Today, Africa is at a crossroads. With 54 countries and 1.2 billion people, Africa remains far behind the rest of the world in terms of human development, infrastructure, social amenities, industrialisation and technology. Africa is in this situation despite sitting on vast amounts of natural resources and having received Western aid for over half a century. Many other countries in the developing world have made tremendous economic progress in the past half century. Africa must as of necessity find a new way, a new development approach. Over the past 15 years or so, China has demonstrated commitment to forging strong development cooperation with Africa. The commitment was given renewed impetus at the Forum on China-Africa Cooperation (FOCAC) held in Beijing in September 2018.

Africa’s lost opportunity in development cooperation with the West

Africa has received Western aid for most of its history since Independence. For many African countries, Western aid has become an integral and indispensable source of budget funding. Western aid has, however, been characterised by major pitfalls. These include: i) inadequacy; ii) tying; iii) bureaucracy; iv) uncertainty/volatility; and v) disharmony/fragmentation. Western aid to Africa has generally been ineffective. This was affirmed by the Paris (2005) and Accra (2008) Declarations on Aid Effectiveness. In particular, after over half a century of receiving Western aid, Africa still faces major development challenges, including: i) inadequate human capital; ii) large infrastructure deficit; iii) technological backwardness; iv) high indebtedness; and v) endemic poverty. Africa’s development cooperation with the West has, indeed, been a lost opportunity for the continent.

The new opportunity offered by China in development cooperation with Africa

China has had development cooperation with Africa going back many decades. This cooperation has gained greater momentum in the past decade and a half in the face of China rising to the status of global economic superpower. China’s development cooperation with Africa is enshrined in the Forum on China-Africa Cooperation (FOCAC) agreement reached in Beijing in September 2018.

FOCAC laid down a comprehensive framework for Chinese development cooperation with Africa under the FOCAC Action Plan (2019-21). The plan has several key components, including: i) general development cooperation ii) investment and economic cooperation; iii) industry partnering and industrial capacity cooperation; iv) infrastructure development; v) energy and natural resources; vi) agriculture, food security and food safety; vii) trade; viii) science and technology cooperation and knowledge sharing; and ix) finance.

China is also currently Africa’s biggest trading partner. China has increased its investment in Africa substantially in the past decade and a half. Chinese FDI stock in Africa increased from a mere US$ 0.5 billion in 2003 to US$ 43.3 billion in 2017, representing almost a 90-fold increase over the period.

China has investment presence in 36 of Africa’s 54 countries. By 2020, Chinese direct investment in Africa is projected to top US$ 100 billion. Despite this phenomenal increase, however, Chinese investment in Africa as a percentage of the world total stood at only 2.4% in 2017. This indicates that there is huge potential for Chinese investments in Africa. The investments can be leveraged on Africa’s huge untapped natural resources. And FOCAC offers a great opportunity to make this happen.

Africa certainly has huge development potential to be unlocked, similar to China’s 30–40 years ago. Chinese investment in Africa, along with necessary reforms, offers the opportunity for the continent to replicate China’s success story. Africa is indeed a continent of both opportunity and risk.

What Africa needs are investors who are prepared to take the risk in order to unlock the opportunity. And China offers real hope in that regard. In fact, the scale and the extent of Chinese actual and planned trade and investment in Africa make China “the new development partner for Africa.”

Notably, FOCAC is premised on Africa leveraging its own internal resources to promote its development and alleviate poverty on the continent. This approach contrasts with Africa’s long dependence on externally-sourced Western aid that pushed Africa into indebtedness while failing to deliver expected development outcomes.

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Dr. John K. Kwakye is Director of Research at the Institute of Economic Affairs (IEA), Ghana. He presented the above paper at a seminar organised by the IEA and the Chinese Embassy in Ghana. The seminar highlighted the opportunity for Africa to forge a new development cooperation with China after its challenged engagement with the West over more than half a century.