By Dr David Monyae and Bhaso Ndzendze
If the rise of China is the greatest story of the past twenty years, then the increasing presence of China in Africa (an elemental prerequisite for the former), is not too far behind. This is best indicated by the graph below, which shows the growth in trade between Africa and China between 1992 and 2014.
Africa-China Trade, 1992-2014 (U.N. Comtrade)
What underlines this story is rapidity; as two emerging entities in the global market, the impressive levels of trade between Africa and China seem to grow exponentially with each successive year. This one was no exception. 2017 was an eventful one in Africa-China relations; from enhanced people-to-people relations, greater trade and investment, to the opening of China’s first overseas (300-personnel) naval base in the Horn of Africa, where China also offered to mediate in the border dispute between Eritrea and Djibouti, who both claim entitlement to the Doumeira islands. One thing is clear: Beijing is playing an evermore active role in the continent of Africa.
What follows is a (non-exhaustive) review of some of the major milestones and developments in Africa-China relations over the past year:
Chinese Investment in Africa
In the early years of the launch of the Forum on China-Africa Cooperation (FOCAC) and its concomitant seriousness of China’s Africa policy, plans to expand China’s involvement in Africa were met with immense scepticism the world over. But Beijing steadily made inroads, with its trade with the continent growing twenty-fold over a period of ten years, and by 2009/10, immediately following the global financial crisis, now called the Great Recession, which saw the U.S. and E.U. decline in a number of African markets, China had surpassed the United States as Africa’s number-one trading partner. These countries made some of the biggest headlines in Africa-China relations this year.
Following two years of construction, Kenya’s largest mega-infrastructure project since its independence from Britain in 1963, a $3.8 billion Chinese-built high-speed railway, became active this year, built by China Road and Bridge Corporation and 90% financed by China Eximbank. Speaking at an event marking its opening, Kenyan President Uhuru Kenyatta referenced the country’s colonial British railway, known as the “Lunatic Express”, built more than a hundred years ago, stating that: “Today, 122 years later, despite a lot of criticism, we now celebrate, not the Lunatic Express, but the Madaraka Express, that will begin to reshape the story of Kenya for the next 100 years. I am proud to be associated with this day.”
With trade relations already at well over $10 billion (representing 7.6% of the total trade volume between China and Africa and 36.4% of total trade volume between China and ECOWAS), this year China’s foreign minister Wang Yi pledged $40 billion in investments and projects in Nigeria. Wang also pointed out the fact that China is highly interested in maintaining a deeper cooperation with the west African country, while stressing that the Nigerian government and private sector, with preference for small and medium scale enterprises (SMEs), should compose workable plans to enable them to benefit from further funding support from the Chinese government.
On September 29, the Tanzanian Deputy Minister of Foreign Affairs and East African Cooperation, Dr Susan Kolimba, at an event commemorating the 68th anniversary of the establishment of the People’s Republic of China in 1949, noted that more than 1,700 job opportunities are expected to be generated by $945 million in Chinese investment in projects registered in Tanzania this year alone.
The Tanzania Investment Centre (TIC), established in 1997, has so far registered 670 investments from China worth $5.7 billion, employing close to 84,000 people, most of them in the manufacturing sector. In June of this year, the TIC signed a $154 million contract with the Chinese SOE, China Harbour Engineering Company (CHEC), to expand the main port in the commercial capital, Dar es Salaam. Tanzania’s government, which hopes to expand the port plans to increase container throughput to 28 million tonnes a year from 2020 from around 20 million tonnes currently.
In a year when U.S. President Donald Trump caught global news headlines (and the ire of citizens across the continent) twice mentioned the non-existent “African” country of “Nambia,” Vice Minister of Commerce of China Qian Keming and Namibia’s Deputy Minister of Economic Planning Lucia Iipumbu signed an agreement aimed at financing the dual carriageway to Hosea Kutako International (HKI) Airport and another agreement in support of wildlife protection equipment in the country. Further, the Chinese government provided the Namibian government a grant aid of over $34 million for the HKI Airport road, while the second agreement for the donation of wildlife protection equipment is valued at over $1 million.
