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More than half of Africa's one billion population has a mobile phone - and not just for talking. The power of telephony is forging a new enterprise culture, from banking to agriculture to healthcare. Africa has experienced an incredible boom in mobile phone use.
In 1998, there were fewer than four million mobiles on the continent. Today, there are more than 500 million. In Uganda alone, 10 million people, or about 30% of the population, own a mobile phone, and that number is growing rapidly every year.
In the west, we have been adapting mobile phones to be more like our computers: the smartphone could be described as a PC for your pocket. In Africa, where a billion people use only 4% of the world's electricity, many cannot afford to charge a computer, let alone buy one. The most dramatic example of this is mobile banking.
Mobile phones carry huge economic potential in undeveloped parts of Africa. A 2005 London Business School study found that for every additional ten mobile phones per 100 people in a developing country, GDP rises by 0.5%. As well as enabling communication and the movement of money, mobile networks can also be used to spread vital information about farming and healthcare to isolated rural areas vulnerable to the effects of drought and disease. Fewer than four out of 100 Africans currently use the internet, and broadband penetration is below 1%. Texting isn't just for late night conversations and killing boredom - it's used to conduct business all over Africa.
Underestimating the potential of Africa
People in the West are fundamentally uneducated about Africa. And it's not only the people in the street, even the educated classes know little about the continent. That's why companies and institutions systematically underestimate the potential of Africa. Two stereotypes dominate Europe's image of Africa. The crisis stereotype emphasises hunger, poverty, conflicts, corruption and widespread mismanagement, thus creating an image of helplessness, incompetence and inferiority.
The exotic stereotype accentuates the natural beauty of the landscapes, the colourful cultures expressed in textiles, music and artefacts, the mysticism and the smiles of the poor.
While both stereotypes have more than a grain of truth in them, at least two important aspects are lost in the caricatures: first, Africa's many important assets outside and beyond the stereotypes, such as widespread vibrant entrepreneurship, sophisticated intellectual elites and the ambition to be seen as a respected partner in the global community; and second, the diversity between regions, countries, cultures and socio-economic classes.
Generalising about Africa based solely on the examples of the crises in Congo-Kinshasa, Somalia and Zimbabwe is short-sighted and misleading. The differences between countries like Ghana and Nigeria or Rwanda and Kenya are at least as big as the differences between any two European or Asian countries.
An entrepreneurial generation on the rise
African economies score some of the highest growth rates in the world, political stability is improving and a young, highly entrepreneurial generation is on the rise. And while many of Africa's problems deserve global attention, the solid business success stories beyond the crisis and the exoticism must be told as well. Not only do they provide surprising insights into the present and future of the continent, they are also the key to continuing the current rise of Africa.
During the last decade, Africa has outgrown the world economy and, despite the recent financial crisis, this trend is projected to continue in the future. For some technologies Africa even exhibits the highest growth rates in the world, mobile communication being the most prominent example.
Despite these developments, the global technological gap is most persistent, poverty is denser than elsewhere and less is known about technology in Africa when compared with other developing regions. The combination of a highly dynamic region with excellent opportunities for development on the one hand, and a desperate need to improve the quality of life for a large part of the population on the other, makes Africa an exciting and worthwhile project target.
Looking to the future
According to the IMF's 2010 World Economic Outlook Database, by 2015, sub-Saharan Africa's GDP is expected to near 2.5 trillion international dollars, of which the top ten economies account for almost 2 trillion international dollars. Interestingly, at the projected growth rates, Nigeria will overtake South Africa and become the largest African economy well before 2050. One driver of this economic growth lies in the high resource prices that have favoured African economies for most of the decade. But this is far from the whole story.
Angola and Nigeria have certainly grown on the back of oil and gas. However, a long list of African countries has managed to diversify their economies significantly. In Côte d'Ivoire, Namibia, Zambia, Senegal, Cameroon, Kenya, Ghana, Mozambique, Tanzania and Uganda, the contribution to GDP of the manufacturing and service sectors, such as construction, banking, telecom and retail, surpassed 65% in 2008, and is continuing to rise.
These changes are reflected in the mirror windows of the business districts' office buildings. They can be seen in coffee shops, where young urban professionals work at their laptops; they can be seen on Facebook, where millions of Africans network; they can be seen in the increasing number of African blogs and discussion forums.
Technology supports many of these developments and Africa's 21st century will be a century of technology-driven change. This makes one think that Thabo Mbeki's vision of an African Renaissance might well have been a real strategic revelation!
Richard Firth is the CEO and chairman at MIP Holdings.
Only 11 days since taking over as Chinese president, Xi Jinping is already in Africa.
He spent Monday in Tanzania and will next attend the BRICS summit in seaside Durban, South Africa, before winding up his tour in Congo-Brazzaville. Speaking in a new Chinese-built conference hall in Dar es Salaam, Tanzania's largest city, Xi conveyed a continuation of China's policy toward Africa under the previous top leadership.
"China will continue to offer, as always, necessary assistance to Africa with no political strings attached," according to Reuters. He added, "We get on well and treat each other as equals."
Xi hailed Africa as the "continent of hope and promise," and spoke of Beijing's "sincere friendship" with Africa. He also indirectly addressed the criticism that China is only interested in exploiting Africa's natural resources.
"Africa belongs to the African people," he said, according to Agence France-Presse. "In developing relations with Africa, all countries should respect Africa's dignity and independence." Xi is no newcomer to the continent—this is his sixth visit to Africa, the last being in 2010.
Throughout the trip, Xi and his team will be announcing an array of trade and development deals. At the BRICS summit, the Chinese are expected to jointly back a development bank along with fellow members Brazil, Russia, India and South Africa. Xi is scheduled to sign around 20 trade, development and cultural agreements, before journeying to Durban.
