent question, 'at what cost?'
Written by Simeon Samuel for CoolAfricanMerch.com