Another Scramble for Africa?

Before I expound China’s motives, it must be understood that Africa requires such investments to escape the privation many countries have experienced. The primary reasons behind the evident and extensive poverty are regretful consequences of slavery and colonialism, both having left Africa in ruins by violating communities through the theft of the workforce. Moreover, the prevalence of corruption in governments inhibits economic and social development. These factors have left African countries underdeveloped, but this is changing – in part due to Chinese expenditure upon infrastructure, and an increase in foreign direct investments.

China’s motives for investing in Africa vary. For instance, China seeks geopolitical and economic influence over African nations. China’s modern trade links with Africa date back to a deal with Algeria, Morocco, then-Sudan, Somalia, and Egypt in the 1950s, offering economic and military support to encourage revolutions, resulting in sovereign states under Chinese influence. More recently, Another enterprise, the China-Africa Cooperation Forum, includes almost all African states (due to its recognition of Taiwan, China lacks diplomatic ties with eSwatini) and meets triennially, with the most recent taking place in Beijing, 2018, resulting in investments - In October 2019 a Chinese-built $1.5 billion railway route between Nairobi and Naivasha in Kenya, attached to a previous $3.2 billion project linking the ports of Mombasa and Nairobi in 2017. Unveiled in 2013, China’s Belt and Road initiative aims to improve trade routes to Africa before the 100th anniversary of the People’s Republic of China in 2049. Other similar investments include an extension of the port of Djibouti, the Doraleh Multi-purpose port, Nigeria’s first standard-gauge railway, and a pledge to provide satellite television to 10,000 African villages at the 2015 Johannesburg Summit of the China-Africa Cooperation Forum. Whilst some help China establish ties, many of these projects extend China’s influence by allowing countries to trade goods with the BRIC economy more easily.

The emerging superpower also seeks to gain natural resources, including oil and gas, through such relationships. Although China has goals of producing 3 million barrels of oil a day by 2023, it will need to find new oil source to help achieve this; its domestic oil production has fallen due to natural depletion. As a result, Chinese companies are pursuing oil, and the abundant natural resources to be mined in African countries – the US government predicts 80%1 of China’s crude oil to be imported by 2030. A quarter of Africa’s oil is already exported into China, with 10.4% ($24.9 billion) of China’s oil coming from Angola alone in 2019. The oil companies behind such operations are attempting to place themselves as global players in the international oil market through funding the production of oil supplies. Three companies stand out: China’s National Petroleum Corporation (CNPC), the China National Offshore Oil Corporation (CNOOC), and the China Petroleum and Chemical Corporation (SINOPEC) have taken an almost equal share in the predicted $15 billion development in the Upstream sector. This figure exceeds the $10 billion sum that China has put towards similar activities in South America, confirming the Chinese view Africa to be a promising region to support their increasing energy demands, alongside other projects, like the $37 billion Three Gorges Dam. The China National Offshore Oil Corporation (CNPC), now the largest Chinese entity investor in Nigeria, has a majority stake in an Australian drilling project of the coast of West Africa’s Guinea-Bissau, by resource explorer FAR Ltd. The Nigerian National Petroleum Corporation has voiced support for Chinese investment, coinciding with the continent’s richest man, Aliko Dangote, building a $9 billion oil refinery in Lagos (Africa’s largest). Furthermore, the CNPC has signed a contract with the government of Benin to operate a 1980-kilometre crude oil pipeline, the biggest the CNPC has made in Africa to date. This deal indicates that Africa is increasingly viewed as China’s solution, allowing them to achieve their aim of increasing oil production on time. Sino-African bilateral mining deals regarding mineral resources have also heightened in number, with organisations comparable to China-Union Investment competing for a stake in copious quantities of ores. In 2008, China-Union Investment invested $2.6 billion to acquire Bong Mines, Liberia, to mine iron ore. Part of their deal with the Liberian government paving the road to a town, Kataka, helping expand Liberian infrastructure, as well as profiting from the export of resources. Therefore, it could be stated that China’s increasing interest in Africa could be down to natural assets.

In summary, the increase in Sino-African relations over the past 20 years has been a result of China’s effort to become a global superpower through gaining influence over African economies and by investing in African resources, benefitting China through increasing the GDP of both China’s and African countries’ economies, meaning increased goods and services for all firms in an economy, due to increased wages as a result of such investments, allowing Africa to finally prosper, as governments have money to inject back into the economy through the circular flow of income. Although some economists may argue that China is taking advantage of LEDCs, I have explained how African countries advantage themselves and their people, leading me to conclude that recent Sino-African interests do not hail a repeat of the selfish ‘Scramble to Africa’ of 100 years ago.