He renewed an offer of $20 billion in loans to Africa between 2013 and 2015 and noted that trade between China and Africa had reached some $200 billion in 2012. However, much of the attention may be focused not on Xi but rather on his glamourous wife Peng Liyuan, a famous folk singer in China who stole the show during the first stop on the trip, in Russia.
China imports many raw materials, including minerals, from resource-rich Africa. Chinese imports from the continent reached $113 billion last year, a 20-fold increase over a decade. GlobalPost senior correspondent Benjamin Carlson called Xi's visit Africa "a fascinating, intriguingly symbolic second choice for a foreign visit after Russia."
Xi's visit may be a sign that China's primarily economic interest in the continent may be extending to political influence as well. "Chinese media is filled with glowing reports about China's harmonious relationship with African countries now, so clearly there's a propaganda imperative to portray relations as improving now," Carlson said.
Source: Global Post
He was speaking in Tanzania - the second country he has visited since taking power 11 days ago. Addressing leaders at a conference hall built by China in Dar es Salaam, he said trade between China and Africa topped $200bn (£130bn) last year.
Mr Xi and his Tanzanian counterpart Jakaya Kikwete signed 16 different trade agreements including improvements to Tanzania's hospitals and ports, and the building of a Chinese cultural centre. The Chinese leader is expected to arrive in South Africa on Tuesday to take part in a summit of the emerging economies, known as Brics (Brazil, Russia, India, China and South Africa).
He will wrap up his African tour with a visit to Congo-Brazzaville.
Outlining China's policy on Africa, Mr Xi pledged to help the continent achieve "independent and sustainable development"
He said Beijing is "not only interested in shipping out raw materials but wants a relationship of equals that would help the country develop", Reuters reports.
China has become one of Africa's major trading partners in recent years, largely based on the trade in mineral products, including oil.
Intra-Africa Trade, Investment Key to Continent’s Development
A new generation of African entrepreneurs and businesses is emerging.
They are challenging traditional incumbents and introducing new business models and strategies that are driving domestic and cross-border growth within Africa. Kenya’s ICT companies are investing in Rwanda and are now looking to enter Nigeria, while United Bank for Africa and other Nigerian banks are rapidly expanding into other African countries. In 2009 alone, South Africa invested $1.6 billion (FDI outflows) into other African countries. In telecoms, MTN, a South African company, now operates in 21 countries across Africa, and Glo, a Nigerian mobile operator, is operating in the Republic of Benin, Ghana and Côte d’Ivoire.
To better understand the profound changes underway in Africa’s business environment and how governments and entrepreneurs can open the way for more trade and investment by Africans into Africa, the Lagos-based Tony Elumelu Foundation and the Johannesburg-based Brenthurst Foundation are commissioning a series of in-depth case studies across a number of key sectors. They will highlight how intra-African commerce could propel the continent to greater economic prosperity.
Africa’s statistics speak of tremendous potential: the continent is the size of China, Mexico, Europe, India, the United States and Japan combined. The population will soon surpass China’s, with a middle class as big as India’s. Africa has enjoyed more than a decade of sustained GDP growth, which has often outstripped many other parts of the world.
There is frustration, however, that Africans are not reaping the rewards of the current global investor confidence as much as they should. The mass export of commodities to the East and the West doesn’t effectively facilitate the ‘trickle-down’ effect of wealth.
Home-grown investments, focused on value-adding industries, are a major key to changing this dynamic.
Africans still seem to choose products and investments from outside the continent. They prefer to export outside Africa rather than to trade, manufacture and add value within. Many African countries continue to trade raw materials but they don’t have the capability to refine or process, so they end up importing the finished products from outside of Africa.
We need to understand what is preventing Africa from being home to value-adding and value-creating businesses. Why, for example, is Africa’s agricultural richness not generating an integrated growing and processing industry as it has done in Brazil?
Africa requires an environment that facilitates investment and greater market integration. The current weaknesses – corruption, high start-up costs, poor infrastructure, and so on – are well known. But our study will also shed light on the legal, social and cultural differences within Africa that restrict cross-border investments.
There needs to be integrated regional production chains within Africa where Africa’s raw materials are processed into finished goods that are traded locally and regionally. Regional trading blocs, including the Tripartite Free Trade Area, which encompasses the East African Community, the Common Market for Eastern and Southern Africa and the Southern African Development Community would thus thrive, paving the way for a Continental Free Trade Area that would produce and trade high value-added goods internally.
Greater market integration in Africa will lead to a significant reduction in the cost of doing business and alleviate some of the problems associated with securing work permits and labour mobility.
Over the long-term, Africa’s competiveness will hinge to a great degree on how well we educate our young people. Traditionally, the most talented Africans have sought educational advancement and careers overseas, but a combination of transformational educational technology, growing opportunities at home and the poor global economic climate could see this brain drain becoming a brain gain. Retaining talent, home grown or otherwise, is critical. Policy that enables skilled Africans to work across our borders more easily will help achieve this goal.
Both the Tony Elumelu Foundation and the Brenthurst Foundation believe that Africa’s ability to engage in intra-African business will be one of the key determinants of its future social and economic development.
Never have circumstances been more propitious for African business. A rise in disposable incomes, high rates of urbanisation and a fast-growing working-age population speak of an emerging class of purchasers of consumer goods, financial services and infrastructure as well as a potential source of manpower for industrialisation and agricultural development.
