China is taking Africa, one country at a time
China’s presence in Africa is often under estimated and perhaps more importantly misunderstood. Like a submarine, China is taking Africa one country at a time and not many seem to be taking notice. Take for instance, Star Times. It began in a humble way in Rwanda 15 years ago and it is today Africa’s largest pay-tv network.
And one more fact, a survey by McKinsey shows that unlike many believe, Chinese investors already in the continent are even more worried about corruption than their hosts.
A new report by the global consulting giant McKinsey & Co says China-Africa business opportunity which stands at around $145b today, should grow exponentially to $440b by the year 2025, just seven years away.
China is Africa’s number one trading partner and the value of China’s trade with the continent is three times that of the next largest trade partner. What is more, China’s FDI flow into Africa has grown at more than 25% annually for the last five years. Today, the value of china’s financing of infrastructure in Africa is seven times that of the next largest bilateral financier. It leaves you wondering does Nigeria have a China strategy?
Believe it or not, there are now a staggering 10,000 Chinese firms in Africa today and 86% of the managers and workers in these firms are local, opening the way for more job opportunities in the continent. However, while the Chinese state owned enterprises and their private firms know what they want, it is doubtful if African governments have ever thought of evolving a China policy.
More than 30 per cent of the Chinese business operations in Africa are in manufacturing and collectively, they already hold 12% of the market share on the continent. The picture, however, diverges sharply from country to country and in the main arising from the absence of clear-cut policy in each country. In Ethiopia for instance where there is an effective development policy, only 2% of Chinese businesses in that country are involved in trading.
China is aggressive in pursuing its interest in Africa but the Asian giant is showing that it can also be creative in deploying its submarine strategy. China is now Africa’s number aid donor, spending a total of $6b in 2012 and the level has risen yearly since.