Will Africa take advantage of China-America scramble for resources?

Three weeks ago, my friend and I visited one of the busiest craft markets in Lilongwe, Malawi.

My colleague has a huge passion for African wooden carvings. As we walked from one stall to another, he spotted one piece which he liked very much, and the negotiations started.

The initial price was $100, but we tried to negotiate to what we thought was a reasonable price of $50.

Just as we thought we had struck a deal, another buyer showed up and suddenly the attention shifted to the new guy. In a flash, the price for the same piece went up to $200.

Without hesitation, the new buyer pulled out $200 from his wallet and handed it over to the salesman. And the piece was gone.

The salesman apologised, but reminded us that he was in business of selling, and sometimes to the highest bidder.

When you look at the stampede for African resources by America and China in the last decade, you are tempted to think that this is the time for Africa to take advantage and benefit from the two competing global forces.

For the first time since the era of the Slave Trade, African trade is transforming and shifting from the west to the east.

Chinese investment and trade with Africa is rising quickly. Since 2000, Chinese trade with Africa has more than tripled.

Whereas China only accounted for 7% of African imports in 2003, imports from Africa grew to an astounding 87% in 2004 alone.

Over a million Chinese experts have been deployed in 40 of African countries to facilitate the exploration of resources.

This is backed by an investment package of over $100 billion by 2009, with trade between Africa and China surpassing $100 billion by 2010. China means business in Africa.

At the same time, US engagement with Africa has increased significantly, especially since 2001. US trade with Africa increased by 37% in 2004 and the amount of oil going from West Africa to the US now exceeds that from Saudi Arabia. The US now trades more with Africa than with the Russia and the former Eastern bloc combined.

As a result of this, Chinese and American trade and investment strategies have moved Africa to the centre stage in global oil and security politics.

We can theoretically conclude that Africa now holds the balance of power as far as oil and security is concerned only that very few of our leaders realise that.

In 2005, Africa witnessed an economic growth rate of 5,2% largely due to Chinese and American oil investment and Chinese demand for minerals. This is the fastest ever economic growth in Africa.

What does the enhanced geo-economic competition between the West and the East portend for Africa? Will the continent capitalise on this new scramble for Africa? Or it is simply going to strengthen authoritarian states and fuel direct conflict, or open up space for alternative policy paradigms?

The presence of China in the raw materials market should surely give African countries the sovereign power to determine the prices. Raw materials sold to China are pegged at the current international prices. That is a new phenomenon for Africa.

Since the colonial epoch, prices for African raw materials were determined by the buyer — Western countries — a situation which short-changed the development of the continent.

It is surely one thing to be a prolific market for raw materials and it is another to make sense out of this potentially good opportunity to become a global super power.

Recent studies suggest that the Chinese appetite for raw materials will slow down in the next two decades and we should ask ourselves if we want to continue to be known as a market for raw materials while others are developing their countries.

Isn’t it time we used such an opportunity to industrialise? Of course China and America may not back us on that route as it means creating more competition for resources.

But industrialisation creates jobs for our people in addition to adding value to the raw materials that are exported unprocessed.

The continent has been surviving on a hand-to-mouth basis simply because we don’t produce much and yet we are sitting on natural resources.

One of the reasons why we don’t have value addition industry is lack of funds. And China is offering an opportunity for African leaders to think of the long-term development of the continent. Is someone listening?

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