Thank you, Emeka.
And good afternoon to you all – Your Excellences and distinguished participants – from Addis Ababa, the capital of Ethiopia.
Let me thank you all for making the time to join us at the 2022 Abuja Forum and to also appreciate the Gusau Institute for the collaboration with China Zhejiang Normal University to put together this year’s Forum.
Worthy of mention, ladies, and gentlemen, is General Aliyu Gusau Mohammed (Rtd.), Founder of the Gusau Institute for the invitation to be a part of today’s insightful discussion.
It is interesting that I have over the last week, at various sessions in the USA, been talking about the contribution of China to Africa’s development efforts, especially in critical social and economic infrastructure.
To touch on some history and give context to our discussion, the continent of Africa and China have longstanding historical relations traced back to, as early as 1405 when it is said that Chinese explorers carried out voyages to the East Coast of the continent.
The famous Chinese Voyager, Admiral Zheng He, is known to have led large fleets of Chinese vessels to today’s Djibouti, Ethiopia, Somali, Kenya, and further South to Mozambique. It is said that his purpose was to “acquire knowledge across the oceans and make new friends”.
It is noteworthy that these early contacts were made almost a 100 years before the arrival in Africa of explorers from Europe and America. This provides some pointers to the future expectations from the relations that has developed between the continent and China.
There is yet another historic event that is noteworthy but often overlooked- the outcome of the Bandung Conference in Indonesia, which eventually became the cornerstone of the NonAligned Movement (NAM).
The Bandung Conference was the first large-scale meeting between 29 Asian and African countries in April 1955.
Ghana gained independence from colonial rule in 1957 and became a Republic in 1960. In that same year 1960, Ghana established diplomatic relations with the People’s Republic of China.
Ghana’s visionary leader Dr. Kwame Nkrumah was particularly enthusiastic of the relations between Ghana and the PRC.
Africa and China also have similar historical and contemporary backgrounds. Both are cradles of human civilization with empires that flourished and exported knowledge. China sees itself also as a developing country and therefore shows very close solidarity with the developing world including Africa.
In the current dispensation, Chinese African relations are guided by the Forum on China-Africa Cooperation (FOCAC), which meets every three years. During this meeting, China agrees with 53 African countries on the trajectory and quantum of assistance it will provide.
Since 2001, it is estimated that China has provided almost $130 billion in loans to African countries.
Roads, bridges, railways, and other critical infrastructure have been built with Chinese support. In my country Ghana, the Atuabo Gas Plant owned and operated by the Ghana National Gas Company, which receives, processes and supplies gas to power plants and other industrial users in the country was built with a Chinese Loan.
This cooperation has had a positive impact with a phenomenal increase in trade and investments between the continent and China.
China is Africa’s largest trading partner. Last year, it was estimated that trade between China and Africa grew by 35% and reached a whopping $256 billion. China’s main imports from Africa include minerals, metals, crude oil, and agricultural products. Its main exports to Africa include industrial goods, construction materials, textiles, electronics, household goods, machinery and equipment, vehicles, and food products.
Between 2000 and 2017, China lent to African countries about $147 billion in long-term financing. During that period, it also wrote-off about $3.4 billion and restructured almost $15 billion in debts to African countries.
It is also important to dispel a false notion that has gained widespread currency about relations between China and Africa. There is no record of any asset of any African country that has been confiscated by China due to debt owed.
After many decades of close relations with China, it is time to retune the ties between the two sides to create a win-win situation for both partners.
As a continent, either as individual countries or the African Union, we must focus on innovativeness, dynamism and develop a workable, youth-centered and futuristic industrialization plan that propels the continent and helps reduce the trade imbalance between the two sides.
What should be the next phase in the Evolving Africa- China Cooperation? What is true is that trade between us continues to increase year on year. Not even the recent COVID pandemic and the resultant lockdowns affected trade between us.
African imports from China amount to roughly $148 billion, while exports from Africa to China is estimated at roughly $106 billion. It is important to work together to bridge this trade deficit. With the African Continental Free Trade Area (AfCFTA) taking off and looking positive, the trade experts are predicting that it will further bolster free trade between the continent and China.
What we must be concerned about however is how this trade benefits countries on the continent as much as it benefits China. China is one of Africa’s biggest bilateral trading partners and will remain so.
There has been some good news already with China setting a target to increase its import of products from Africa to $300 billion by 2025. We are also going to see an increase in the number of products African countries can export, tariff-free to China.
But what products will our countries be exporting to China? Will we still be exporting farm and agricultural products, raw materials, unrefined precious minerals, and metals? And in return import from China, technology, clothing, equipment, and electronics?
African countries must get to work, with the support of China to reduce our over-dependence on exporting our natural resources and create added value for African products. African countries must work with China to build manufacturing capacity, especially in light industry for food processing, textiles, garments, and leather goods.
Africa has a large youthful labour force willing and able to work. The next phase of expansion in China- Africa relations should be in Foreign Direct Investments (FDI). Instead of just development cooperation, Africa needs FDI inflows from China to develop its manufacturing sector.
As was noted by Deborah Brautigam in a recent Reuters report, “Africa is trying to climb the same ladder.
But more than half a century after independence, Africa remains stuck in the trap of raw material exports. Manufacturing makes up only about 10% of value added. Ghana decades after independence still sends cocoa beans to Europe and imports chocolate and cocoa products. Angola exports crude oil and imports nearly 80% of its refined fuel.”
Ethiopia should be a model for relations with China. Today, it is reported that there are more than 400 Chinese manufacturing investments here, in Ethiopia, and the goods they produce are exported into the US and sourced by some of the major American buyers.
Why should the rest of Africa not look up to that model and get the support of China to develop same and contribute to a great industrialization drive on the continent?
Senegal has built a special economic enclave to attract Chinese and other manufacturing companies. Rwanda, Mauritius, and South Africa are all making steady progress in manufacturing and value addition.
We must take advantage of AfCFTA, grow our value chains, and get ready for increased international trade. Africa’s largest exporter to China was South Africa in 2020. Next was Angola and the Democratic Republic of Congo. Nigeria remains the largest buyer of Chinese goods, about $23 billion, followed by South Africa and Egypt.
Clearly, Africa’s relations with China are here to stay. Africans must take advantage and work to build our economies through the cooperation we have built over the decades with China.
Thank you and I wish you fruitful deliberations.
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