December 15, 2017

China-Africa Forum: huge gains from change of strategy

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By AMB Online Reporter

As Julius Caesar is famously quoted: “I came, I saw, I conquered”, the Chinese came to Africa and clinched deals worth billions during a two-day China-Africa Forum with regional leaders and went away with what they essentially aimed to achieve. Of course, as African leaders would like us to believe it was “win-win” with no one with an upper hand. But, on paper, in fairness, they are substantial gains to be had for African countries.

Perusing the “official” information, it apprears the deals clinched during the summit decidedly reflect China’s change of economic strategy.  From investing in equities in foreign countries, the world’s biggest economy has made an about-face towards investing in long-term (infrastructure and agriculture in particular) in both developed and emerging markets. As poor infrastructure is repeatedly singled out as the main obstacle to attracting foreign direct and intra-Africa investment, Chinese work ethic and capital should address the backlog.

In addition, as food security is the main obstacle due to erratic rainfall patterns, China’s expertise in agriculture will help African countries that can’t feed their populations to be self-sufficient in food.

China’s fairly relaxed loan facilities are generally attractive to African countries. Small wonder, the country has become the major source of credit to emerging economies, including Africa, notes Martyn Davies, Managing Director of emerging markets and Africa at Deloitte in his article China Inc on a spending spree.

All told, state-led or otherwise, China’s investment is heaven sent when the West is showing indifference to pouring funds into countries that have failed to get basic things right in over 50 years of independence. China may have been may have criticised for being “so intrusive” in different projects in African countries, but its involvement has resulted in high level of delivery, mainly in basic infrastructure. On the other hand, the practice of disbursing funds to African governments and believe they will use them prudently has fueled widespread corruption and underdevelopment. Kudos China!

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