Africans must explore ways to move beyond regional differences and competition to build Africa together from within, so that Africans at all levels become the primary beneficiaries of the continent’s growth
• Elumelu is the Chairman of Heirs Holdings Limited
• Oppenheimer, is a South African businessman and member of the De Beers Diamond mining dynasty
Nigeria, a country with a large domestic market of more than 160m people, spends huge resources importing consumer goods from China that should be produced locally. We buy textiles, fabric, leather goods, tomato paste, starch, furniture, electronics, building materials and plastic goods. I could go on.
The Chinese, on the other hand, buy Nigeria’s crude oil. In much of Africa, they have set up huge mining operations. They have also built infrastructure. But, with exceptions, they have done so using equipment and labour imported from home, without transferring skills to local communities.
So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism. The British went to Africa and India to secure raw materials and markets. Africa is now willingly opening itself up to a new form of imperialism.
The days of the Non-Aligned Movement that united us after colonialism are gone. China is no longer a fellow under-developed economy – it is the world’s second-biggest, capable of the same forms of exploitation as the west. It is a significant contributor to Africa’s deindustrialisation and underdevelopment.
My father was Nigeria’s ambassador to Beijing in the early 1970s. He adored Chairman Mao Zedong’s China, which for him was one in which the black African – seen everywhere else at the time as inferior – was worthy of respect.
His experience was not unique. A romantic view of China is quite common among African imaginations – including mine. Before his sojourn in Beijing, he was the typical Europhile, committed to a vision of African “progress” defined by replicating western ways of doing things. Afterwards, when he became permanent secretary in the external affairs ministry, the influence of China’s anti-colonial stance was written all over the foreign policy he crafted, backing liberation movements in Portuguese colonies and challenging South Africa’s apartheid regime.
This African love of China is founded on a vision of the country as a saviour, a partner, a model. But working as governor of Nigeria’s central bank has given me pause for thought. We cannot blame the Chinese, or any other foreign power, for our country’s problems. We must blame ourselves for our fuel subsidy scams, for oil theft in the Niger Delta, for our neglect of agriculture and education, and for our limitless tolerance of incompetence. That said, it is a critical precondition for development in Nigeria and the rest of Africa that we remove the rose-tinted glasses through which we view China.
Three decades ago, China had a significant advantage over Africa in its cheap labour costs. It is losing that advantage as its economy grows and prosperity spreads. Africa must seize the moment. We must encourage a shift from consuming Chinese-made goods to making and consuming our own. We must add value to our own agricultural products. Nigeria and other oil producers need to refine crude; build petrochemical industries and use gas reserves – at present often squandered in flaring at oil wells – for power generation and gas-based industries such as fertiliser production.
For Africa to realise its economic potential, we need to build first-class infrastructure. This should service an afro-centric vision of economic policies. African nations will not develop by selling commodities to Europe, America and China. We may not be able to compete immediately in selling manufactured goods to Europe. But in the short term, with the right infrastructure, we have a huge domestic market. Here, we must see China for what it is: a competitor.
We must not only produce locally goods in which we can build comparative advantage, but also actively fight off Chinese imports promoted by predatory policies. Finally, while African labour may be cheaper than China’s, productivity remains very low. Investment in technical and vocational education is critical.
Africa must recognise that China – like the US, Russia, Britain, Brazil and the rest – is in Africa not for African interests but its own. The romance must be replaced by hard-nosed economic thinking. Engagement must be on terms that allow the Chinese to make money while developing the continent, such as incentives to set up manufacturing on African soil and policies to ensure employment of Africans.
Being my father’s son, I cannot recommend a divorce. However, a review of the exploitative elements in this marital contract is long overdue. Every romance begins with partners blind to each other’s flaws before the scales fall away and we see the partner, warts and all. We may remain together – but at least there are no illusions.
Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria since 2009.
Geldof, the lead singer of the Boomtown Rats, sprung to global prominence with his role in Band Aid to raise money for the Ethiopian famine. The single sold nearly 12 million copies; the Live Aid concerts raised £150m. For these efforts Geldof received an honorary knighthood and was elevated to a spokesman for African development.
But the reason for the famine that catapulted him to prominence had less to do with the weather than the Ethiopian government's policy to withhold food shipments to rebel areas and to spend nearly half of its gross domestic product on the military. Aid became a tool of the counter-insurgency strategy, being left to rot or distributed according to political objectives. The same political issues shape African development choices today and these, not external activism on aid, are key to the continent's future.
Regardless, Geldof still fails to understand that African development solutions, like the problems themselves, are principally domestic, and have to be founded in sustainable business logic not political gestures or NGO activism. Writing in the Observer last week, he praised Tony Blair (and Gordon Brown) for the 2005 Gleneagles G8 summit for shaping "not only our politics but that of the world" by cancelling debt and doubling aid.
This act, he claims, released "tens of millions of children into schooling, setting off an intellectual stampede in the continent with the fastest-growing middle-class in the world. Aid sent money into basic health, education and agriculture, providing stability at a fundamental community level and allowing stretched societies a moment to pause … while helping governments acquire the capacity they needed to govern."
The timing, he says, was critical since it was exactly at this moment the Chinese became interested in Africa and a digital take-off occurred. What aid had to do with Chinese investment and its demand for natural resources is beyond me and I suspect most other Africans. Nor has aid infused government capacity allowing cellphones to revolutionise communications and business. Indeed the latter has occurred precisely because governments are out of the way for once. It has absolutely nothing, nada, zilch to do with the western aid industry, as difficult as that is for them to accept.
Regardless, Geldof claims that "I have no doubt that it is because of Gleneagles that I and colleagues were able to raise hundreds of millions of dollars to invest in Africa and create jobs". It is precisely in spite of Gleneagles and its reinforcement of a helpless continent deserving charity that private investment has been raised. Beijing's needs, not the proselytising of Geldof or Blair, has transformed Africa from a problem to be solved through aid to a commercial opportunity to be entertained through investment.
