by Chinemerem Onyeukwu
Today many economists and business professionals alike look towards Africa as the next frontier for industry and economic growth. This is due to Africa’s relatively young population and under engaged markets. These young people however are connected to the broader world and are eager to enter it, but their efforts are often stifled by corrupt governments, sub-par broadband infrastructure and serious supply chain issues. Despite all of these hindrances Africa still boasts the fastest growing middle class in the world and many emerging economies.
Due to these bright spots many developed nations have taken up interest in the continent, countries such as Germany, China, UK, and India are all vying for influence and stakes in Africa. At first glance one might view foreign investment as a net positive, but history always serves as a stark reminder of what outside powers have done to the wealth of Africa. Today it appears that Africa is poised for another international scramble for her resources, however this time it seems that foreign interests are using the carrot over the stick being sure to maintain some semblance of good optics and ethics.
The biggest foreign investor right now on the continent is China, through trade and government loans China has sunken it’s teeth deep into Africa and the rest of the world should be alarmed. The alarm is warranted due to just how China does business with African governments; in a typical scenario an African nation will put out a call for bids on a particular project (for this case let us say building a bridge) and dozens of companies and firms with submit bids in good faith. However some companies along with the bids also engage corrupt officials with bribes and pay offs, Chinese firms are notorious for these practices. Often these bribed government officials the go on to approve and select the bids of the Chinese companies, it should also be noted that most of the Chinese firms that are awarded bids are in fact owned and operated by the Chinese government (this point is important). In many cases these Chinese firms fail to correctly complete the projects and often use sub par materials and methods.
In addition to gaining the bulk of the infrastructure projects in many African nations the Chinese government is also loaning billions to the continent a year; and trending to increase rapidly in the next decade. Kenya, Ethiopia and Egypt are some of the biggest borrowers. Although by many metrics these loans are not yet critical they set in motion dangerous patterns and open many African nations to additional exploitation. In many cases these loans come with extreme terms and stipulations (such as ownership in public assets), so much so that that The United States, IMF and other international organizations have sounded the alarm. The former US Secretary of State Rex Tillerson’s recent tour of the continent was an attempt to offer African nations another option for lending and infrastructure development. Tillerson also announced an additional 533 million dollars in Aid to the continent, the US is doing this to counterbalance China and their growing influence.
Africa seems to be entering a period reinvention and innovation and the world is taking notice considering the continent’s history with outside powers, Africans should be careful from whom they accept help from and what form that help comes in. Being sure not to repeat the horrors and abuses of the past.