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China plays an import role in Africa

         Date: 2012-09-27

           Tag: China-Africa, trade

Summary: These are the kind of grand projects China is pursuing in Kenya with the recent launch of Africa's largest geothermal energy project in the remote areas of the Rift Valley.

Since African countries began to attain independence from European colonial powers in the 1960s, trade has come to play an even more critical role worldwide, both between developed powers and in the global South.

Africa, the continent with the highest number of the world's poor, missed the opportunity in the 1980s and 1990s to tap into the massive global trade that would have improved the livelihoods of millions of its population. As a result, poverty hit unprecedented levels, forcing African countries to rely on donor funding and grants.

However, a significant shift continues, as witnessed by the entry of Asian countries into what was once a cosy cocoon for the Western world.

This has seen the sale of African goods and services to Asian markets hit 30 percent, up from 14 percent a decade ago. This is almost the same level of trade as between Africa and its historical partners such as the EU and the US.

The increased outflows show how the second scramble for Africa is taking shape by the day.

Today's scale and pace of China's trade and investment flows with Africa is unprecedented. The emergence of South-South commerce is likely to intensify the scramble further as China seeks to dislodge India from its traditional ground.

With 40 percent of countries in Africa landlocked, China will be banking on the modernization of infrastructure in the continent to boost its penetration further.

Already, Chinese firms are involved nearly all the road projects in Africa, with few exceptions. In the pipeline now is the exploitation of alternative but affordable energy sources such as wind, gas and geothermal.

These are the kind of grand projects China is pursuing in Kenya with the recent launch of Africa's largest geothermal energy project in the remote areas of the Rift Valley.

In Tanzania and Rwanda, China is also playing a covert role in the exploitation of natural gases.

The entry of the two nations to Africa has presented a significant opportunity for growth and integration of the sub-Saharan part of continent into the global economy. Due to the rapidly modernizing industries, booming middle class and burgeoning purchasing power, these two tigers' battle for control of Africa will not end any time soon.

Is the traditional Indian grip likely to loosen as Chinese investors run across Africa for opportunities? Having witnessed the second scramble for Africa from its start in the mid-1990s, I am convinced that it is impossible to forecast the ultimate winner.

Nevertheless, no country beats China in the extraction sector such as mining, building of power plants and road construction.
 


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