STILL ON SOLUDO’S HOME-GROWN ECONOMIC TRAJECTORY AND THE VITAL LESSONS FOR THE AFRICAN CONTINENT
By Christian ABURIME
A few days ago I wrote on the philosophy of Prof Chukwuma Charles Soludo’s home-grown economic trajectory and the need for other leaders not just in Nigeria but the entire African continent to support and emulate the economic direction.
Also in that article I made reference to the influx of the Chinese into Africa and how they are forging their way to subjugate the continent’s economy. The intent of this article is not actually to denigrate the Chinese but for the leaders of the African continent to wake up to their responsibilities
Below is the full story of the classical example of how the Chinese are smartly and gradually putting some African countries on the edge as reported by Elvis Adjetey with the rider: “Ghana panics after China begins exporting cocoa beans” (Cocoa is the mainstay of Ghanaian economy)
Some Ghanaians are panicking over reports of the Chinese entry into the cocoa industry.
The Chinese Academy of Tropical Agricultural Sciences recently reported that the Chinese island of Hainan has exported cocoa beans to Belgium.
South China’s island province of Hainan was responsible for the exported cocoa beans.
The first batch of 500 kg of cocoa beans worth 3,044 euros (about $3,600), was produced in Xinglong, a township of Hainan with a tropical climate, China Daily reported.
“Cocoa is a raw material for making chocolate. With the increasing demand for chocolates, Hainan has been expanding its cocoa planting area and making breakthroughs in technological development,” said Hao Zhaoyun, a researcher with CATAS.
“As Belgium is dubbed ‘kingdom of chocolates,’ exports to the country indicate that our cocoa production standards have been recognized by the international community,” Hao added.
Panic in Ghana’s COCOBOD, the agency that handles issues related to cocoa farming and export in Ghana is assessing the impact of the export of cocoa beans by China.
Although COCOBOD appears concerned, it maintains that the quantity of the Chinese cocoa export is too small to affect Ghana as the second largest cocoa producer in the world.
But there are concerns about the impact on price of cocoa beans on the world market if there is no increase in production and consumption.
Ghana’s Agricultural Workers Union (GAWU) has cautioned the government not to panic but rather initiate steps to modernize agriculture to mitigate any impact.
According to the General Secretary of GAWU Edward Kareweh the government of Ghana must transform cultivation of cocoa, its harvesting and processing to generate more revenue from cocoa production.
“We have to immediately change how we produce cocoa in this country. For more than 100 years we have been using cutlasses and hoes on our cocoa farms.
If we look at how we even harvest and store the cocoa beans, it is also not the best. We must sit up looking at the capacity of China and what they can do when they enter a particular industry” he said.
A Ghanaian renowned businessman, Sam Jonah expressed worry at a public event saying “The Chinese having helped pollute our rivers through illegal mining activities and having, in connivance with some Ghanaians acquired large tracks of farmlands in the cocoa growing areas have started producing their own cocoa.”
On Social media many Africans are worried very soon, China could outdo the leading producers of Cocoa, all found in Africa.
Cocoa is mainly produced in tropical regions such as West Africa with Ghana, Ivory Coast and Nigeria the leading producers.
Another developing story is the case of Nigeria. A brilliant analysis by Williams Ekanem on the Chinese loan default on rail project with Nigeria has also exposed the Chinese suspicious investment pattern in Africa
According to the story, China’s renege in funding the Nigerian rail project seems to have given credence to widespread criticisms that Chinese investments in Africa is an exploitative ploy.
The story continued, only last week, the Nigerian government laid blame for the abandoned rail project to what it calls, “the unresponsiveness of China,” in meeting its funding obligation.
Nigerian Minister of Transportation, Rotimi Chibuike Amechi is reported as saying, “we are stuck with lots of our projects because we cannot get money, the Chinese are no longer funding,” a situation that has seen the Nigerian government seeking new sources of funding the railroad project.
Reuters confirmed the development last week reporting that, “Nigeria has approached Standard Chartered Bank for funding of two railroad projects,” occasioned by the delays from Chinese lenders.
The uncanny development, analysts say, gives credence to the narrative that Chinese investments in Africa are not only serving Chinese interest, but also exploitative.
At the forefront of the criticism is the United States, whose government officials have consistently maintained that the Chinese is pushing an unfair investment strategy in Africa by exploiting African natural resources than spurring development in the region.
Announcing the US African policy in 2018 for instance, John Bolton, then National Security Adviser described Chinese business interest in Africa as ‘predatory,” adding that, “China uses bribes, opaque agreements, and the strategic use of loans to hold states in Africa captive to Beijing’s wishes and demands.
Such predatory actions, Bolton indicated, “are subcomponents of broader Chinese strategic initiatives, including “One Belt, One Road”, a plan to develop a series of trade route leading to and from China with the ultimate goal of advancing Chinese global dominance.”
Eleanor Albert, writing on the website of the US Council on Foreign Relations, stated that Chinese exploitation of resources in Africa has triggered fierce criticism from even Africa leaders, where Michael Suta won Zambia’s presidency some years ago in part by tapping into anti-Chinese sentiments.
Over the years, China has worked its way to become the largest economic partner in the region, deepening economic ties between sub-Saharan Africa countries and China.
Findings show that in 2009, China surpassed the USA to become Africa’s largest trade partner.
Between 2000 and 2015, Chinese banks loaned more than $94.4 billion to various African countries, according to John Hopkins School of Advanced and International Studies and China Africa Research Institute, SAIS-CARI.
Most of the funds, according to the Institute, are spent on addressing Africa’s infrastructure gap, with about 40 per cent for power projects, and another 30 per cent on modernizing transport infrastructure in the region.
The stillborn Nigerian railroad project should ordinarily fall into this later category, but the Transportation Minister told Reporters last week, “we are actually waiting for the Chinese to give us the loan we applied for and they kept delaying us.”
Keen followers of Chinese growing investments in Africa wonder what would have happened to the various pledges of funds from China; first, a $60 billion loans assistance announced by Chinese President, Xi Jinping in 2015 at an investment summit in Johannesburg, the South Africa capital with more than 30 Africa country leaders in attendance.
In 2018, at another investment summit tagged, Forum of China-Africa Cooperation (FOCAC) in Beijing, President Jinping pledged another $60 billion to African countries in loans, grants and development financing.
Although findings show that African country leaders are favorably disposed to Chinese loans, mainly due to its characteristic low interest rates, long repayment periods, but critics point out Chinese controversial business model with its attendant poor compliance to safety and environmental standards, unfair business practices, riddled with corruption as well as violation of local laws.
Writing in Quartz Africa, Feyi Fawehinwi captured Chinese presence in Africa’s economy terrain this way, “ even after many decades of doing business in Africa, Chinese businesses can hardly claim to be friends with their host, they operate like ships that pass in the night and speak to each other in passing.”
To Fawehinwi, “ Chinese and their hosts continue to live side by side, but far apart, and the gap between them inevitably filled by mutual suspicion.”
That suspicion may be what is playing out now as Rotimi Amechi asked, “will we wait for them forever? The answer is no.”
To avoid the rail project ending as another white elephant project, and there are a lot of them in the country, Nigeria’s federal government is sourcing fresh funds, about $3.02 billion from Standard Chartered Bank headquartered in London.
The crucial lessons for the continent leaders is that we must begin to look inwards in alignment with Soludo’s philosophy of home-grown economy not only to encourage and patronize locally made goods and services as a way of strengthening the continent’s economy but also to ensure that we remain competitive in areas where we have comparative advantage just like the case of Ghana above and also be less dependent on the Chinese loans.