Yara Blog

The African State and the Effect of Its Sino-Relations.

Friday, April 27th, 2012  

Over the years, Africa, being home to majority of the developing countries of the world, has been and remains the continent where the most products – both original and sub-standard – are being dumped, making the African continent a dumping ground. Also, Africa, being home to mainly third world countries, has been and continues to be exploited by the developed countries of the world. Significant hazards in this regard include the signing of unfavourable trade agreements which are unhealthy to the African state, both economically and environmentally.  A vivid example of these exploits can be seen with the foreign oil companies in Nigeria, which employ methods of extraction of oil that pollute and destroy the surrounding land and water and the environment, making it hard to farm and fish. It is important to note that these oil companies do not do much to stop this pollution and they do not make any attempt to clean the environment or pay compensation to the affected communities for the destruction.

In light of these decades of exploitation by developed countries, Africa is now trading with and being approached by China for business relations, and what China has offered these countries in terms of the trade agreements is too favourable and too juicy  for them to turn down. These offers are tied up with debt forgiveness, financial aid, medical aid, technological enhancement aid, and this is a very close card being played by the Chinese because of the popular knowledge that African leaders will take rash decisions as long as they are

provided with offers that will enrich them personally (which introduces the issue of corruption). Therefore, African leaders do not consider the effect of their decisions, and the saying “if you want to hide anything from a simpleton put it in a book” works perfectly in relation to the issues plaguing African leaders, because the terms of these agreements are not perused and studied for their long term effects to the country.

As already stated above, African governments have opted to trade with the Chinese because the terms are not as onerous as they have become with other trading partners. At least this is what they think at the initial stage, but in the simplicity of the fulfilment of these agreement lies the detrimental decline of the economy of African states, as what China wants from Africa, apart from its oil and other natural resources, is also to be able to dominate some key sectors in the economy, like the agricultural sector, the technological sector, financial sector, and the import and export sector.

Different writers have argued that China’s main reason for giving financial and other aid to African countries is for the Chinese government to enhance the development of these African countries, because the Chinese state was itself a developing economy for many decades before it attained the position of an economically/financially prominent force to be reckoned with internationally. Therefore, it has been argued that this is the sole reason why the East Asian state gives African states significant amounts of aid, so as to fast track their development. It is important to note that the Chinese government gives this aid and relief for a number of reasons, like, the unrestricted importation of Chinese wares and products into Africa, unrestricted migration of Chinese citizens into Africa , freedom of international trade and commerce between Africa and China, etc.

There are approximately 44 African countries trading with China, and it is not difficult to see that China trades with these countries based on the resources it can garner from them.

Ethiopia and Kenya have been offered different kinds of aid, ranging from medical aid, financial aid, economic aid, social aid and so on. These offers are usually the subject of bilateral trade agreements between China and these countries, and these agreements basically state that the Chinese government will give the African states a plethora of aid facilities and assistance, like medical aid, financial aid (like debt forgiveness and low interest loans), building of social amenities (like hospitals, roads, schools) and so on. But, the African countries must in return grant China the authority to acquire raw materials from their territories, and in the case of Ethiopia and Kenya, large gifts of land rich in agricultural production were given to the Chinese government to farm in these African states. It should be noted that these agricultural farmlands were not just lying fallow or unoccupied, but were being used by locals who were displaced by their own governments in a bid to fulfil their agreement with the Chinese government.

When these agricultural farmlands are acquired by the Chinese government, they are put to great use, i.e. a lot of extensive farming, which is expected to make available fresh and healthy food for the populations of these African countries. However, the harvest of the farming by the Chinese government does not go to Ethiopians and Kenyans, but to the Chinese. These raw materials are exported from these African countries to China with no significant export duties being imposed for the Chinese consumption, all to the detriment of the African states.

Also the agreement makes it possible for the Chinese to import Chinese products and wares into the two countries without restrictions, in effect, further damaging the financial and commercial sectors of these economies.

Another country where the Chinese government have their tentacles extended is Nigeria. Nigeria, being the most influential oil producer/exporter on the African continent, has also been approached by the Chinese government to build social amenities like a good railway network, among others, with the effect that the Nigerian state will open up its economy for the Chinese government to import its products into Nigeria. This will leave the local industries dormant and not functioning, and the Chinese government wants to be able to secure for its citizens a good business environment, where Chinese nationals can come into the country to start business and make investments in the financial sector of the economy. But, it has been noted that the opening up of the financial sector of the economy to the Chinese does not guarantee the growth of this sector, rather the effect is to the contrary. When a Chinese national sets up business in a foreign country, he is greatly supported by the Chinese government through its diplomatic mission, and profit made by these nationals in the course of business will be automatically sent back home to China, which in effect means that the Chinese are basically making money out of a system without letting the money flow back into the same system where it was made; this, in effect, leaves the financial sectors dormant and without any kind of growth or improvement.

In conclusion, Chinese foreign direct investment in Africa has brought some “considerable” development to the African countries involved; for example, Nigerian export of crude oil to the East Asian country will undoubtedly ensure high economic returns to the government, as China has a high level of fuel consumption. However, the Chinese government is not helping in the direct improvement of the economy, which it can do by opening its market to African countries to import their products into the former’s domestic market, in effect developing and also enhancing the growth of the economy of these African countries. Notwithstanding the actions of China, African leaders can be more proactive and not reactive when signing International Trade Agreements. They need to be very active in their involvement in the negotiation and signing of the different International Trade Agreements they enter into, so as to figure out where and how an agreement will be unfair and detrimental to them. But, corruption and lack of political will have played a role in undermining the development of African states, and this has led to a significant growth deficit and greater exploitation of these countries by countries with effective capacity, like China, the Unites States and Britain.

Idrees Ibraheem.

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3 responses to “The African State and the Effect of Its Sino-Relations.”

  1. Concise. I wish the right people can read this.

  2. bashorun_primus says:

    nice piece……… selfishness, corruption and ignorance are the 3main pillars of Africa’s underdevelopment…..if we can tackle dis 3 problems…we will move forward

  3. Good post. I learn something new and challenging on sites I
    stumbleupon every day. It will always be interesting to read articles from other writers
    and use a little something from other websites.

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