Asian interest means Africa needs new economic vision

While these concerns require attention, Africa’s most important challenge is to reconstruct its relations with the rest of the world through its long-term economic objectives.

China’s trade with Africa was worth $10 billion in 2000 and is projected to exceed $110 billion in 2011.

India too has significantly increased its presence on the continent. India’s trade with Africa was $3 billion in 2000 and is projected to rise to $70 billion by 2015.

The surge in interest in Africa by China and India requires a different approach that does not view the continent as a helpless victim of foreign influence.

To that end African countries are seeking to replace classical foreign policy that focuses on access to markets in return for raw materials with a new vision of economic diplomacy.

Africa has started shaping its economic diplomacy through regional economic and trade integration. For example, this June Africa launched negotiations to merge three regional trade blocs into a “Grand Free Trade Area” spanning the continent from Cape Town to Cairo. The trade area will cover 27 countries with a combined GDP of about $1 trillion and a combined population of over 700 million.

The trade will involve adding value to natural resources, expanded manufacturing, and investing revenue from natural resources in economic foundations such as infrastructure and technical training.

The lessons learned through intra-Africa trade will inform the way the continent relates to the rest of the world.

Africa’s determination to become a global economic actor will focus diplomatic relations with China and India on issues such as infrastructure, skills development, market access, and agricultural land.

Achieving Africa’s trade-integration goals will depend on the extent to which it can invest in adequate infrastructure (energy, transportation, irrigation and telecommunications). It is estimated that the continent will need to invest over $50 billion a year in the next decade to meet its economic-growth objectives.

China has a head-start on infrastructure investment in Africa and India has offered to deploy its railways expertise. Infrastructure investments will require greater consideration of issues such as corruption, ecological damage and cost escalation. Very soon, many of the investments being made will come under closer scrutiny and their governance will be called into question.

The second area of cooperation involves Africa’s determination to build the requisite technical capacity to upgrade the labor productivity of its people.

This is an area where China and India have demonstrated experience. India’s long tradition in building technical institutes and its new effort to create a new species of universities that focus on innovation and entrepreneurship will align well with Africa’s emerging focus on technical training.

China, on the other hand, has shown remarkable creativity in linking universities to the productive sector through regional development efforts. The lessons from these efforts, as well as its focus on engineering education, could form its second-generation cooperation with Africa.

Africa is currently focusing on expanding internal regional markets. But quite soon it will be starting to look outward. Access to foreign markets for Africa’s manufactured goods will become a key feature of the continent’s economic diplomacy.

It is estimated that Africa’s manufactured exports will double in the next decade. But with enhanced focus on engineering and business training, growth in this sector could be faster than currently estimated. Access to foreign markets and competence in international trade will become an essential part of Africa’s relations with other nations.

Finally, there is the contentious issue of foreign investment in Africa’s agricultural land by Chinese and Indian firms.

Many of the deals have been aptly referred to as “land grabs.” Many others represent foreign direct investments that attract technology, build local expertise, foster food security, generate foreign revenue and create employment. Good practices that advance the latter will help improve the image of China and India in Africa.

Africa is relating to China and India separately through summit diplomacy. This is normal in the early stages of such arrangements. The time has come to explore the prospects of convening Africa-China-India tripartite consultations. This might also help diminish the perception that China and India are competing for Africa’s resources and create a transparent platform for economic diplomacy.

The opinions expressed in this commentary are solely those of Calestous Juma.