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Why is China Hungry and Interested in Africa?

Many Chinese view the continent of Africa as a business opportunity and that differs from the prevailing attitudes of many Americans, who routinely look at Africans as charity cases in need of guidance. I am a US citizen and recall as a child learning about Africa.

My first recollections come from the early 1980s. Ethiopia was suffering under a terrible famine and pop singer Michael Jackson launched a ‘We are the World’ song campaign to encourage people to donate to African charities. Other pop singers held a huge concert at Wembley Stadium to promote an ‘African Aid’ fundraising event.

I held deep concerns for the poor Africans but upon further reflections I realized that treating people as charity could lead to bad results.

Sometimes people will exploit the kindness of strangers to take gifts and not wanting to return the favor or feeling inspired to become productive members to society. They transform into shameless beggars without gratitude.

The Americans are not perfect with deeply-flawed character traits, but we are generous by nature and at times that causes more harm than good. Americans will throw money at a problem without insisting on good behavior from the receiver.

The Chinese are different as they see Africans as potential business partners and expect them to honor their contracts or face the consequences.

Meanwhile, Africa stands tall as a continent very rich in natural resources with a young and rapidly growing population, as well as the potential to become an economic powerhouse within the next few decades.

Nonetheless, foreign investors have to help African countries to move forward on industrialization, urbanization and modernization drives or Africa has no real path forward.

Yet the Africans must decide for themselves if they will push ahead on economic revitalization, although it requires a complete break from the current status quo among many African nations, since rampant corruption, social instability and high rates of violence have kept Africa under lowly conditions.

The Chinese government believes they can help by introducing the Belt & Road Initiative (BRI) to build major infrastructure through joint projects in Africa via the finance mechanism of the AIIB (Asian Infrastructure Investment Bank).

Beijing with cooperation among many African countries have constructed more hi-speed railways, hospitals, roads, bridges, power plants and so much more.

The new infrastructure can create greater connectivity. Africa can attract more inbound Foreign Direct Investments (FDI) when there are better roads, upgraded shipping ports and more reliable energy resources. You can’t open a factory without electricity, running water and nearby roads.

Accordingly, Chinese investments are transforming Africa into a manufacturing hub and we can read more about it from Harvard Business Review. The link is here: https://hbr.org/2017/05/the-worlds-next-great-manufacturing-center

“From the corporate investor’s perspective, one advantage is that although Africa is still challenging in many ways, it offers arguably the widest array of market options. Nigeria boasts an enormous domestic market with high margins and relatively little competition for a variety of consumer goods. Lesotho enjoys tariff-free access to the U.S. market along with proximity to excellent South African infrastructure and logistics services for shipping time-sensitive fashions to American customers. Ethiopia offers attractive tax breaks along with cheap power and proximity to lucrative Middle Eastern markets. In other words, Africa can provide an appealing location for pretty much whatever business model a manufacturer has.”

Chinese investors are taking a closer look at Africa but I would suggest investors from other parts of the world show a deeper interest in the sub-Saharan continent as well.

Credit: Thomas Pauken II

Gabriel Mwini

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