Beyond China’s year of Africa

China’s “year of Africa” has brought a unique opportunity that some say is spurring an economic renaissance on the continent. But will China consider the environmental consequences? Godwin Nnanna reports.

The last decade has been particularly eventful for Africa.  On the political front, the continent has witnessed many transitions that were unprecedented in its entire post-colonial history.  For instance, the exit of such strong political figures as Charles Taylor, Gnassingbe Eyadema and Jerry Rawlings in west Africa has changed the face of governance in the region. 

On the economic front, many African countries have embarked on reforms aimed at giving a new face to the continent’s economy.  Not a few African leaders celebrated in 2005 when their countries secured relief for the huge debt profile that was fast strangulating their economies.

A number of hitherto state-controlled economies in Africa have introduced liberalisation and privatisation policies that are fast redefining the way business is being done. These include Egypt, Angola, Nigeria, Ghana, South Africa and Algeria, which together form the bulk of the continent’s new economic power brokers. 

Most of the leaders of these nations believe their countries are on the path to a genuine economic renaissance.

China’s rise

In 1970, 39% of the world’s poorest people lived in China and 37% lived in other parts of Asia. But the Asian economic miracle of the 1980s and 1990s lifted the living standards of huge numbers of people. The percentage of those scraping by on less than US$2 a day in Asia fell from 48% in 1980 to 16% in 1998.

In contrast, Africa only accounted for 16% of the world’s extreme poor in 1980, but made up two-thirds of the global poor in 1998. By the World Bank’s US$3 per day standard, 64% of Africans were poor in 1998, up from 55% in 1980.

But all is not gloomy on the continent.  Figures from the African Development Bank (AfDB) indicate that the continent maintained an average economic growth rate of 5% in 2004 and 2005.  And the bank predicts an even higher average of 5.8% and 5.5% for 2006 and 2007 respectively.  “Two thirds of the 30 countries surveyed showed a net growth in investment that was by far the best in seven years.  If the good weather holds up, along with world commodity prices, the improvement could continue into 2007”, AfDB notes in its Africa Economic Outlook.

Africa can learn a lot from China.  China’s transformation shows that poverty can be tackled and extreme poverty can be eliminated.  From a growth rate that was virtually stagnant in the 1970s, China has risen to become the world’s fourth-largest economy.  “We can learn from them how to organize our trade policy, to move from low to middle-income status, to educate our children in skills and areas that pay off in just a couple of years,” said Donald Kaberuka, AfDB president.

China gave a new impetus to its relationship with Africa when, at the beginning of the year, it dubbed 2006 the “year of Africa.” Unlike many international declarations, evidence abounds that proves the impact of that statement. In 2006, Nigeria alone benefited from over US$3 billion of Chinese investment in its oil and gas sector, and is looking forward to another investment of US$4 billion in its railways that would help revamp a sector that has remained moribund since the 1960s. China Civil Engineering Construction Corporation (CCECC) is to build a 1,315 kilometre railway from Lagos, in southern Nigeria, to Kano, the commercial hub in the country’s north. CCECC president Lin Rongxin said the five-year project will generate employment for 50,000 Nigerian young people.

In Angola, an oil boom that might see the country overtake Nigeria as the continent’s biggest oil producer is already underway, and China is at the forefront of this revolution.  With increased investment and aid from Beijing, Angola is rebuilding its infrastructure on a massive scale, most of which had long been overwhelmed by an upsurge in the population.

Angola currently produces an average of 1.4 million barrels per day (bpd). But some experts have projected that the country’s production will hit 3.4 million bpd by 2011. Angola joined the Organisation of Petroleum Exporting Countries (OPEC) on January 1, 2007, as the second member from sub-Saharan Africa and the first new member since Nigeria joined in 1971 (Gabon had joined the cartel in 1975 but pulled out). Angola’s new profile is one of the success stories of China’s year of Africa.  

Observers say the massive Chinese investment into infrastructure in Angola and other countries in Africa may create atmosphere for development. “Africa’s need for infrastructure investments, estimated at US$20 billion a year for the next decade, is understood and supported by China. This is an area considered too risky by many of Africa’s traditional partners,” says Ngozi Okonjo-Iweala, Nigeria’s former minister of finance.

For Kwesi Aye, a Ghanaian economist, “even if unintended, China’s effort in building roads, schools, bridges, hospital and power infrastructure in Africa is most likely to jump-start the countries that harbour them on the path to change.” Aye is delighted that the China-Africa summit in Beijing last November secured a hydro-electric dam deal for the country with the Sino Hydro Corporation. The US$600 million 400-megawatt hydro-electric project is expected to help improve the electricity supply in the west African country. 

A unique opportunity

So far, China has demonstrated that it is a benevolent, non-threatening partner that Africa can work with. Africa has a sizeable stock of the resources that China needs; and China, in turn, is providing the financial and technical resources that Africa requires to propel its economic turnaround. Dismissing scepticism on the future of the relationship, Liu Guijin, China’s ambassador to South Africa said: "The China-Africa relationship is truly one of equality, friendship and mutual benefit based on common interests." 

Whether in the short or long run, the Sino-African relationship can only be as good as African leaders make it. Western powers have held sway in Africa throughout the continent’s post-colonial era, and all it has left is a continent suffering from severe economic haemorrhage. China offers Africa a unique opportunity for balance and economic repositioning.  For instance, Nigeria and Angola are now better empowered to seek ways out of a total reliance on oil, which despite its contribution to GDP, constrains development prospects as the dominant element in their economies.  

Over 760 Chinese companies currently operate in Africa, and China’s year of Africa will go down in history of one of Africa’s years to remember. But the talks have still left observers unclear of how China plans to deal with the environmental challenges that arise from its quest for oil in Africa. With China’s current pace of exploration there is no denying that many oil-producing communities in Africa risk the same ecological damage that has made the Niger Delta the volatile region it is.  

For instance, Angola’s Cabinda province, which produces around 60% of the country’s oil revenue, has been engaged in a struggle for self-determination that largely anchors on the deepening poverty, environmental degradation and human-rights abuses that prevail there. The Front for the Liberation of the Enclave of Cabinda (FLEC), like the Movement for the Emancipation of the Niger Delta (MEND) in Nigeria, harbours an intense dislike of the oil companies Chevron, Texaco, Eni and Agip that currently operate there. 

If China hopes to continue its operations in Africa with relative ease – beyond its year of Africa – it needs to make its plans clear. In conjunction with its local partners, Beijing should come up with a country-specific framework, one which details how it intends to handle the environmental challenges that its oil and mining interests are likely to pose for host communities.

Godwin Nnanna is the Accra Bureau chief of BusinessDay Nigeria. He was a gold medallist in the 2006 UN Foundations Prize for excellence in reporting development and humanitarian issues.