Not all that comes from the East is wise

By Moses Ngorok

China has pursued a bold policy of reaching out to countries in Africa in ways that advance Beijing‘s agenda

When America sneezes, the rest of the world catches a cold. A phrase repeatedly and calculatedly used in American diplomatic circles to emphasize America’s superior economy and bully weaker economies to submission. Recent trends signify a change in circumstance where weaker economies especially African economies instead of catching a cold can afford to rudely rebuke America for its sick ways. The change in attitude is unimaginatively linked to the ‘new brother’ or sister whichever way you see it, that these countries have in China.

Looking East has never been this promising, like natures arrangement, a lot of warmth emanates from the East with an increment of Chinese investment in the mostly despondent states of Africa. This is not to say that the relationship between China and Africa is something new. Historical ties between the two can be traced as far back as the 10th century BC. What is apparent is the renewed vigor with which China has invested in the African Continent, putting question marks to its motives.

The most common explanation for China‘s increasing interest in Africa is that China is desperate to secure a steady supply of the raw materials it needs to sustain its remarkable economic growth. China’s leap into the circle of the G8 has come with great sacrifice to its natural resources which have been exhaustively used. For example, the change in circumstance, where China, once Asia’s leading oil exporter is now turned largest importer of the same. No doubt China‘s hunt for natural resources, oil chief among them, is one of the primary factors driving its political and economic strategy, particularly in the developing world.

Although China’s main interest in Africa is to desperately secure a steady supply of raw material, there remain other secondary considerations which are likely to breed the envy of any state; that is simply that China has more money than it can spend. The Chinese government needs a place to invest its surplus. The Chinese economy has since 1975 grown at a steady of 8.4% p. a (per Patrick J. Keenan). This rapid growth has seen China transform from a Martial Arts state to a reservoir of wealth. The Chinese Government has quite rightly used this surplus to promote its strategic objectives thus the renewed interest in Africa.

No doubt there is still, even after the initial one, a scramble for Africa’s resources. Serious competition to woe African leaders’ signatures on contracts remains the order of the day. Above this stiff competition China has triumphed. China has pursued a bold and sophisticated policy of reaching out to countries in Africa in ways that advance Beijing‘s interests and are attractive to many African governments.

When the Chinese compete for investment opportunities in Africa, they often have an advantage that other countries do not have. The Chinese take a neutral economic, political stance unlike the United States and other wealthy governments that make a bullish approach to these opportunities. China provides subsidised loans to governments in the developing world that are more often than not unconditional. These loans are also at below-market rates. The benefit for China is that its support for Africa leaders’ pet infrastructure projects helps it gain access to resources—mainly oil—that the Chinese economy needs. China’s unparalleled nonchalance towards dictating terms and conditions on these grants makes it a favorable partner to many Africa states. Africa’s reliance on the west is slowly diminishing paving way for a rebuffed Sino-Africa partnership.

This symbiosis has to date remained unfettered with Africa largely gaining from it. Countries like Angola, Zambia, Zimbabwe , DRC have positively benefited from Chinese aid. However, projections into the future do not paint a rosy picture.

Chinese loans have inevitably become the ideal source of funding for most African states because of the expediency of acquiring them. As an African bureaucrat said, “it takes only one meeting with the Chinese and a contract is signed”, whereas it takes a much longer time to procure a “western” loan. The expediency in procuring Chinese loans is attributed to China’s non-interference policy. China grants monies to African countries without dedicating the terms of use and any form of accountability. This presents issues in accountability and invariably promotes corruption. Chinese policy of aid makes an assumption that all leaders will use the money to promote development in their countries which is not usually the case.

This presents a conundrum since in many poor countries, the path to wealth almost invariably leads through political office. This is particularly true in resource-rich states in which the government controls access to the revenue generated by resource extraction. When this is the case, those in power have an incentive to maintain tight control over access to resources, and incumbency can emerge as a substantial advantage. Broadly speaking, evidence supports this intuition. For example, other things equal, states that derive a substantial portion of their revenue from oil wealth tend to have regimes that are longer-lived and less democratic than would otherwise be expected.

There is doubt as to the genuineness of China’s aid to Africa. In Africa we live in a culture of aid where the rich have a moral duty to give alms to the poor. This culture represents Africa’s Achilles. Countries often receive aid without second thought, the repercussions to be felt much later. Several countries discover that they were exploited years after they appended their signatures to contracts. China like its ‘Western’ counterparts has securing its interests as its primary objective, everything else is secondary. Under this guise more often than not, African countries are to curse their actions. Being poorly institutionalised makes it much difficult to sieve genuine aid from chaff.

Moses Ngorok is a legal Associate  at Virma Jivram & associates,