What Geldof does not realise is that, while there is a role for humanitarian spending in emergencies, using aid as a tool for development is at best dubious. This is why aid agencies continually shift their methods and focus from agriculture and infrastructure to governance and back again.
Such inefficiencies, along with the premium on administering aid through Byzantine bureaucracies (not for nothing has the World Bank's staffing increased from 650 people in 1960 to 10,000 today, two-thirds of whom are based in the centre of the poverty-stricken world, Washington DC) help to explain why, as the economist Bill Easterly points out, donor countries have absurdly argued to spend $3,500 annually to lift a poor person's income to above $365 a year. This is why remittances from Africans abroad, which have trebled in a decade to an estimated $60bn annually (just under double the donor flow), are a more efficient source of external financing than aid.
Yet Geldof argues that "surely now the [aid] model has been proved". Nowhere does he mention the aspect of widening democracy, key to Africa's developmental and growth success and to improving governance. Little wonder. The record of development spending is that it can distort accountability of governments more than it improves governance, underwriting the very bad governance practices which are at the heart of underdevelopment.
It can also discourage the development of the sectors where Africa has distinct advantages. For example aside from oil, South Sudan is pinning its hopes on what its officials say is "its virgin agriculture potential". But what inducement is there for this when international agencies say they will aid the "at least four million people" likely to experience "food insecurity" in that country in 2013?
Africans themselves realise this. Which is one reason why the debate in and about the continent has shifted from perennial questions of what others can do for Africa, to one where Africa helps itself. Short-term band aids have given way to longer-term development plans, at the heart of which are local political challenges, arguments and compromises.
Of course there is much to do in Africa, which Geldof glosses over in his Gleneagles glow. While the Irishman lauds the continent as the "coming economic giant", it's still a very poor place, with per capita income around a tenth of the global average, and its middle-class little more than 10% of its one billion people. Rapid population growth means that education is critical, as is providing the governance context to attract investment to create the jobs so necessary for political stability and, in a virtuous cycle, for the right policy choices to be made.
For this reason Gleneagles was important. Not for being the moment that aid was doubled and debt relieved, but the moment when external largesse as the solution for African development was taken off the table. Not by Blair, Brown or Geldof, for that matter, but by Africans.
Dr Greg Mills heads the Johannesburg-based Brenthurst Foundation and is the author of Why Africa is Poor – and What Africans Can Do About It (Penguin)
In stark contrast to the neglected emphasis placed on infrastructure development in the United States and Europe, China spends around $500 billion annually on infrastructural projects, with $6.4 trillion set-aside for its 10-year mass urbanization scheme, making it the largest rural-to-urban migration project in human history. China’s leaders have mega-development in focus, and realizing such epic undertakings not only requires the utilization of time-efficient high-volume production methods, but also resources - lots and lots of resources. It should come as no surprise that incoming Chinese president Xi Jinping’s first trip as head of state will take him to Africa, to deepen the mutually beneficial trade and energy relationships maintained throughout the continent that have long irked policy makers in Washington.
The new guy in charge - who some analysts have suggested could be a populist reformer that empathizes with the poor - will visit several African nations with whom China has expressed a desire to expand ties with, the most prominent being South Africa. Since establishing relations in 1998, bilateral trade between the two jumped from $1.5 billion to 16 billion as of 2012.
Following a relationship that has consisted predominately of economic exchanges, China and South Africa have now announced plans to enhance military ties in a show of increasing political and security cooperation. During 2012’s Forum on China-Africa Cooperation meeting, incumbent President Hu Jintao served up $20 billion in loans to African countries, which were designated for the construction of vital infrastructure such as new roads, railways and ports to enable higher volumes of trade and export. In his address to the forum, South African President Jacob Zuma spoke of the long-term unsustainability of the current model of Sino-African trade, whereby raw materials are sent out and manufactured commodities are sent in.
Zuma also stated, "Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other economies. We certainly are convinced that China's intention is different to that of Europe, which to date continues to attempt to influence African countries for their sole benefit." Xi’s visit highlights the importance China attaches to Sino-African ties, and during his stay, he will attend the fifth meeting of the BRICS, the first summit held on the African continent to accommodate leaders of the world’s most prominent emerging economies, namely Brazil, Russia, India, China, and South Africa. The BRICS group, which accounts for around 43% of the world's population and 17% of global trade, is set to increase investments in Africa’s industrial sector threefold, from $150-billion in 2010 to $530- billion in 2015, under the theme "BRICS and Africa: partnership for development, integration, and industrialization".
With focus shifting toward building up the continent’s industrial sector, South Africa is no doubt seen as a springboard into Africa and a key development partner on the continent for other BRICS members. Analysts have likened the BRICS group to represent yet another significant step away from a unipolar global economic order, and it comes as no surprise. As Eurozone countries languish with austerity cuts, record unemployment and major demand contraction, the European Union in South Africa's total trade has declined from 36% in 2005 to 26.5% in 2011, while the BRIC countries total trade increased from 10% in 2005 to 18.6% in 2011. The value and significance of the BRICS platform comes in its ability to proliferate South-South political and economic ties, and one should expect the reduction of trade barriers and the gradual adoption of economic exchanges using local currencies. China’s ICBC paid $5.5 billion for a 20% stake in Standard Bank of South Africa in 2007, and the move has played out well for Beijing - Standard has over 500 branches across 17 African countries which has drastically increased availability of the Chinese currency, offering yuan accounts to expatriate traders.
