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Opinion: 'Africa needs to drive a harder bargain with China'

By Tolu Ogunlesi, Special to CNN
  • African organizations building links with China, says Tolu Ogunlesi
  • China has "insatiable hunger for natural resources that abound in Africa"
  • China often offers financial aid to African countries in exchange for resources
  • Some believe African countries may not be driving a hard enough bargain with China

Editor's note: Tolu Ogunlesi is a Features Editor with Next, a daily newspaper in Nigeria. He was awarded the Arts and Culture prize in the 2009 CNN MultiChoice African Journalist Awards and he writes a weekly column, Ongoing Concerns, for Next. He writes for Africa 50, CNN's special coverage looking at 17 African nations marking 50 years of independence this year.

Lagos, Nigeria (CNN) -- In 2006, Hafsat Abiola-Costello, a Nigerian democracy and women's rights activist, relocated to China to study for a Masters degree in International Development at Tsinghua University.

A few months into her program, heads of Government from more than 40 African countries gathered in Beijing, at the invitation of the Chinese Government, to attend the third ministerial conference of the Forum on China Africa Cooperation (FOCAC).

"I'd never seen that kind of celebration of Africa at any time in any part of the world," Abiola-Costello told me last month, in Lagos, Nigeria.

"The Chinese, in preparing for the African delegation and for this meeting, wallpapered Beijing with billboards celebrating Africa, celebrating Chinese friendship with Africa, and showing Africa's achievements, like the pyramids in Egypt. The way that Africa was received moved me," she said.

She was moved enough to set up China Africa Bridge, a consultancy, to facilitate relationships between Chinese and African businesses.

"At the level of government to government the relationship between China and Africa is already very rich," she told me. "What we're trying to do is create a relationship at the level of people to people, business to business, students to students, scholars to scholars, doctors to doctors."

To that end, China Africa Bridge in July 2010 organized an event, "Enter the Dragon", in Abuja, Nigeria's capital, and Lagos, featuring seminars by Chinese culture and business experts.

"I think that what Africa will gain from the Chinese will depend on how many bridges we build between China and Africa that would allow different sectors of our society to get transfer of technology, transfer of skills, transfer of resources, in both directions," she said.

China Africa Bridge is not alone in the quest to build linkages at a level beneath the grand, billion-dollar narratives that have dominated the news about China-Africa economic relations in recent years.

There is also Afrobridge (headquartered in Shanghai, China), founded in 2007 by Nigerian Kayode Jegede "to be a facilitator of the growing trade and business relationship between Africa and Asia." (Like Abiola-Costello, Jegede was inspired to start Afrobridge while studying in China; at the China Europe International Business School, Shanghai).

Between 2000, when FOCAC was launched, and 2008, the volume of trade between China and Africa rose ten-fold, taking China past Italy, Britain, and France to become the continent's second-largest trading partner, after the U.S.

That surge was fueled by China's insatiable hunger for natural resources that abound in Africa -- oil, natural gas, minerals, and timber. The hunger itself is the fallout of an economy that has grown at an average rate of almost 10 percent annually, over the past two decades.

Much of China's spending in Africa to date (investments in excess of $20 billion) has been premised on a "swap" model: offers of loans and financial aid and infrastructure projects in exchange for access to desperately needed resources.

One of the most prominent examples is the $6 billion-worth of investments in the Congo's mining industry, and in much needed infrastructure -- hospitals, schools, roads and railways -- in exchange for $3 billion-worth of mining concessions.

In May the China State Construction Engineering Company signed an agreement with the Nigerian National Petroleum Corporation to invest $23 billion in building oil refineries and a petrochemical plant in Nigeria.

Against this backdrop of feverish activity, one question looms: What's in it for Africa?
--Tolu Ogunlesi
  • African Economy
  • China
  • Africa

Against this backdrop of feverish activity, one question looms: What's in it for Africa?

A lot, it seems. During the third FOCAC the China-Africa Joint Chamber of Commerce was established, and China announced an abolition of tariffs on a significant number of African exports to China, as well as pledges to commit $5 billion in loans and export credits, and to establish a $5 billion China Africa Development Fund.

At the end of the gathering a declaration emerged announcing the commencement of "a new type of strategic partnership" between China and Africa.

The presence of China has also improved the continent's bargaining powers with its traditional trade and development partners in the West.

"It is widely acknowledged that China's very significant intervention in Africa over the last few years has completely altered the continent's traditional dependency on the U.S. and other developed nation donors. Africa now has an alternative source of aid, trade and investment," argue the authors of a 2009 Chatham House report.

Europe and America seem to have realized this, and are redefining the way they deal with Africa. Jose Manuel Barroso, President of the European Commission noted before the second EU-Africa Summit in 2007, "the time for lessons, moralizing and paternalism is past."

The next crucial question is this: What does Africa stand to lose? It is arguably the most important question of all, taking into consideration the fact that Africa's dealings with foreign partners have almost always left it worse off.

David Shinn, retired U.S. diplomat, and currently adjunct professor at The George Washington University's Elliott School of International Affairs told me that there are worries that "African countries may not be driving a hard enough bargain with China."

Sino-skepticism, consisting of allegations that China is nonchalant about transparency and human rights records in countries with which it does business, is partly inspired by the Chinese government's policy of not interfering with the internal politics of its partner nations, as well as its no-strings-attached generosity.

Both policies are documented in the 1964 'Eight Principles for China's Aid to Foreign Countries' declaration: "In providing aid to other countries, the Chinese Government strictly respects the sovereignty of the recipient countries, and never attaches any conditions or asks for any privileges."

The skepticism about China's involvement in Africa also extends to its alleged penchant for engaging in employment practices that discriminate against locals, and for flooding African markets with substandard goods.

In 2006, the "Chinatown" in Lagos, Nigeria, was shut down for three months by customs authorities who alleged that the Chinese merchants were smuggling banned textiles into Nigeria.

Trade imbalances are also a problem. Chinese exports to Nigeria in 2009 amounted to $5.5 billion, while its imports were a paltry $0.9 billion. However, in an interview with Nigerian media in June, Guo Kun, the Chinese Consul-General in Lagos gave an assurance that China is committed to ensuring that the trade is balanced.

It is here that people like Abiola-Costello and Jegede will come in. Abiola-Costello told me her goal is to improve the chances of "a win for China and a win for Africa" by "meet[ing] the Chinese at least half way."

She sees tremendous opportunities ahead for African countries to make an impact in China. "We can change [the deficit] because there are many goods for which there are no tariffs for Nigerians to export to China, and Nigerians don't even know about this."

She thinks it is critical for Africa to jettison the obsession with short-term gain that has marked its economic relationships with foreign interests.

Shinn aptly sums it up: "It is up to African countries to extract the maximum benefit from the relationship."

The opinions expressed in this commentary are solely those of Tolu Ogunlesi. You can read his blog here.

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