In September of this year, the Rwanda Development Board (RDB) signed a memorandum of understanding with the Huajian Group, a Chinese business and investment company specialising in apparel manufacturing. The agreement will see the company establish a factory that will be producing shoes, clothes, bags as well as electronic equipment. Huajian Group joins numerous other Chinese companies in the textile sector already operating in the continent’s second fastest developing economy, one of which is C&H Garments Factory, which is also one of the country’s fastest growing textiles firms.
Over the past seven years, Rwanda has seen a high number of Chinese investments especially in tourism, ICT, construction, agriculture, manufacturing and infrastructural development; as a result, China is now the second-largest source of FDI in Rwanda, behind only the European Union. Furthermore, there are some 2,000 Chinese living and working in the country.
China’s inroads in North Africa saw its FDI in Tunisia grow by 13.6% during the first nine months of 2017 compared to the previous year, according to that country’s Foreign Investment Promotion Agency (FIPA). Among the total foreign investment of $659.4 million, a sizable portion was FDI which represented a 13.2% increment compared to 2016, which had seen a sharp decline of about 29.6%.
On the December 6, Zimbabwe’s new government signed a $153 million loan agreement with China; its first deal with a foreign government since the retirement of former President Robert Mugabe; the aim of the loan is the expansion and refurbishment of the southern African country’s international airport in Harare as it seeks to attract tourists and investors.
On June 25, China pledged $15 billion to fund Ghana’s massive economic turnaround agenda, with the likelihood that a further $4 billion would be committed for various development projects across the 10-region country, which became the first sub-Saharan country to gain independence in 1067. Ghanaian Vice-President Mahamudu Bawumia, who was the leader of a high-level government delegation to China, returned to Accra after a 4-day official visit to China with numerous new economic agreements that are expected to bolster the Ghanaian government, led by the New Patriotic Party, which got elected late last year, in its plans to improve Ghana’s economy.
On September 6, Zambia, the continent’s second-largest copper exporter, granted a Chinese firm a $1.2 billion contract, which Zambian President Edgar Lungu said would be aimed at expanding part of a key road linking Zambia to the Democratic Republic of Congo and other southern African neighbours. China Jiangxi Corporation for International Economic and Technical Co-operation (CJIC) will build the 321 kilometre Lusaka-Ndola dual carriageway over four years, the President said during the launch event. Chinese investments in Zambia already includes roads, agriculture, mining and energy projects such as a 750-megawatt hydro-power station in the southern portion of the country.
…As did Chinese Tourists
Numbers of Chinese visitors to Africa have doubled in just 12 months. This huge inflow was thanks in large part to a heatwave in the PRC (with temperatures reaching 35°C), which prompted many Chinese to take vacations in southern Africa in an attempt to escape the heat. Last year, more than 100-million Chinese travelled abroad, making China the world’s top outbound tourist market, and since 2010, the number of Chinese tourists who visit Africa has an average growth rate of 50% year-on-year, owing to a welcome towards Chinese visitors and the relaxation of visa rules and an increase in direct flights between China and many African countries. Due to the growth of the middle class in the PRC over the past four decades since the reform, the spending power of Chinese tourists is estimated to be 40% higher than that of European visitors.
But challenges persist. Particularly pressing is the issue of crime, as Chinese Ambassador to South Africa Lin Songtian has put it, “If you can’t convince people it’s safe here, tourists and investors won’t come.” Clearly, while the relationship between Africa and China is hitting new strides by the annum, there are a number of political issues borne directly from the Africa-China relationship itself, or from third-party interactions. But, regardless, what milestones can the relationship still reach?
Find out what is in store for the future of Africa-China relations in part two of this report.