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Thursday, October 28, 2021
Davison Makanga interviews DEBORAH BRAUTIGAM, professor International Development at American University
CAPE TOWN, Jul 17 2010 (IPS) - China’s interest in Africa is frequently portrayed simply as that of a rising economic power seeking natural resources. Deborah Brautigam argues that this portrayal misses the full complexity of business relations between China and the continent.
Deborah Brautigam, author of ‘The Dragon’s Gift: the Real Story of China in Africa, argues that in contrast to Europe and the United States, China also sees Africa as an important market. As well as dominating exports of consumer goods to Africa, Chinese companies are exploring manufacturing and infrastructure construction across the continent, and coming up with innovative ways to profit from and pay for it.
Speaking to IPS during a recent visit to South Africa, Brautigam said African governments, large and small business owners, and civil society will have to remain alert to take advantage. Excerpts of the interview below; Read the full interview here. (pdf)
Q: Let’s talk about the recent deal to build refineries in Nigeria: how does it illustrate what you’ve called “resource-backed infrastructure loans” by China in Africa? A: First of all, it was a only a memorandum of understanding.
The key thing to look at is where the financing is. There is no financing mentioned in this [May] deal. [In July, some details of funding for a first refinery were reached.]
I think it will be very brave Chinese bank that takes on a 20-something billion dollar project in Nigeria because, yes, Nigeria is much more stable than Democratic Republic of Congo, but the DRC projects are much smaller.
But the reason the situation is like that is political. A few people at the top benefit from having some control over the imported oil products, and they don’t want that situation to change. So it’s a challenge for this deal to be consummated.
Q: What are the strengths and weaknesses of China’s involvement in Nigeria? A: Nigeria is a country in which there have been a lot of discussions of doing these resource backed infrastructure loans. My understanding is that the Nigerian government came up with this idea. Perhaps they looked at Angola and some of the things the Chinese were doing there.
They proposed this to the Chinese, Indians, Koreans: so a number of different Asian companies and government got a proposal that they do oil-backed trades, getting access to concessions out in the Niger Delta and in return they could do the infrastructure projects. It is a different kind of deal than the DRC and Angola. Because in Angola the oil is being pumped so you can secure loans with oil that is already being exported. In Nigeria, you can get a concession but there is no guarantee that you will actually get oil there and of course there are expenses.
In DRC, the Chinese made very sure that they put in the contract that the copper concession had to be evaluated so they could be sure there was enough copper in there, and copper that could be mined at a cost-effective price.
Q: What is in it for China in the end? Why get involved in complex, risky deals? A: I think it is useful to look at China’s relationship with Africa as part of its strategy of going global. It’s about China being part of globalisation.
You can call this neo-colonialism, imperialism but what globalisation is all about is moving up the ladder, it’s about becoming a world economic power and so China looks at Africa as a partner in this.
So what do the various parts Africa provide for their partnership?
What they are largely providing is raw materials; but the other side of it is, [Africa is] a huge market. The West has by and large been competed out or they have given up on African markets but these markets are huge. China is the single largest exporter to Africa all across the board. The Chinese look at Africa in a different way. The West looks at Africa as a place of war, disease, chaos and terrible things and a place to be pitied. The Chinese look at Africa as a place for consumers and business partners and it’s a very different picture.
Q: Chinese products and retailers are highly visible in African markets. What is their role in Africa’s economies? A: Chinese traders are playing two roles.
On the negative side, they are competing with other traders. In Tanzania for example, Chinese traders are sitting on the pavement next to the Tanzanian traders and laying out their groundnuts, speaking Swahili, calling customers to come buy their groundnuts.
And this has happened in a lot of countries. To see a Chinese person there… people are not comfortable and the same applies in small shops. That provides a lot of competition for local traders who may not want someone coming in speaking their language selling right next to them.
On the other hand the Chinese traders are creating more opportunities for consumers. They bring in cheaper things. Sometimes the quality is not good, but often the quality is good and consumers learn which traders to trust.
There has been very interesting research into how Africans are reacting to these kinds of products. There has been a problem of copying – this is not so much on the level of traders but Chinese coming from China and taking African fabrics back to China, having them duplicated there at a cheaper price and bringing them back to sell in Africa.
Q: What role should governments, civil society and business play to take maximum advantage of the possibilities brought on by China? A: For African governments, it is very interesting to learn more about the things the Chinese have done in order to raise themselves out of poverty. Not to copy their policies but to look and adapt their program of experimentation and try new things out.
There is a lot we can learn from what the Chinese have done over the past years. So I think for African governments they also have another kind of partner and they can use this as leverage for policy space.
African governments over the past couple of decades haven’t had a lot of policy space because they have been subject to conditionalities. It’s not just about governance but economic policies.
What the Chinese are saying is that there is a lot different ways to develop and it doesn’t all have to be by Washington consensus.
Business people have new partners. A lot of African traders have been going to China and picking up Chinese goods and services and bringing them back. What’s been happening in some parts of Africa is that traders have been going to China and looking at their factories and say, This is not difficult to do. And they have been seeking Chinese technical assistance to help them set up factories – I have seen this happen in Nigeria for instance.
For civil society, what will be helpful is if they can learn as much as possible about what the Chinese are doing – both the negatives and positives.
As with any new partner, they need to be sure that they keep the partner on their toes. They want to push for greater transparency, they want their government to release information, they want have figures: how much aid are we getting, how much investment are we getting, how much trade are we doing, how many export products, do we have debt, can we repay it?
That is what a democratic society is entitled to know and that’s the role for civil society. And also pushing for standards and enforcement of standards.
I think they are doing a good job but they can do better.
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