Africa – China Cooperation: A Fruitful Partnership

Africa – China Cooperation: A Fruitful Partnership

THE history of cooperation between China and Africa is a long one. Indeed, prior to the establishment of the Forum on China–Africa Cooperation (FOCAC) in October 10-12, 2000, some African countries, such as Tanzania, had already forged strong cooperation with China which was championed by the two founding leaders of the two Republics, namely Mao Zedong and Julius Nyerere.

Today, the China-Tanzania friendship is more than half a century old and remains solid and unshakable, and more importantly, it has become a living symbol of China-Africa friendship.

Therefore, FOCAC, as a successor cum extension of earlier cooperation arrangements laid the foundation for development of China-Africa socioeconomic relations in the new era at different levels: continental, regional and bilateral.

In this regard, the two sides committed themselves to developing a new partnership underpinned by the principles of long-term stability, equality and mutual benefits to safeguard the common interests of developing countries.

Indeed, it is in the context of the foregoing that FOCAC focused on ten areas for spearheading the cooperation, namely industrialization, agricultural modernization, infrastructure development, finance, green development, trade and investment facilitation, poverty reduction, public health, culture, peace and security.

Over time, the FOCAC has provided African countries with an appropriate avenue for accommodating or taking on board other emerging and broader initiatives from China, such as the Belt and Road Initiative (BRI). Indeed, it needs to be remembered that the BRI was launched in 2013, with the objective of consolidating and complementing the objectives enshrined in the FOCAC cooperation documents.

Research observations show that African countries, which seized the unfolding opportunities arising from the above cooperation arrangements, have realized tangible results. ranging from faster economic growth, reduced poverty, improved investment climate and connectivity, higher level of industrialization, to widened and deepened involvement in global value chains. A few examples will illustrate the said achievements.

First, in 2019, direct Chinese investment stock in Africa topped USD 49.1 billion, nearly 100-fold from 2000; China’s cumulative investment in Africa has reached USD 110 billion. These investments are in construction, mining, manufacturing, science and technology, geological surveys, real estate, finance, wholesale and retail trade, and agriculture.

However, it is important to bear in mind that although this menu of investment is found in each of the African countries, its intensity and depth varies across countries in terms of sectoral distribution.

Second, more than 3,700 Chinese companies have invested in Africa. These investments have contributed heavily in propelling Africa’s growth trajectory with positive socioeconomic outcomes.

Third, in 2019, the bilateral trade between China and Africa stood at USD 208.7 billion, an increase of 2.21 percent annually. That is, an increase of 20 times when compared to year 2000. Furthermore, Africa’s four major economies, namely Nigeria, South Africa, Egypt, and Angola, have surpassed USD 10 billion in their trade with China.

Fourth, many flagship projects, such as the Africa Union (AU) Conference Centre, the Addis Ababa–Djibouti Railway, and the Mombasa-Nairobi Railway, among others, have been successfully completed.

Fifth, other cooperation projects undertaken range from science, education, culture, healthcare, to people-to-people exchanges.

The outbreak of the COVID-19 pandemic has virtually brought the whole world to a stand-still. Specifically, Africa witnesses reversals in economic growth, incomes generation, job creation, poverty reduction and inequalities. These indicators have been improving in the last two decades but now much of those gains are being wiped out by the pandemic. Research observations  show that real GDP growth in Africa declined by 2.6 percent in 2020. And this was the first time the continent experienced recession in almost two and a half decades.

Furthermore, the fiscal budget deteriorated even farther by eight percent, on average, during the same period, while poverty increased in a number of countries, including Ethiopia (4%), Ghana (14%), Kenya (13%), Senegal (33%) and Uganda (8%).

In the same vein, the pandemic has affected negatively the growth of a number of sectors, ranging from trade, services, agriculture to tourism. Measures such as lockdown have had severe impacts on the tourism value chains, not only on airlines, but also on hospitality and catering industries.

Apart from sectoral impacts, we are also observing widening gap between rural and urban areas. Whereas inequality has worsened in urban areas with the middle- and low-income groups being significantly affected, income lost in rural areas was lower than in urban areas. Likewise, the size of the informal sector has kept on increasing instead of decreasing, given the negative employment effects of the pandemic on the formal sector.

Indeed, the onset of Covid-19 has made pessimists and the enemies of China and Africa believe that the existing cooperation frameworks would not be able to withstand the pandemic’s headwinds.

On the contrary, the cooperation pressed ahead against all odds, by making encouraging progress and coming up with new proposals for building resilience, as well as making it more comprehensive and up-to-date. This is the good news because it is a clear indication that Africa-China cooperation is on the right direction, consolidating and sustainable.

(The writer is Professor of Economics, and Director of the Centre for Chinese Studies, University of Dar es Salaam.)

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