The industrialization of Africa
Grace Schoeniger, Contributing Writer
For the last several years the Chinese government has been investing heavily in the African Continent. In September of 2018, representatives met at the annual Forum on China-Africa Cooperation. It was there that the President of China, Xi Jinping announced that China will invest $60 billion in Africa’s economy. The investment is broken up partially into the following: $20 billion in credit lines, $15 billion in grants, interest-free loans and concessional loans, and $10 billion in investment financing. A similar pledge was made in 2015 of another $60 billion that has been reported to be delivered.
One of the motivations behind this investment is likely to gain access to an abundance of raw materials that China could use in its rapidly developing economy. As their economy grows, their infrastructure must grow with it which demands resources far exceeding the amount they would have access to without help from Africa. The increased need for natural resources in couple with the need for food production, and product markets. With the rate in which China is growing, locking down access to additional resources will help them continue to develop for years to come.
Another reason for China’s investment is an increase in political influence. China is already to predominant force in East Asia and wants to extend its geopolitical influence. Already developed nations are off the table, India has long been a traditional rival and is still relatively close to their scope of influence already. The undeveloped nations of Africa are a perfect choice to extend their political influence on a more global scale.
While mining and oil are definitely in mind, China isn’t just exploiting the riches of Africa, but also investing heavily in their industries and infrastructure. The undeveloped nations of Africa show great promise for future economic growth in their emerging markets and China wants to help them flourish. The sectors receiving the most support include business services, wholesale and retail, import and export, construction, transportation, storage and postal services.
One quarter of all Chinese investment has been concentrated in Nigeria and Angola. Within Nigeria is the city of Lagos, the largest city on the African continent. Of the investments in Nigeria, large amounts have gone to the production of railways from Lagos to Kano, and from Lagos to Calabar. This is just one example of the investments in transport, with others including railways in Kenya, Ethiopia, Zambia, etc.
China has also been a big investor in the energy sector. Although most of it has gone to gas and oil, China is still one of the biggest investors in renewable energy. By allowing developing countries access to cleaner energy than we’ve had in the past, they can leapfrog past inefficient and higher-carbon energies. As the world is worrying about climate change and greenhouse gas emissions, allowing developing countries access to cleaner energy would enable their economies to grow without concern of increased greenhouse gas emissions.
These investments have been met with criticisms of new-age colonialism. Some say that these investments would leave Africa with unsustainable and crippling levels of debt, while other are worried about China exploiting Africa. The US has also been threatened by these investments in a continent they’ve largely seemed to overlook.