It looks like the love story that has become of China and Africa will gradually begin shifting its emphasis toward building up a viable large-scale industrial base. Surveys out of Beijing cite 1,600 companies tapping into the use of Africa as an industrial base with manufacturing's share of total Chinese investment (22%) fast gaining on that meted out to the mining sector (29%). Gavin du Venage, writing for the Asia Times Online, highlights how Beijing’s policy toward Africa aims to be mutually beneficial and growth-promoting, “Chinese energy firm Sinopec teamed up with South African counterpart PetroSA to explore building a US$11 billion oil refinery on the country's west coast. Refineries are notoriously unprofitable, with razor-thin margins. Since South Africa has no significant oil or proven gas reserves itself, the proposed plant would depend on imports, and would have to serve the local market to be viable. The plant will therefore serve the South African market and not be used to process exports to China. This is only the latest of such investments that demonstrate a willingness by Chinese investors to put down roots and infrastructure in Africa. It also shows that China's dragon safari is about more than just sourcing commodities for export.”
Indeed, and Beijing’s dragon safari is loaded with a packed itinerary, with Mao-bucks flying everywhere from Tanzania and the Democratic Republic of the Congo, to Nigeria and Angola. Xi Jinping will also grace the Angolan capital of Luanda, where China had provided the oil-rich nation with some $4.5 billion in loans since 2002. Following Angola’s 27-year civil war that began in 1975, Beijing played a major role in Angola's reconstruction process, with 50 large-scale and state-owned companies and over 400 private companies operating in the country; it has since become China's largest trading partner in Africa with a bilateral trade volume at some $20 billion dollars annually. Chinese Ambassador Zhang Bolun was quoted as saying how he saw great potential in further developing Sino-Angolan relations and assisting the nation in reducing its dependence on oil revenues while giving priority to the development of farming, service industries, renewable energies, transport and other basic infrastructure.
Chinese commercial activities in the Democratic Republic of the Congo have significantly increased not only in the mining sector, but also considerably in the telecommunications field. In 2000, the Chinese ZTE Corporation finalized a $12.6 million deal with the Congolese government to establish the first Sino-Congolese telecommunications company, while the Kinshasa exported $1.4 billion worth of cobalt to Beijing between 2007 and 2008. The majority of Congolese raw materials like cobalt, copper ore and a variety of hard woods are exported to China for further processing and 90% of the processing plants in resource-rich southeastern Katanga province are owned by Chinese nationals. In 2008, a consortium of Chinese companies were granted the rights to mining operations in Katanga in exchange for $6 billion in infrastructure investments, including the construction of two hospitals, four universities and a hydroelectric power project, but the International Monetary Fund intervened and blocked the deal, arguing that the agreement between violated the foreign debt relief program for so-called HIPC (Highly Indebted Poor Countries) nations.
China has made significant investments in manufacturing zones in non-resource-rich economies such as Zambia and Tanzania and as Africa’s largest trading partner, China imports 1.5 million barrels of oil from Africa per day, approximately accounting for 30 percent of its total imports. In Ghana, China has invested in Ghanaian national airlines that serve primarily domestic routes, in addition to partnering with the Ghanaian government on a major infrastructural project to build the Bui Hydroelectric Dam. China-Africa trade rose from $10.6 billion in 2000 to $106.8 billion in 2008 with an annual growth rate of over 30 percent. By the end of 2009, China had canceled out more than 300 zero-interest loans owed by 35 heavily indebted needy countries and least developed countries in Africa. China is by far the largest financier on the entire continent, and Beijing’s economic influence in Africa is nowhere more apparent than the $200 million African Union headquarters situated in Addis Ababa, Ethiopia - which was funded solely by China.
China’s deepening economic engagement in Africa and its crucial role in developing the mineral sector, telecommunications industry and much needed infrastructural projects is creating "deep nervousness" in the West, according to David Shinn, the former US ambassador to Burkina Faso and Ethiopia. During a diplomatic tour of Africa in 2011, former US Secretary of State Hilary Clinton insinuated China’s guilt in perpetuating a creeping “new colonialism”. When it comes to Africa, the significant differences in these two powers' key economic, foreign policy strategies and worldviews are nowhere more apparent. Washington has evidently launched its efforts to counter China's influence throughout the African continent, and where Beijing focuses on economic development, the United States has sought to legitimize its presence through counterterrorism operations and the expansion of the United States Africa Command, better known as AFRICOM - a outpost of the US military designated solely for operations on the African continent.
During an AFRICOM in 2008, Vice Admiral Robert T. Moeller cited AFRICOM’s guiding principle of protecting “the free flow of natural resources from Africa to the global market,” before emphasizing how the increasing presence of China is a major challenge to US interests in the region. Washington recently announced that US Army teams will be deployed to as many as 35 African countries in early 2013 for training programs and other operations as part of an increased Pentagon role in Africa - primarily to countries with groups allegedly linked to al-Qaeda. Given Mr. Obama’s proclivity toward the proliferation of UAV drone technology, one could imagine these moves as laying the groundwork for future US military interventions using such technology in Africa on a wider scale than that already seen in Somalia and Mali. Here lays the deep hypocrisy in accusations of Beijing’s purported “new colonialism” - China is focused on building industries, increasing development, and improving administrative and well as physical infrastructure - the propagation of force, which one would historically associate with a colonizer, is entirely absent from the Chinese approach.
Obviously, the same cannot be said of the United States, whose firepower-heavy tactics have in recent times have enabled militancy and lawlessness, as seen in the fallout of the North Atlantic Treaty Organization's 2011 bombing campaign in Libya with notable civilian causalities. As Xi Jingping positions himself in power over a nation undertaking some of the grandest development projects the world has ever known, Beijing’s relationship with the African continent will be a crucial one. While everything looks good on paper, Xi’s administration must earn the trust of their African constituents by keeping a closer eye on operations happening on the ground. The incoming administration must do more to scrutinize the conduct of Chinese conglomerates and business practices with a genuine focus on adhering to local environmental regulations, safety standards and sound construction methods. The current trajectory China has set itself upon will do much to enable mutually beneficial economic development, in addition to bolstering an independent Global South - a little less red then how Mao wanted it, but close enough.
