By David Colhoun The Afro News Vancouver
: With the world economy shifting in balance from the West to the East it is hardly surprising to note that the pattern of investment into Africa has also shifted to reflect this. Hungry for the vast natural resources on offer, China has dramatically increased its investment in, and trade with Africa. A recent article in The Economist Magazine highlighted that China is now Africa’s largest trading partner with imports from Africa to China expected to top $70 billion in 2011. While any additional investment is in the main a welcome opportunity for wealth creation in Africa, it is not without its problems.
While some Western companies are reluctant to invest large sums in states with questionable governments, or human rights records, Chinese firms have no such qualms. They desperately need the abundant natural resources such as oil and copper to fuel their massive economic growth, and they must look beyond their own borders to secure future supply. Large scale investment is often “sweetened” with social programs such as the building of infrastructure, hospitals and schools among other things. On the surface they may seem noble undertakings, but many have been shown to be poorly thought out, insufficient efforts to curry favour with the local communities. Similarly cheap Chinese imports of consumer goods have stifled, or in some cases destroyed local indigenous competitors. It appears all may not be as it seems in this new and growing trading relationship.
Of course given the imperial history of countries such as Britain and France there remains an understandable reluctancy in many quarters to allow companies from these countries to exploit local opportunities. China on the other hand has no such history of domination and subjugation in Africa, indeed China provided diplomatic, military and moral support to many new African states in the post colonial period, particularly to those taking the socialist path. Anecdotal evidence shows that Chinese investors are also more likely to involve bribery and corruption in winning contracts, something all too familiar to African business, and something that hinders the best and the brightest succeeding.
Leaders of some African states considered pariahs across much of the world, are happy bedfellows for the Chinese who for reasons known only to themselves, choose to ignore some horrific abuses of power in these states in favour of a money-making opportunity. Robert Mugabe of Zimbabwe and Omar al-Bashir of Sudan are two good examples of this trend. Their brutal regimes have been propped up by strong economic links with China, although given the record of human rights abuses in China it is hardly surprising that large Chinese companies (many of whom are state controlled) have little issue with dictatorships or the lack of democracy. China has a stated policy of “non-interference” in local government and politics, which serves to make them all the more attractive partners for undemocratic regimes.
China counters any criticism of their activities in China by referring to the huge development loans awarded by their banks to some of the poorest countries in Africa, however these loans are often contingent on the funds being spent on Chinese goods, or through Chinese companies on the ground in those states. Of course Western state aid has occasionally taken this route, so finger pointing lacks real substance.
As always Africa faces tough choices in her efforts to modernize and develop, for so long the imperial powers have exploited, divided and in some cases stolen the vast wealth within the continent. Lacking the capital and expertise to take advantage of this wealth itself, there is a natural tendency to look outward to find it. The danger is that so soon after shaking off their colonial masters, that the leadership of many African states will sell out to a new kind of master, one that may appear to seek a mutually beneficial economic relationship on the surface, but beneath is simply another exploiter.
David graduated from the University of Limerick in Ireland with a BA in History, Politics and Social Studies. He followed that with a Postgraduate Higher Diploma in Business Studies and the UCD Smurfit Graduate School of Business. He spent 7 years working in Finance, including 6 years with a Stockbroking and Wealth Management firm in Dublin. He moved to Canada in 2009 with his wife and presently works for a large business association in Vancouver.