How Africa could benefit more from Asia through trade

While East Africans in their enlarged community are striving to improve on their fortunes, there are more opportunities for South-South trade and commerce that could herald interesting times for Africa. There are two countries in Asia that have emerged as economic giants whether we like it or not. These are China and India, the latter almost celebrating her 65th independence anniversary from British rule, which falls on 15th August. India attained her independence from the British following the Indian independence movement remarkable for largely attaining peaceful non-violence resistance and civil disobedience led by the Indian National Congress. China and India are countries whose economies are some of the fastest growing in the world. Both countries’ appetite for Africa’s commodities and precisely, raw materials is to say the least, unprecedented.No doubt, Chinese Yuan and India’s rupees are increasingly finding their way into Africa’s economies, and Western powers are understandably worried that they are losing their hitherto unchallenged influence in the resource-rich continent. Could this be the second scramble and partition of Africa? The first scramble for Africa was done in a fairly brutal fashion. Otto Von Bismarck and his fellow statesmen presiding over the redivision of Africa in the comfort of Berlin, cutting pieces of land and allocating them at will to this or that power, oblivious of the consequences of their actions, sowed the current seeds of discord among neighbours in our continent. The genesis of our regional and continental challenges, whether in East, Central, North, Southern Africa or the Maghreb, can be traced from the actions of the statesmen who met at Berlin nearly 130 years ago! The competition for resources in Africa usually pits Chinese enterprises that are financially backed by Beijing’s deep pockets against Western companies that often have shareholders to consider are “by and large acting independently of their government’s desires”. According to Shinn, “if the Chinese government wants to encourage an engagement in the DRC, they can make it happen. If the United States wants its companies to get involved in the DRC all they can do is say. ‘look, there’s an opportunity there, why don’t you go explore it?’ and if they want to explore it, they do and if they don’t they don’t”. The current rise in economic growth in a number of African countries is increasing the demand for Asian manufactured goods. These trends may be disturbing to Africa’s North-South commerce with the European Union (EU) and the United States in which trade flows have been stimulated largely by preferential arrangements. The problem with Africa today is that the media have largely focused on the negative side of our continent to the detriment of the good things that may be taking place. For instance, during the 2008-2011, about 35 per cent of the continent’s population resided in countries where growth was 5.5 per cent or higher – and interestingly these were non-oil producing countries that have had oil and performing poorly--from Nigeria to Gabon and to several others. There are analysts who call this, the curse of oil. But that is another story. That there is an emerging class of African economic “success stories” is something we should celebrate as Africans, especially outside of the oil producers. Our media in Africa loves to focus on the tragic scenes that are newsworthy. Despite this however, trade record in most of Africa remains poor owing to the continent’s small, landlocked countries and high degree of geographic segmentation. Besides two regional powers, namely South Africa and Nigeria both of which account for 55 per cent of the continent’s economic activity, 18 countries, according to the World Bank, account for 36 per cent of Africa’s population. These countries have grown in a sustained manner over the last decade or so. Africa’s physical and human geography is something to reckon with. It has for instance the largest number of countries per square area of any developing region, with each country sharing borders with, on average, four to five neighbours. Rwanda for instance, like all African countries, through the Berlin Conference of 1884-5, found herself mutilated in the form of borders, dividing her people. The result of this scenario is that except in South Africa and Nigeria, is a small and shallow markets and hence making it costly to trade in Africa. But the good news is that over the last 15 years, trade flows between Africa and Asia have increased rapidly making Asia Africa’s second leading important destination after the United States.

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How Africa could benefit more from Asia through trade