The U.S. is markedly widening its role in the stepped up French-led military campaign against extremists in Mali, providing sensitive intelligence that pinpoints militant targets for attack, U.S. and allied officials disclosed.
U.S. Reaper drones have provided intelligence and targeting information that have led to nearly 60 French airstrikes in the past week alone in a range of mountains the size of Britain, where Western intelligence agencies believe militant leaders are hiding, say French officials.
The operations target top militants, including Mokhtar Belmokhtar, the mastermind of January's hostage raid on an Algerian natural gas plant that claimed the lives of at least 38 employees, including three Americans. Chad forces said they killed him on Saturday, a day after saying they had killed Abdelhamid Abou Zeid, the commander of al Qaeda in the Islamic Maghreb's Mali wing.
French, U.S. and Malian officials have not confirmed the deaths of Mr. Belmokhtar or Mr. Zeid, citing a lack of definitive information from the field. But they say the new arrangement with the U.S. has led in recent days to a raised tempo in strikes against al Qaeda-linked groups and their allies some time after the offensive began in January. That is a shift for the U.S., which initially limited intelligence sharing that could pinpoint targets for French strikes.
On Monday, French Army Chief Admiral Edouard Guillaud said Mr. Zeid was likely dead, but couldn't confirm it.
"It is likely, but it is only likely. We can't have any certainty—it would be good news—because we didn't recover the body," Adm. Guillaud said in an interview on the Europe1 radio station.
On whether Mr. Belmokhtar has been killed, Adm. Guillaud urged "extreme caution," as "there is always the risk of being contradicted later by a dated video." He said recent comments on Islamist Internet forums insist that Mr. Belmokhtar is alive.
The elite Chadian unit fighting in Mali was trained by U.S. special operations forces who have been working in Chad, Chadian and U.S. officials said this weekend.
The unarmed U.S. drones played a key role in the recent offensive in which French and Chadian forces succeeded in homing in on and ambushing a group of militants in the Adrar Tigharghar mountains of northern Mali, near the border with Algeria, French officials said.
The U.S. decision to authorize the Pentagon and U.S. spy agencies to feed detailed targeting information directly to French forces came after a lengthy U.S. administration debate over how directly to aid French strikes, according to U.S., French and other Western officials.
The arrangement represents a test of President Barack Obama's new strategy for dealing with the growing terrorist threat in Africa. Instead of sending American ground troops and armed drones to take direct action, the U.S. where possible will try to provide logistical, technical and intelligence support to enable local and regional partners to pull the trigger, officials say.
The approach could be a model for future drone operations in a region where the U.S. has few established air bases of its own, and as a way to limit Washington's role in lethal operations, officials say.
A Western official said the Adrar Tigharghar operation itself, in which the U.S. has provided targeting information to facilitate French and Chadian strikes, was an example of a new counterterrorism strategy of working "by, with and through" local forces and a "rare North Africa success story."
For weeks, U.S. spy agencies and administration lawyers debated whether providing actionable intelligence to the French to facilitate strikes would make the U.S. a "cobelligerent" in a widening conflict with an al Qaeda affiliate that U.S. intelligence agencies don't yet see as a direct threat to the U.S. homeland.
Administration officials initially cited concerns that furnishing actionable intelligence to the French would spur the affiliate, al Qaeda in the Islamic Maghreb, or AQIM, to start targeting American interests in the region. They were also concerned the move would make the U.S. culpable for lethal operations that it wouldn't control.
Advocates of helping the French locate targets for strikes argued that providing the information was in the U.S. interest because it would bolster a key ally, reduce the risk that the French offensive would drag on and help eliminate militants of increasing concern to the U.S., including Mr. Belmokhtar.
A senior U.S. official said the Americans ultimately decided they weren't cobelligerents because the U.S. was supporting the French rather than joining the campaign.
In recent years, a Joint U.S. Special Operations Task Force in Africa has provided Chad's Special Anti-Terrorism Group, the unit involved in the operations last week that allegedly killed Mr. Belmokhtar and Mr. Zeid, with equipment, training and logistical support, officials say.
American forces didn't accompany the Chadian unit to Mali, U.S. officials said, as Mr. Obama has so far limited the American role to provide intelligence and logistical support.
Chad said it has lost 26 soldiers in the Mali offensive. A senior Chadian government official confirmed that the Special Anti-Terrorism Group deployed last month to Mali and involved in the battle in the Adrar Tigharghar mountains had been trained by U.S. instructors.
"We have a good cooperation with the U.S.," Chadian Minister of Communication Hassan Sylla said.
Under the new arrangement for Mali, unarmed U.S. Reapers scour the deserts and mountains using their sensors to search for so-called patterns of life—communications and movements deemed by the U.S. to be telltale signs of militant activity, officials said.
The Americans then pass the raw video feeds and other real time data to French military and intelligence officers who decide if, how and when to use the information. French fighter planes or ground forces sometimes swoop in to attack. The information is also shared with African forces involved in the French-led campaign, including the Chadians, officials said.
In Pakistan and Yemen, other areas where U.S. has for years conducted counterterrorism operations against al Qaeda and its allies, there is no need for manned aircraft because the U.S. uses armed drones, which can both pinpoint targets and strike.
Relying on manned aircraft in Mali raises the time between acquiring a target and firing upon it.
