Part­ners in a new chap­ter for Africa

China Daily European Weekly - - Front Page - By EDITH MUTETHYA edith­mutethya@chi­nadaily.com.cn

It was crys­tal clear as the sec­ond China-Africa In­vest­ment Fo­rum wrapped up in late Novem­ber at the Four Sea­sons Re­sort in Mar­rakech, Morocco, that the eco­nomic part­ner­ship be­tween China and Africa was about to be­gin a new chap­ter that will be eq­ui­table and ben­e­fi­cial for both sides.

This fol­lowed ex­pres­sion of keen in­ter­est, by the more than 500 high­pro­file del­e­gates who at­tended the two-day event, in im­prov­ing bi­lat­eral trade and busi­ness re­la­tions be­tween the two part­ners. The del­e­gates from Africa and China were drawn from var­i­ous fields, in­clud­ing pol­i­tics, busi­ness and aca­demics.

From the dis­cus­sions, it was ev­i­dent that, de­spite Chi­nese in­vestors be­ing present in every sec­tor in Africa, ei­ther tra­di­tional or in­no­va­tive, the re­la­tion­ship be­tween the two part­ners has not reached its full po­ten­tial.

Ac­cord­ing to McKin­sey & Co, a world­wide man­age­ment con­sult­ing com­pany, rev­enues gen­er­ated in Africa by Chi­nese com­pa­nies could in­crease by 144 per­cent by 2025, an in­di­ca­tion that the time is ripe to start the new chap­ter of part­ner­ship.

Ad­di­tion­ally, with more than 1 bil­lion peo­ple and com­pet­i­tive la­bor costs, Africa is seen as epit­o­miz­ing the fu­ture of in­dus­try and the per­fect place for wel­com­ing the Chi­nese in­dus­try, at a time when global value chains are evolv­ing.

“African states should sup­port their pri­vate sec­tor in terms of struc­ture and fi­nanc­ing.” PAUL OBAMBI founder and CEO of Sapro Group

The rise of global value chains — the peo­ple and pro­cesses that are part of pro­duc­tion of goods or ser­vice as well as the in­ter­na­tional sup­ply and dis­tri­bu­tion pro­cesses — en­ables de­vel­op­ing coun­tries to be­come part of the pro­duc­tion chain with­out hav­ing to pro­duce a fi­nal prod­uct. As a re­sult, de­vel­op­ing coun­tries can ex­port value-added man­u­fac­tur­ing.

To fully ex­ploit Africa’s growth po­ten­tial in the frame­work of China-Africa re­la­tions, the del­e­gates agreed that there is a need to pro­mote part­ner­ships in new growth-en­hanc­ing sec­tors and to en­cour­age co­pro­duc­tion and lo­cal in­dus­trial sourc­ing. This is in ad­di­tion to cre­at­ing fi­nan­cial and le­gal frame­works that pro­mote trade and in­dus­trial suc­cess, they agreed.

Moulay Elalamy, the Moroc­can min­is­ter of in­dus­try, in­vest­ment, trade and dig­i­tal econ­omy, says Chi­nese and Africans share the same quest for de­vel­op­ment, and their strate­gic in­ter­ests seem to con­verge. Africa is look­ing to China in or­der to re­al­ize eco­nomic de­vel­op­ment and job cre­ation, while China needs Africa in or­der to im­prove its com­pet­i­tive­ness as well as gain ac­cess to the mar­ket of more than 1 bil­lion peo­ple, Elalamy says.

The African pop­u­la­tion is ex­pected to dou­ble by 2025, with one in every five peo­ple glob­ally ex­pected to be an African. Ur­ban­iza­tion, a growth engine, is also ex­pected to grow sig­nif­i­cantly. It has been es­ti­mated that 50 per­cent of Africans will be liv­ing in cities by 2030.

“Be­cause of its po­ten­tial and the mul­ti­plic­ity of its needs, Africa is un­doubt­edly a de­vel­op­ment force for China,” Elalamy says.

As an eco­nomic pow­er­house and a strate­gic global player, China is un­der­go­ing eco­nomic struc­tural changes, in­clud­ing in­creased em­pha­sis on do­mes­tic con­sump­tion.

Ad­di­tion­ally, the re­lo­ca­tion of part of Chi­nese in­dus­try is seen as be­com­ing in­creas­ingly nec­es­sary, in ef­forts to con­serve the coun­try’s com­pet­i­tive­ness. The growth of the tech­nol­ogy sec­tors and those re­lated to the emer­gence of the coun­try’s mid­dle class is also boom­ing.

Dur­ing the 19th Na­tional Congress of the Com­mu­nist Party of China in Oc­to­ber, Gen­eral Sec­re­tary Xi Jin­ping said China was com­mit­ted to the co­or­di­nated de­vel­op­ment of new types of in­dus­tri­al­iza­tion, com­put­er­i­za­tion, ur­ban­iza­tion and agri­cul­tural mod­ern­iza­tion.

This is in ad­di­tion to pro­mot­ing eco­nomic glob­al­iza­tion, with the aim of par­tic­i­pat­ing in it, and de­vel­op­ing a high­level open econ­omy. These struc­tural changes are seen as pre­sent­ing great op­por­tu­ni­ties for Africa.

