China’s growing influence in Africa

Some commentators have gone so far as to accuse the Chinese of pursuing a neocolonialist policy in Africa.

Global powers, both new and old, are jostling for influence in Africa. This renewed ‘scramble for Africa’, to borrow a term from history, is largely to gain access to increasingly scarce natural resources such as oil and natural gas. Global giants such as British Petroleum, Tullow Oil, Chevron, China National Offshore Oil Corporation (CNOOC) to name a few are investing huge amounts of money in the continent in the quest to ensure energy security and satiate the ever-increasing global demand for these products. In countries across the continent such as Ghana, Angola, Uganda and Mozambique, investment in the oil and gas sector is seen by governments and policymakers as one of the most important drivers of growth and development. According to estimates of the International Energy Agency (IEA), the scale of investment in the continent’s oil and gas supply infrastructure over the period of 2010-2035 will be around $2.1 trillion. The resource affords a chance for sub-Saharan Africa to recover from years of economic misery brought in part by tough conditionalities as part of the IMF-led and World Bank-supported Structural Adjustment Programmes (SAP). For a continent that has often been seen as a global backwater there are major potential benefits and pitfalls.

In order to take advantage of these resources, both established and emerging powers such as the US, China, Brazil and India as well as former colonial powers like the UK and France continue vying for influence in the continent. China has taken the lead in fostering relations with African countries and over the last few years Chinese influence in the continent has increased markedly. The country has emerged as Africa’s largest trading partner. Two-way trade has increased dramatically to an all-time high of $166.3 billion, triple the figure for 2006. Both imports and exports have registered impressive growth rates. According to estimates, there are around 800 Chinese firms in Africa, investing in the infrastructure, energy and banking sectors. The deepening relationship between China and the continent has led to the formation of the Forum on China-Africa Cooperation (FOCAC). The first ministerial conference of FOCAC was held in 2000 with the most recent one held this past July in Beijing.

The increase in Chinese influence in Africa has been seen with alarm in many developed countries. Critics, both outside and within Africa, say that there is little or no long-term benefit of the increase in trade to the continent as exports to China comprise mostly primary commodities such as oil and agricultural produce. They also assert that the no strings-attached aid policy pursued by the Chinese leads to a reduction in the pressure on governments to improve on issues such as human rights. Chinese support to dictators is seen as being counterproductive to the welfare of the masses and as benefitting Africa’s elite. Some commentators have gone so far as to accuse the Chinese of pursuing a neocolonialist policy in the continent.

It is, indeed, ironic that the very nations that divided up Africa and its peoples in the last quarter of the 19^th century are accusing the Chinese of being neocolonialists. The original scramble for Africa took place between 1884 and 1885 following a conference in Berlin. As in other parts of the globe, the colonial powers left deep imprints on the continent. Some of the main problems that continue to plague Africa were perpetuated, nee fostered, by the colonial powers to further their own ends. The frequent outbreak of violence between Hutus and the Tutsis in Rwanda is one such example where Belgian policy favoured the minority Tutsis much to the chagrin of the majority Hutus. Post-independence, this historical sense of deprivation has often led to acts of ethnic cleansing carried out by the majority. Economic exploitation and policies favouring firms from the metropole were also promoted by the colonial powers.

A 2007 article by Jedrzej George Frynas (currently a professor at Middlesex University in the UK) and Manuel Paulo in the magazine African Affairs shed light on this exploitation further. According to them, the development of oil resources in African colonies was pursued by the colonial powers to further their strategic and economic interests, and private as well as public firms of these powers developed the oil sector. In Anglophone Africa, a Shell–BP venture was given an effective monopoly for oil exploration and production in Nigeria. A colonial ordinance issued in 1914 stipulated that only British oil companies were permitted to obtain oil licences in Nigeria, allowing Shell–BP to dominate the country’s oil production. Similarly, in Francophone African countries like Algeria and Gabon, French oil interests were supreme. In Algeria, the newly-independent government was forced to sign a guarantee that French oil companies would receive preferential treatment in the granting of oil concessions for six years after the country’s independence. Apart from this, the military footprint of the US has also grown considerably in the continent. The military presence, apart from combating terrorism, has a vital support role in ensuring that oil fields in the continent in countries such as Nigeria are secure.

On the other hand, Chinese investment in the region is not based on extracting monopoly contracts for its firms. Similarly, in terms of development lending, as opposed to conditional lending by multilateral agencies (such as the World Bank) controlled by developed countries, Chinese aid to the region is unconditional and usually spent on infrastructure projects that have a greater impact on people’s lives. Sinopec, one of the leading Chinese state-owned oil companies, acquired oil concessions in Angola on the back of an oil-backed credit of $2 billion from China’s Eximbank to rebuild the country’s railways, state buildings, hospitals and roads. Far from being seen as neocolonialist, the “Beijing consensus” between African countries and China — to borrow a term coined by Joshua Cooper Ramo of the UK-based Foreign Policy Centre — is viewed as a much more attractive alternative economic development model in the continent, compared to the Washington consensus.

Published in The Express Tribune, August 30^th, 2012.