EDINBURGH — Africa is back on the radar of investment and business strategists, reports the Financial Times. This was underscored by British Prime Minister Theresa May, who got her Africa visits cleverly noticed and viral on social media channels by getting down and dancing clumsily with well-wishers across the continent. The pink newspaper highlights how China has led what it calls a “scramble” for business in Africa. Countries like Ethiopia, once best known for its starving orphans, are noted as attracting money for high-potential projects. – Jackie Cameron
By Thulasizwe Sithole
There is a scramble for business in Africa, reports the Financial Times. “Led by China, countries from Turkey to India are looking for opportunities,” it says.
The FT highlights a number of developments to back its point:
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- A Turkish company is generating part of Ghana’s power supply. Another one just this month finished a flashy new terminal at the country’s international airport;
- A Philippine utility is about to take over the running of Electricity Company of Ghana, the largest distributor in west Africa;
- Ghana’s biggest flyover, named after liberation hero Kwame Nkrumah, was built by Brazilians.
“A new group of outside powers — from China to Brazil and from Russia to Turkey — is gaining a commercial and strategic foothold across a vast continent that was, until recently, dominated by former European colonial powers and the US,” it says.
The changing patterns are reflected in trade statistics, according to the London-headquartered business publication:
- China supplanted the US as Africa’s biggest trading partner back in 2009. Last year, China-Africa trade was $170bn, off its 2014 peak but still nearly 20 times higher than at the start of the millennium. By contrast, US trade with sub-Saharan Africa was just $39bn;
- Africa-India trade jumped more than 10-fold from $7.2bn in 2001 to $78bn in 2014 — making India Africa’s fourth biggest trading partner, the UN Economic Commission for Africa;
- Between 2006 and 2016, the Brookings Institution calculates, the value of African imports from Russia and Turkey rose 142 per cent and 192 per cent respectively;
- China has invested about $125bn in African countries in the decade to 2016, according to the China-Africa Research Initiative at Washington’s Johns Hopkins University. This month, some 40 African leaders travelled to Beijing to hear President Xi Jinping pledge $60bn more over the next three years.
The FT points out concerns in Washington about the growing influence of China in Africa. “Last year, China opened its first overseas military base in the tiny country of Djibouti, adding to the presence of the US and others. Djibouti, now heavily indebted to China, is a prime example of what some US critics have labelled ‘debt diplomacy’, in which Beijing is said to be parlaying loans into political influence.”
China is accused of using debt to take over entities in Zambia, including the national power utility, with Mike Pompeo, US secretary of state, accusing Beijing of “weaponising capital” in Africa, as well as Asia, by using debt to create an economic world order in China’s image.
The growing sense that the US is losing influence on the continent helps explain President Donald Trump’s decision to back a big expansion of the Overseas Private Investment Corporation, a private sector focused development agency whose lending limit is to be more than doubled to $60bn, argues the FT.
Britain is still the second-biggest investor in Africa in stock terms, says the newspaper. It also remains a big aid donor.
“Many businesses also see longer-term commercial prospects in the African demographics that are causing concern over migration in European capitals. From 2018 to 2035, the UN predicts that the world’s 10 fastest-growing cities will all be African,” reports the FT.
“With a median age of just 19, the continent’s population is expected to double to more than 2bn by 2050 and to double again by the end of the century. Even without a big improvement in living standards, the increase in numbers virtually guarantees robust growth for decades. And some African countries are showing signs of gaining economic momentum.”
Last but not least, the FT points out that, of the world’s top 10 fastest-growing economies according to the World Bank, six are in Africa, including Ethiopia, a country of 105m people where China, Turkey and the Gulf states are all active.
