Poking the Panda does not serve EAC

The Tanzania government recently revealed that total Chinese investments in the country had surpassed $4 billion. China, the home of the Giant Panda, has indeed become a reliable ally in helping develop  several African countries.

True, there maybe one or two differences here and there, especially when it comes to competing with local traders and industrial relations, but on the whole relations have not been too bad.

More important, the Chinese continue to be generous with their money when it suits them and don’t charge too highly when borrowing on a commercial basis.

However, there are some quarters of the international community who view this relatively huge spending on Africa by the Chinese as part of a ulterior motive to loot the continent.

The Chinese have consistently denied this. Then again, the whole issue of human rights is often bogged down by whose perspective you are using. For their part, Africans are in desperate need of better roads, new railways and other vital infrastructure.

Consequently, it does not help to poke sensitive spots when your benefactors  openly insist ‘how you run your country is your business; we are just here to help out where we can’. They expect the same attitude from those African countries they invest in. Besides this is the time to make friends with a rising phenomenon.

It makes good sense for the East African Community countries not to be too swayed by what other people think in the pursuit

The International Energy Agency’s World Energy Outlook 2014 projects that China will become the world’s largest consumer of oil by the early 2030s. According to the US Energy Information Administration (EIA), the country will import over 66 percent of its total oil by 2020 and 72 percent by 2040.

China imports just over half of its crude oil from the Middle East, which holds nearly 62 percent of the world’s reserves. According to the EIA, the Middle East supplied 2.9 million barrels per day, or 52 percent of China’s imported crude volume in 2013. China’s second-largest source of crude imports for that year was Africa, from which it imported 1.3 million barrels per day, or 23 percent. Its largest African suppliers of oil are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and Libya. 

In the latter half of 2014, China took advantage of plummeting crude oil prices by filling strategic petroleum reserves to hedge against its heavy reliance on imported energy. But some experts say that China’s slowing economic growth and cutbacks in coal mining may be contributing to the country’s energy slowdown and weakening demand for oil.

Sub-Saharan Africa has plenty of oil and gas. It is only natural that the Chinese take interest in the continent’s development. As they often like to put it, ‘a win-win’ situation.

However while the majority of Africa’s exports to China are in oil, it also exports iron ore, metals, and other commodities, as well as a small amount of food and agricultural products. At the same time, China exports a range of machinery and transportation equipment, communications equipment, and electronics to African countries.

The domination of Chinese firms in major African infrastructure projects has also caused some bad blood. But they have an advantage. Not only are many Chinese companies state-owned, they are also flexible to the conditions they have to work under.

Africans have long grown the age of being lectured and nagged. Certainly, there may be occasions when it is necessary. However when it comes to business, there are always other alternatives. Before the Chinese stepped up, that choice was not there. Now it is and Africans should not waste it.

Source: East African Business Week, Uganda.