China is being described as the "new colonial" power in Africa because of its investment in Ghana. Does the fact support this claim? Is it a win-win ties? Find our more here.
Chinese President Xi Jinping in a speech at the forum attended by President Nana Akufo-Addo committed to investing $60 billion in Africa. Prior to the forum, Ghana and China's Synohydro Company Limited signed a $2 billion agreement to boost infrastructure development in Ghana.
China's investment in Africa has in recent days come under scrutiny after multiple media reports suggested that some countries are indebted to Beijing to the tune of billions of dollars and are defaulting. As a result, the Chinese government is reported to have either captured strategic assets of defaulting countries in other to recoup their investment or restructured the loans to enable the countries to pay their debt.
China's kind of investments in Africa have all the footprint of an imperial power or if you like, colonialism: access to raw materials, access to a market for surplus goods and resettlement through emigration.
In 2013, Nigerian Central Bank Governor Lamido Sanusi lucidly captured China’s style of investment in Africa: “China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism,” he told British’s Financial Times.
Former US Secretary of State Rex Tillerson, speaking in Ethiopia April, accused Beijing of using “predatory loan” practices, undermining growth and creating “few” if “any jobs” on the continent. He further charged the Chinese with providing “opaque” project loans that boost debt without providing significant training. Failed US presidential hopeful, Hillary Clinton, is also on record to have warned Africans to beware of this “new colonialism.”
The hysteria about China colonizing Africa is somehow justified considering that Beijing’s adventure in Africa has all the footprint of a colonialist.
Trade in Africa
China surpassed the United States as Africa’s largest trading partner in 2009, according to the China-Africa initiative. However, China-Africa trade value has decreased in recent years. While exports from China to Africa remained stable between 2014 and 2015, exports from Africa to China dropped 42% due to the falling price of oil, China’s number one African import.
In addition, the value of African petroleum exports to China decreased by 50% from US$53.1 billion in 2014 to US$27.5 billion in 2015; since quantity exported decreased by only 5%, this decrease is mostly due to falling prices, not fewer barrels exported.
China now buys about one-third of its oil from Africa, mainly from Angola, where a £800 million deal to develop a new field was signed last May, and from Sudan, where Beijing built a 900-mile pipeline and invested at least £8 billion. China is spending another £1.2 billion on a new offshore oilfield in Nigeria, according to columnist David Blair, who writes for British Daily Telegraph newspaper.
Meanwhile, Beijing has acquired mines in Zambia, textile factories in Lesotho, railways in Uganda, timber in the Central African Republic and retail developments in almost every capital.
Last month, the parliament of Ghana rectified a $2 billion barter trade agreement with China’s Synohydro group. The deal will see the Chinese company mine Ghana’s bauxite to the tune of $2 billion in exchange for infrastructure projects.
China has also signalled its support for the African Union’s proposal of a pan-African high-speed rail network.
Africa tilting towards China did not happen in a vacuum. Analysts have pointed out to “conditions” the West attach to loans it advances to African countries. Unable to meet these conditions some which include recognition of gay marriage, election and democracy, among others, the continent looked to China.
China trade one-sided?
Amidst the hysteria of Chinese colonization, it is largely false for anyone to assume that China’s affair with Africa is one-sided. It may not be even or mutual, but there are some benefits Africa gets from its association with the Chinese.
In the area of training and jobs, China has been awarding scholarships to hundreds of young Africans to pursue various disciplines.
And research show three-quarters of workers on Chinese projects in Africa are locals.
Chinese loans often don’t come with conditions although they demand commitment fees.
Positive view in Africa
A survey conducted by the Pew Research Centre in 2017, noted that Africans are generally positive about Chinese investment on the continent. Of the African countries surveyed in 2017, Nigeria (72 percent), Senegal (64 percent), and Tanzania (63 percent) not only held the most favourable views of China in Africa but also some of the most positive views of China globally.
Asked whether Chinese influence was positive or negative, an overwhelming majority of Africans pegged China’s growing influence in their country as a positive, the survey said, adding:
“This influence commonly takes the form of investment projects, and for some countries, there appears to be a loose correlation between Chinese investment and perceptions of China.”
Imperial or cheerful giver?
It depends on how you look at China’s investment.
African states do not have the resources to mine or exploit natural resources. China brings its know-how in exchange for raw materials it badly needs, just like the Western powers.
For the Chinese, such a move is a win-win situation, for the West, it is “new colonialism,” and the for the African youth, it is absolute balderdash develop the continent with loans.