OPINION: China in Africa is Not the Problem—We Are

Kate Fin (SFS ‘21) is an editor for the Caravel’s Africa section and a guest writer for the Caravel's opinion section. The content and opinions of this piece are the writer’s and the writer’s alone. They do not reflect the opinions of the Caravel or its staff.

Chinese direct investment in Africa has come under increased scrutiny amongst western actors in recent years. (Flickr)

It is no exaggeration to say that Chinese development in Africa has exploded. In 2009, China became Africa’s largest trading partner, and trade between the two has grown 20 percent each year since 2000. Approximately 10,000 Chinese-owned firms valued at more than $2 trillion collectively operate on the continent today.

By any measure, these are astounding numbers, especially considering that U.S. investment in Africa is paltry in comparison. For the $72 million that China gave in foreign direct investment (FDI) in 2018, the U.S. invested only $31 million, well under half of the Chinese numbers.

U.S. citizens and Africans alike have met China’s massive investments in Africa with widespread suspicion, with many deeming the initiative neo-colonial and imperialistic. Indeed, China’s interest in Africa is no doubt self-serving. As a Forbes commentator put it, when China first began investing in Africa, “the continent was still the same stockpile of natural resources it’s always been, and China wasted no time stepping into the power vacuum.”

Critics of China have raised concerns over the poor working conditions and environmental degradation that its Africa-based firms cause, not to mention their failure to hire sufficient local workers. These are valid, and the international community should continue to push for an improvement in working conditions in Chinese firms, Africa-based or not.

But what critics of this economic relationship so often fail to consider is that Africa badly needs investment, and western powers have historically been unwilling to give it. Instead, the U.S., Europe, and Western-dominated international institutions like the International Monetary Fund (IMF) and the World Bank have dumped billions of dollars of foreign aid and loans into Africa, little of which actually contributed to the continent’s growth. China, at least, is willing to fill the gap and invest, rather than provide aid.

The Pew Research Center estimated that Africa will have the world’s highest population growth by the end of the century. Inevitably, this will lead to massive growth in the labor market and will require more jobs and better infrastructure. In other words, Africa needs investment.

The continent is ripe for it, too. Since 2000, it has been among the world’s fastest-growing regions and is home to four of the world’s 15 fastest-growing economies: Ethiopia, Rwanda, Ghana, and Ivory Coast. Improving business environments, rising incomes, rapid urbanization, and improved internet connectivity have accompanied these outcomes.

Despite these boons, which by all means should have western investors salivating over African potential, the U.S. and Europe’s investment levels in Africa lag far behind China’s. Even the World Bank, a U.S.-dominated international institution, admits that “nearly all African countries are benefiting from China’s participation today” while remaining suspiciously silent on the impacts of Western investment.

That’s because the West’s relationship with Africa since the 1950s has been one of aid dependence. Ten years ago, Zambian economist Dambisa Moyo released her book Dead Aid, a stunning indictment of the Western aid regime and its impacts on African development outcomes.

Moyo found that those countries that had received the most aid from western donors experienced the worst economic growth rates on the continent, sometimes even regressing economically. From incentivizing widespread government corruption and civil war to catching African economies in debt traps and undermining domestic firms and export markets, Moyo demonstrated how years of virtually endless and unconditional aid has wrecked African economies.

These findings should not surprise us. Giving aid, be it in the form of grants or loans, over and over to demonstrably corrupt governments does nothing to disincentivize their corruption. It does little to ease the suffering of an impoverished people, either, as funds are diverted from theoretical investment projects into oligarchs’ pockets.

Nor does dumping large amounts of non-fungible (that is, hard-to-steal) aid on African markets do the trick. In 2008, the U.S. experienced nothing short of a mosquito net craze. International charities asked households to donate just ten dollars to send a mosquito net to malaria-infested African countries, thereby saving a child’s life. The campaign’s beauty was in its stunning simplicity.

The immediate impact of this mosquito-net-dump was no doubt positive. The initiative gifted African families an approximately five-year reprieve from the possibility of contracting malaria, and countless Americans were validated in the process.

Of course, by now, the nets have fallen into disarray, as has U.S. support for their provision. The first wave of Western do-gooders who did not want to buy their nets from Africa for Africa but simply airdrop them after being made in American factories put domestic manufacturers of mosquito nets in Africa out of business. Aid did not help African economies, and it only served Africans themselves for a transient moment.

Naturally, what would help African economies take off is not gifting large sums of money to governments or dumping Western-manufactured resources on the continent, but instead giving money directly to individual firms and entrepreneurs, allowing them to use it in culturally appropriate ways to raise themselves and their communities out of poverty. In other words: investment is key. The U.S. can either help Africans shallowly, temporarily, and selfishly, or we can finally invest in their ability to help themselves (which, by the way, they can do).

While Chinese investment in Africa is undoubtedly self-serving and problematic in more ways than one, it’s filling a critical gap that the U.S. and other developed nations have neglected for far too long. Many actors in the U.S. see Chinese investment in Africa as a challenge to U.S. hegemony in the continent. This is because it is.

Whereas before, the world was content to let the West’s catastrophic aid regime dictate African growth, international investors are finally starting to recognize the region’s potential. Meanwhile, U.S. and European investment continues to lag. If these patterns continue, a growing Africa will inevitably turn its back on the former hegemons that conquered, colonized, pillaged, and undermined it in favor of the countries that finally recognized and invested in its potential.

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