China-Africa business: Discourse still lacks equilibrium
It is not hard to view recent developments in Sino-African relations through rose-tinted glasses. Numbers from a recent McKinsey report suggest that Africa’s engagement with China may be the continent’s most significant relationship till date, as China outstrips India, France, the USA, the UK, and Germany to become Africa’s top economic partner. Whether it is aid, trade, infrastructure financing, or foreign direct investment (FDI), China ranks among the top five in every category of influence.
It is, in fact, no secret that I, too, am a major proponent of Sino-African relations and the enormous potential that it holds. However, while the narrative has shifted considerably from earlier speculations around China’s neo-colonial “scramble” for Africa’s resources, the discourse surrounding China’s engagement still lacks equilibrium. Specifically, there is an implicit tendency to downplay Africa’s agency, with China serving either as a rapacious neo-imperialist, or a benevolent big brother, and the continent lying generally on the receiving end of what is a skewed relationship one way or the other.
The aforementioned McKinsey report, for example, portrayed a relationship that was more or less unidirectional, with China serving as the focal point. At a macro level, the numbers were undoubtedly impressive, but were heavily concentrated on how capital, labour and resources flow from China to Africa. At a micro level, the discussion revolved around how African firms should strategically position themselves relative to their Chinese counterparts.
If African countries are to compete globally, at some point the conversation has to move towards how Africa can create reciprocal linkages with its international partners. While it is important to court inbound FDI, there should also be a simultaneous push towards developing pathways and channels for Africa’s public and private sectors to make inroads into international markets. How, for example, can African companies compete in Chinese markets, when there are already, according to McKinsey’s findings, over 10,000 Chinese-owned enterprises playing across the continent today? How can African governments negotiate with their Chinese counterparts to ensure that the Chinese government holds Chinese companies in Africa to the same standards that they enforce in China?
A recent study on how various brands are faring in Africa revealed that non-Africa brands are consistently dominating local markets across the continent. Among the top-50 most admired brands in Africa, only eight are “home grown.” In light of this, perhaps the question of how Africa can attract more foreign investments is not the only issue at hand. If anything, there is a need to create greater impetus around how Africans can become more competitive in their own markets, as well as how they can access and compete in overseas markets whose players are already entrenched throughout the continent.
Earlier this year, I had identified China’s economic slowdown as an opportunity to create greater interdependence and mutual benefit for both regions. Instead of reacting to global forces that are motivated to engage in Africa for an array of reasons, it is high time that African governments, enterprises, and professionals took charge of the discourse surrounding their various interactions. There is an alternative to the ‘Big Brother’-‘Neo-Colonial Predator’ dichotomy and it is on that path that Africa will be able to find equal footing with its international partners.
Isaac Kwaku Fokuo is principal at BOTHO Ltd. and co-founder of the Sino-Africa Centre of Excellence (SACE) Foundation – a think tank based in Nairobi, Kenya that aims to facilitate sustainable China-Africa trade and investment through research, project innovation and advisory services. Aparupa Chakaravati is a senior consultant.