France would like to buy its own fleet of unarmed American Reapers—three to start. U.S. officials said it would take time to approve such a sensitive technology transfer. As a result, French officials have suggested they may turn to Israeli drone makers instead. France's own drones, two of which operate in Mali, are less advanced and can't intercept militant communications as effectively.
The unarmed Reapers now helping the French in Mali are flown out of a base in nearby Niger, which recently signed a security deal with the U.S. that set the stage for the Pentagon to expand its presence in the country.
Current and former intelligence officials compared the cooperation in Mali to the way the U.S. helps Turkey target Kurdish separatist fighters along Turkey's border with Iraq. There, video feeds and other intelligence collected by U.S.-piloted Predator drones are relayed to a joint intelligence center in Ankara, where U.S. analysts sit next to their Turkish counterparts, who in turn can call in airstrikes.
U.S. military and intelligence officials have long held up the fusion center in Ankara as a successful model that could be applied elsewhere to support key allies. But such arrangements have downside risks, as evidenced by a December 2011 Turkish airstrike that killed 34 civilians. A U.S. drone tracked the group before the airstrike.
ADAM ENTOUS in Washington, DAVID GAUTHIER-VILLARS in Paris and DREW HINSHAW in Accra, Ghana
Dr. Nnamdi Azikiwe, the first Nigerian President used to say: “No condition is permanent.” In past decade or more, Africa with all her short comings, vulnerabilities and sufferings appeared to be in a perpetual condition of hopelessness. The disease, political unrest and poverty were making permanent residents in Africa. With these deplorable situations, Africa became a testing ground for all abstract theories and hypothesis.
The Western media and financial institutions were busy running around to attend to the mundane problems of the continent, without even asking Africans to speak and say what Africa want from the West. The media was quick to treat Africa as a country and not as a continent.
When a political and economic breakdown occurred in one country, it is immediately referred as an African problem. The International Monetary Fund (IMF) was quite busy roaming from one African country to another, actively doling out financial prescriptions and medicines that made the perceived patients even sicker. Africa was introduced to austerity measures, otherwise known as Structural Adjustment Program. It was an indeed an adjustment from poverty to penury, and to a more stringent life style.
Economist magazine, a quintessential western media in May of 2000 chose to amplify the existential problems of three African countries namely Sierra Leone, Ethiopia and Mozambique with a captioned, “Hopeless Africa.” And the economist write-up was characteristized by barrage of put downs and condescension that the magazine later regretted.
In the ‘Hopeless Africa’‘, an article from Economist the ‘abysmal Africa’ was initiated with this awful permeable:
“AT THE start of the 19th century, Freetown was remote and malarial, but also a place of hope. This settlement for destitute Africans from England and former slaves from the Americas had become the main base in west Africa for enforcing the British act that abolished the slave trade. At the start of the 21st century, Freetown symbolises failure and despair. The capital of Sierra Leone may be less brutalised than some other parts of the country, but its people are nonetheless physically and psychologically scarred by years of warfare, and this week they had to watch as foreign aid workers were pulled out. The United Nations' peacekeeping mission had degenerated into a shambles, calling into question the outside world's readiness to help end the fighting not just in Sierra Leone but in any of Africa's many dreadful wars. Indeed, since the difficulties of helping Sierra Leone seemed so intractable, and since Sierra Leone seemed to epitomise so much of the rest of Africa, it began to look as though the world might just give up on the entire continent.”
Economist at the time of the write up, forget to mention the international role blood diamond played in the Sierra Leone conflict and the ECOWAS military intervention that successfully brought to the end of the conflict. Temporary amnesia was needed to put Africa in her suppose place.
And Economist continues, “All, however, is not well. Since January, Mozambique and Madagascar have been deluged by floods, famine has started to reappear in Ethiopia, Zimbabwe has succumbed to government-sponsored thuggery, and poverty and pestilence continue unabated. Most seriously, wars still rage from north to south and east to west. No one can blame Africans for the weather, but most of the continent's shortcomings owe less to acts of God than to acts of man. These acts are not exclusively African—brutality, despotism and corruption exist everywhere—but African societies, for reasons buried in their cultures, seem especially susceptible to them “
The barrage of put down and heaps of degradation were not yet enough: “Sierra Leone manifests all the continent's worst characteristics. It is an extreme, but not untypical, example of a state with all the epiphenomena and none of the institutions of government. It has poverty and disease in abundance, and riches too: its diamonds sustain the rebels who terrorise the place. It is unusual only in its brutality: rape, cannibalism and amputation have been common, with children often among the victims.”
Those stereotypes that Africa was always associated with: “cannibalism” and “brutality,” were slipped into the write-up and it was beginning to sound like Conrad’s Heart of Darkness.
Economist: Africa rising, A hopeful continent
“No condition is permanent” and Africa’s dire condition has gradually but steadily changing and improving. The economic climate in Africa is becoming bright, even brighter. While the rest of the world was mired in anemic economic growth, African economy is growing at 5;3 percent for the past three years and projected to grow even more in 2013 and 2014. Nigeria, an oil-rich nation is projected to grow up to 7 percent in 2013 and 2014. Investors are rushing to Africa not for altruistic reasons but because African market offers the highest returns of any market in the world.
Nigeria capital market yields higher returns more than European stock markets. While the problems of debts and deficits are gradually diminishing in Africa, many Euro-nations are mired in serious debts and deficits with bloated public sectors and insatiable thirst for spending.
Economist is reversing her stand on Africa and beginning to sing praises for Africa. Truly, no condition is permanent: With a new captioned, “Africa rising, A Hopeful Continent,” in the March 2013, Economist writes:
“A booming economy has made a big difference. Over the past ten years real income per person has increased by more than 30%, whereas in the previous 20 years it shrank by nearly 10%. Africa is the world’s fastest-growing continent just now. Over the next decade its GDP is expected to rise by an average of 6% a year, not least thanks to foreign direct investment. FDI has gone from $15 billion in 2002 to $37 billion in 2006 and $46 billion in 2012.”
