Africa’s Latest False Choice

By Mahamoud Ali Youssouf

Djibouti – With the rise of Asian economies and their desire to play a greater role on the world stage, it has been suggested that Africa should choose between keeping its partnerships with the West and embracing new alliances with the East. This is the same false choice that African countries were told that they had to make during the Cold War, when the Soviet Union and the West, led by the United States, competed for exclusive influence across the continent.

The idea that Africa must once again choose between two competing blocs – Chinese and the Western – has become widespread among Western strategists, think tanks, and journalists. Reducing African options to such a crude choice conjures the specter of a new “Great Game,” with foreign powers once again carving up the continent for their benefit. According to this narrative, Asian investors, particularly the Chinese, will gorge themselves on the continent’s resources until nothing is left.

African governments and businesses take a more nuanced view. In recent years, Western investors have fixed their sights on emerging markets such as Brazil and China, leaving a funding gap for the pioneer markets of Africa. Many of our Asian partners have been successful in developing their industrial base, something that African countries seek to do as well. China, after all, is now the world’s largest economy (in terms of purchasing power parity), just three decades after opening itself to rapid development.

Meanwhile, economic growth is no longer a distant promise in Africa, but a reality. According to the World Bank, Sub-Saharan Africa’s GDP grew at a 4.7% annual rate in 2013, with the pace expected to accelerate to 5.1% in 2015 and 2016. Today, no global investor can afford to ignore Africa’s tremendous potential. Similarly, no developing country should ignore the great opportunities implied by engagement with Asia’s emerging powers. It is only natural that trade and diplomatic relations between two dynamic continents should be on an upward path.

The numbers are impressive. Exports from Africa to Asia increased more than sixfold between 2001 and 2011. Trade between the two continents now almost matches that between Africa and Europe, and China has become Africa’s single largest trading partner, with trade flows rising from $11 billion in 2000 to $210 billion last year. China’s direct investment in Africa has grown from a scant $500 million in 2003 to $15 billion in 2012.

And there is plenty of room for further growth. Africa accounts for only 5% of China’s overall foreign trade and investment. This is dwarfed by China’s investment in the US, for example, where it has accumulated $1.3 trillion in US government debt alone.

Chinese Premier Li Keqiang has been explicit about his country’s desire to form a progressive relationship with the continent, based on mutual respect, with a commitment to develop African communities. It is instructive that, although Africa accounts for only a small fraction of China’s foreign investment, it has received nearly half of China’s total foreign aid.

For Africa, the focus must be on building the right environment for investment. In building ties with Asia, African governments have an opportunity to learn from the region’s economic success stories, while boosting their own countries’ industrial development.

Much of Asia’s investment in Africa has focused on infrastructure that directly supports African priorities: telecoms, power plants and transmission lines, water and sanitation, roads and railways, ports, aviation, and airports. These investments represent a long-term commitment, and Africa benefits in many ways, gaining not only jobs today, but also a more advanced industrial base that will underpin employment and drive economic growth long into the future.

These investments also support Africa’s drive toward greater mobility, higher productivity, and a more prominent role in world trade. And, by fostering competition for projects and mobilizing a more diverse pool of investors, they have enhanced Africa’s economic security.

Of course, short-term investment and economic growth cannot come at the expense of medium-term social development and job creation or long-term sustainability and stability. We understand this, and so do our partners. It is the responsibility of all African governments to ensure that investments and partnerships – whether with emerging-market investors such as China, Brazil, India, and the Gulf states, or with Europe and the US – are built on fair terms.

To see the ties between Africa and Asia as part of a battle between East and West is simplistic, outdated, and, above all, wrong-headed. Greater interest in the continent is the result of reforms that have emboldened foreign investors – from both East and West – and of Africa’s growing ability to get the best deal for its economy and people.
Mahamoud Ali Youssouf is Minister of Foreign Affairs and International Cooperation of the Republic of Djibouti. This article was provided to Addis Standard by project Syndicate.