The next wave of Sino-African opportunities


There is a misinformed notion that Africa’s rise is being hijacked by China. There are claims that at the moment when South Africa, for example, has found the momentum to emerge as a developing economy amidst the budding continent, its resources and talent are routinely exploited by a nation undertaking a “no strings attached” integration policy, one serving as the root of American investment trepidation.

Our best chance of growth, they claim, is being cut away from us by the Chinese, who want to prune it before it can flower.

This is, of course, nonsense.

China is no doubt in Africa, and they are looking for business; win-win partnerships. But China’s trade and investment is to be welcomed; if Africa is to continue its awakening, it needs to connect with the economic giants, and China is one of the best partners we could hope for. After over 400 years of colonialism, almost every new energy power station, hospital, school, roadway, water purification centre, railway, port or food security enterprise has been funded and built by China in unique partnership with African countries.

President of the People’s Republic of China, Xi Jinping proposed at the Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC) in December of 2015 the concept of our strategic partnership; moreover, its ability to flourish through governance offering guidance, business playing a lead role and such win-win cooperation promoted throughout the multilateral engagements in Africa to date and in future.

I have often participated at similar forums in Beijing, Shanghai and of course at home in Johannesburg, bringing together officials and business leaders to discuss the role of Chinese policy and investment. It has been enlightening and encouraging to hear about the good that China has done for Africa, and the ambitious plans it has for the years to come. The China-Africa Development Fund under pan-Africanist Chairman Chi (for example) has been further capitalised to make innovative investments, especially in the industrialisation of African countries in order to create sustainable jobs. And since my country joined BRICS, we have seen partnerships such as this blossom.

It is true that there have been tensions in the relationship. But officials from China have been at pains to reassure that Chinese companies will strictly abide by local laws and regulations, hold themselves accountable for the quality of their projects, goods and to consumers, and “shoulder due responsibility” for local communities and the environment.

The reality is that China has been a vital catalyst in African growth in recent years and this cannot be overlooked. China’s trade with Africa has overtaken that of the traditional partners, Europe and the US. China-Africa trade is now at $300bn, with more than 2,500 Chinese companies operating on the continent.

Take Nigeria, for example: trade between Nigeria and China in 1994 was $90m but by 2000, it had climbed to about $830m. Last year, it was $15bn.

And, such as in resource-rich Nigeria, energy is a key area where Chinese expertise can help.

Akinwumi Adesina, president of the African Development Bank, stated that by 2025 there is absolutely no reason why Africa should not be “totally lit up with the power it needs to industrialise”.

“While we must explore every single opportunity, we will use the sun until the sun becomes the moon,” he said. And as the world’s biggest manufacturer of solar panels, China is an obvious partner when it comes to tapping into the ample renewable energy of sunlight that shines over Africa. Indeed the Africa game-changer 40,000 MW Grand INGA Hydro Project will only see light if China, the Democratic Republic of Congo (DRC), African Union (AU) and South Africa join hands.

With Chinese and African entrepreneurs like me, the days of “Black Africa” will be a thing of the past as new energy projects from Cape Town to Cairo will power and light up our economies.

However, while at the end of last year, China and the African Union agreed on an ambitious plan to develop road, rail and air transport routes to link capitals across the continent, social responsibility projects to coincide have been overwhelmingly encouraged. Indeed Takyiwaa Manuh, Director of the UN Economic Commission for Africa (UNECA), commented that Chinese firms will be doing much more in the sectors of infrastructure development and importantly, alongside it, technical education and training (such as agricultural training and other vocational exercises) as part of a necessary ‘soft infrastructure’ approach to support lasting economic modernisation and industrialisation.

No doubt a well-functioning road network will bring trade to cities and villages across the continent, helping African countries enhance their connectivity and break their development bottleneck. And while China has already completed 1,046 projects in Africa, building 2,233 km of railways, 3,530 km of roads and over 132 schools and hospitals, such ‘soft infrastructure’ initiatives will allow for sustainable development to be a mutually-beneficial realisation.

Thirty years ago, China was just embarking on its programme of economic reforms under Deng Xiaoping. Slowly but steadily, Deng’s reforms opened China to foreign investment and the global market, and encouraged private competition. They eventually turned China into one of the fastest-growing economies in the world for over 35 years and raising the standard of living of hundreds of millions of its citizens; surely we can learn from China’s example and support an agenda wholly tangible and with accountable benchmarks to enhance our shared ascendancy.

I have always said that “I strongly believe the best time to climb on the back of an elephant is when it is on its knees, so that when it rises, you should be on its back”. This mantra applies to African economics.

It is thus critical that Chinese companies partner with African entrepreneurs to secure their investment and sustainable growth, differentiating themselves from the former colonial powers who may have only been interested in dealing with the “big man” than local businesspersons. This mantra will help rid Africa of being labelled and stigmatised as corrupt. And governments are enablers for such partnerships, whilst ensuring businesses invest properly to create jobs and grow the middle class, so as to develop the list of tax payers towards the fiscus.

Frankly, the days of Africa being a begging bowl are over; Africa is so too ready for Chinese business.

Ultimately, while US foreign policy has of late hinged largely on ‘resets’ and ‘pivots’ (and no doubt coming presidential elections will shift this dynamic), Africa and China’s destinies have been and will remain closely linked. The spirit of our founding fathers Nyerere, Mandela, Krumar, Lumumba, Kaunda, Marcus Garvey and Chairman Mao lives on. We supported each other during the struggle for independence; we have forged a relationship of mutual learning in our civilisations and cultures.

We have respected each other’s choices in the path of development according to our national conditions, and we are learning from each other.

Robert Gumede is an entrepreneur, philanthropist and executive chairman of South Africa’s Guma Group of Companies. The views expressed are his own.