Six thoughts on China’s involvement in Africa’s infrastructure sector

It seems like the issue surrounding China’s involvement in Africa just cannot go to rest. During a session around the topic of infrastructure earlier today at the Ernst & Young Strategic Growth Forum in Cape Town, business leaders and government officials were asked whether they thought China’s involvement in Africa’s infrastructure sector should be welcomed or seen as a threat. Below are their answers.

"Never let the perfect become the enemy of the good," sums up the stance of Dr Kayode Fayemi, governor of Ekiti State in Nigeria, towards China's investment in Africa.

“Never let the perfect become the enemy of the good,” says Dr Kayode Fayemi, governor of Ekiti State in Nigeria, about China’s investment in Africa.

“I think China is a welcomed player, the magnitude of [Africa’s infrastructure] needs are huge, and the [more] players we can have, the better for the continent.”
– Ebrima Faal, regional director, African Development Bank

“I really believe in dialogue and partnership. I think China has contributed a lot to the growth that we are seeing in Africa. I think everyone benefits from China’s infrastructure. If you look at roads, for example, please correct me if I’m wrong, but none of the roads were built by Africans, it used to be the Europeans that built the roads, and now the Chinese. But when you build roads and railways, then you have locomotives that can come from the US.

“I do believe, however, that some of the models can be questioned in terms of infrastructure for resources because it becomes a question of valuation.

“I think governance and transparency is very critical because in the end resources belong to the people and I think for Africans that is the most critical.”
– Rick Angiuoni, regional director, US Exim Bank

“They are making tremendous progress. There is no government that you have in Africa that would tell you that China is not a catalytic player in the market. Governments naturally don’t prefer players that want to lecture them about how to go about things. The Chinese don’t lecture. The come, they want business, they will not lecture you about your human rights abuses, they are not going to lecture you about … corruption.

“I have Chinese companies operating in my state, and of course in the [rest of] the country they are huge. The bottom line is that you never let the perfect become the enemy of the good. They are good players. There are hidden dangers, particularly in terms of transferring expertise to the local economy when they bring all their workers and want to just operate in a bunker environment. Those are [however] challenges that you can overcome with your own clear principles.”
– Dr Kayode Fayemi, governor, Ekiti State, Nigeria

“China obviously is a huge market. China is very hungry for resources and what they try and do is what any shrewd business person would do in terms of backward integration into the supply chain, to make sure that there is continuous supply. I think every country should be aware what those strategies are, and make sure that it extracts to its own benefits from China’s strategy.”
– Siyabonga Gama, CEO, Transnet Freight Rail (South Africa)

“We cannot ignore the size of China. We cannot ignore the size of the resources that they hold, but I think that China is one of the biggest risks for the African continent. The dependency on that economy has grown too fast in a short space of time. And if we continue at this same rate, if China comes down, it will come down with the whole continent.

“What we need to be doing as Africa, is prepare ourselves on how we can engage with China as equal partners. We’ve seen in certain economies, or in certain countries, where they come in, dictate us, and say ‘We’ve given you the money, we’ve given you the infrastructure, we’ve brought you human capital – don’t regulate us.’ And that is a huge risk.”
– Elias Masilela, CEO, Public Investment Corporation (South Africa)

“My view is [China] is definitely a catalyst. They push all of us in terms of how we are thinking, and that is not necessarily a bad thing. If there is a view that they are a threat, then I have a reverse question which says: ‘What are we doing to accelerate our investments to make it work for us’?”
– Keith Matthews, general manager for sub-Saharan Africa, BT Global Services