To take full ad­van­tage of the op­por­tu­ni­ties, Elalamy says, Africa should work on in­dus­tri­al­iz­ing and re­struc­tur­ing its ex­ports, in or­der to re­duce the preva­lence of raw ma­te­ri­als, which ac­counts for 80 per­cent of its ex­ports.

“The China-Africa part­ner­ship has reached a ma­tu­rity stage that al­lows it to mi­grate to a more strate­gic stage, in line with the op­por­tu­ni­ties and pre­vail­ing chal­lenges,” Elalamy says.

Paul Obambi, the founder and CEO of Sapro Group, an ad­ver­tis­ing com­pany based in the Repub­lic of Congo, says Africa is un­doubt­edly the next fron­tier and there is a need to open up the con­ti­nent to part­ner­ships with China, among other global part­ner­ships.

He says the African part­ner­ship with China should fo­cus on the pri­vate sec­tor, which he sees as es­sen­tial for eco­nomic growth. The African pri­vate sec­tor should also take full ad­van­tage of the op­por­tu­ni­ties in the Chi­nese mar­ket, he adds.

Obambi says pol­i­cy­mak­ers should es­tab­lish a frame­work for the part­ner­ship that en­sures that in­vest­ments are mu­tu­ally sup­ported by gov­ern­ment pol­icy. Pol­i­cy­mak­ers should also sup­port Africa’s pri­vate sec­tor, he says.

“Sim­i­larly to the Chi­nese gov­ern­ment, which fully sup­ports its pri­vate sec­tor in­vestors ven­tur­ing into Africa, African states should sup­port its pri­vate sec­tor in terms of struc­ture and fi­nanc­ing,” Obambi says.

Mustapha Bakkoury, the coun­cil pres­i­dent of the Casablanca-Set­tat re­gion in Morocco, says China is an ideal part­ner for Africa be­cause the coun­try has a pos­i­tive trade bal­ance with Africa and has de­vel­oped tech­no­log­i­cal know-how. This will en­sure that the two part­ners will work to­ward a win-win sit­u­a­tion and greater shared pros­per­ity, Bakkoury says.

De­spite the fact that China can serve as an in­dus­trial ac­cel­er­a­tor on the African con­ti­nent, Bakkoury says there are cer­tain prin­ci­ples that are cen­tral to de­vel­op­ment of any coun­try, in­clud­ing hav­ing and valu­ing re­sources, hu­man cap­i­tal and fi­nanc­ing. If a coun­try lacks any of these, it must bring a part­ner like China on board to fill the gap, he adds.

Nev­er­the­less, Bakkoury says, Africa should raise its game and bring it­self closer to the de­vel­op­ment level across the world, which will be fa­cil­i­tated by new tech­nol­ogy.

“If Africa is to re­al­ize its de­vel­op­ment po­ten­tial, it has to pro­vide a more com­pre­hen­sive in­dus­trial pol­icy that al­lows bet­ter eval­u­a­tion of its nat­u­ral re­sources and also cap­ture part of the value-added by-pro­cess­ing, in or­der to fi­nance its other needs like health, ed­u­ca­tion and in­fra­struc­ture,” he says.

He says that since Africa con­sists of a rich va­ri­ety of coun­tries, Chi­nese in­vestors should not ap­proach the con­ti­nent as one ter­ri­tory.

Bakkoury says African di­ver­sity should be ad­dressed and t th formed into a sourc c com­pre­hen­sive­ness, ex­cep­tional de­mogra a near fu­ture.

“De­spite the strong g and the ex­pected dou u pop­u­la­tion within th e need to bear in mind th is quite low and it come ges in terms of de­velo need to find in­frastr frame­works that are ad gen­eral and spe­cific ment,” he says.

Ac­cord­ing to Bakko ou should con­sider re­gion de­vel­op­ment ini­tia­tive

Hakim Ab­del­moum Moroc­can In­dus­try an As­so­ci­a­tion, says Afri strate­gies in or­der to rer its part­ner­ship with Ch h

“Within the Sino-Af fr na has de­fined its stra a time for Africa to impr r the na­tional, sub­re­gio o lev­els,” Ab­del­moumen n

Not­ing that China is s its pri­vate sec­tor to exp xp moumen says the cont t on ge­og­ra­phy in sup p goals, see­ing Asia, th h Europe as the end poin n en­try gate. This would d strat­egy, Ab­del­moume e

One of the un­used o op Ab­del­moumen says, is s duce agri­cul­tural prod d year be­cause of its g both north and south o

This point was echoe di­rec­tor of Sin­ga­pore­tional’s South and Eas says Africa should lea ar helped its small-scale e pro­duc­tiv­ity.

“De­spite hav­ing goo od cap­i­tal, Africa’s yields s nent to im­port food t to Farm­ing should be t in­dus­tri­al­iza­tion, and C the con­ti­nent nav­i­gate e ges,” he says

Ramesh says the nex x ing value to agri­cultu u tion, China can transfe e

EDITH MUTETHYA / CHINA DAILY

Moulay Elalamy (fourth from left), Moroc­can min­is­ter of In­dus­try, In­vest­ment, Trade and Dig­i­tal Econ­omy, with Chi­nese in­vestors at the Sec­ond China-Africa In­vest­ment Fo­rum in Mar­rakech, Morocco on Nov 28.

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