It continues, “Many goods and services that used to be scarce, including telephones, are now widely available. Africa has three mobile phones for every four people, the same as India. By 2017 nearly 30% of households are expected to have a television set, an almost fivefold increase over ten years. Nigeria produces more movies than America does. Film-makers, novelists, designers, musicians and artists thrive in a new climate of hope. Opinion polls show that almost two-thirds of Africans think this year will be better than last, double the European rate.”
What will Africa, Economist and world take away from this reversal in the story line? Time and situations never remain same. Yes, Late Dr. Nnamdi Azikiwe was right, “No condition is permanent.”
Speaking at Transparency International's (TI) Annual Anti-Corruption Lecture, John Githongo, Kenya's former anti-corruption tsar, spoke with cautious optimism. On the one hand, he proclaimed: "Today we are witnessing a unique convergence of potentially positive developments in the fight against corruption - one that has not existed since the end of the Cold War". Yet at the same time he also emphasised that we are still facing "the continuing reality of systemised corruption".
Indeed corruption is a major problem which continues to undermine institutions, economies and societies - not least in Africa. In TI's Corruption Perceptions Index 2012, 90% of African countries scored below 50, (0 being "highly corrupt", and 100 representing a lack of corruption) and Somalia was deemed to be the worst offending African country with a score of just 8, joint with Afghanistan and North Korea.
But despite the picture sometimes painted, corruption is by no means a uniquely African phenomenon. In fact, taking a closer look at corruption and expanding our understanding to beyond just bribes and kickbacks enables us to see that corruption exists across the world and that even in 'African' corruption, developed countries are deeply implicated.
A global phenomenon
Firstly, a closer look at TI's index shows that 70% of all countries scored less than 50 out of 100, with a global average of just 43. Corruption is a problem with which most of the world is still struggling, developed countries included.
In a telling case in 2008, for example, German multinational Siemens was found to have had a slush fund totalling more than €1.3 billion ($1.7 billion) to help win overseas contracts from 2001 to 2007. The company was investigated for bribe-paying, corruption and falsifying corporate books and, after much plea bargaining and negotiating, was fined a record $800 million.
This kind of corruption can sometimes also be part and parcel of African corruption in that such companies are on the lesser-examined supply side of bribes while African governments are on the demand side. In 2010, for instance, BAE Systems, one of the world's largest defence contractors, pled guilty to criminal charges regarding contracts won from countries including Tanzania and South Africa. BAE was investigated by the UK's Serious Fraud Office in a long-running case and ended up paying £286 million ($460 million) in fines.
The global financial crisis, which was caused in large part by the dubious and often fraudulent activities of financial corporations, "woke us up in Africa to a new perspective of corruption", explained Githongo in his speech. "It became a matter of concerted interest among Africa's chattering classes - long accustomed to Western lectures on corruption - that this is not a uniquely African or even a Third World thing."
A broader conception of corruption
Additionally, if we are to truly understand the challenges of corruption faced by developing countries, we must recognise that the kinds of kickbacks and bribes mentioned above - and measured by TI's indices - are just one dimension of corruption. Taking a broader perspective, we can see that while many activities may not be corrupt in terms of explicitly contravening specific laws, they may nevertheless undermine human rights, democracy and transparency.
And when we recognise this, the extent to which developed countries are implicated in the problems facing Africa is brought into stark relief.
There are many important examples of this, one of which is the role of governmental export credit agencies. Many Western leaders, such as British Prime Minster David Cameron, have emphasised the need to "tackle the causes of poverty, not just its symptoms".
But despite this, many Western governments - through export credit agencies - support projects abroad that not only involve economic corruption but are linked to human rights abuses and the maintenance of inequality. Furthermore, to add insult to injury, they also often generate sovereign debt in the process which then constrains governments' capacities domestically.
Funding, fuelling and facilitating corruption
One government heavily implicated in this kind of corruption and accumulation of 'toxic' debt is the UK and its British Export Credits Guarantee Department (ECGD). The ECGD helps exporters invest in 'high-risk' projects - many of which allegedly involve corruption, environmental destruction, or arms sales leading to human rights abuses.
The Jubilee Debt Campaign estimates, for example, that around one-quarter of Egypt's $150 million debt to the UK comes from loans for military equipment which was used to prop up the regime of former president Hosni Mubarak. Similarly, 11% of Zimbabwe's current debt to the UK is owed for the purchasing of 1,000 police Land-Rovers which were used in internal repression.
More broadly in Zimbabwe, according to Tim Jones, Policy Officer at Jubilee Debt Campaign, "Debt has played a key role in the tragedies that many Zimbabweans have suffered over the last twenty years. Dodgy projects, debt repayments and failed economic policies contributed to economic decline."
Indeed, a report by the Jubilee Debt Campaign also suggests that whilst the British government asserts that aid is conditional on the pursuit of anti-corruption measures by the recipient country, they are nevertheless providing financial support (through export credits) for deals which could involve corruption.
The report explains, for example, that the agreement for the 1986 Turkwel Gorge Hydro-Electric Power Station in Kenya was alleged to have involved considerable payments to high-level Kenyan authorities.
These individuals stood to gain personally from a deal whose shortcomings they were well-aware - namely, that the final contract price was more than double what the government would have had to pay through a competitive tender process, that the proposed location of the power station was on dangerous tectonic fault lines, and that the flow of the Turkwel river from which power was to be generated was unreliable. But nevertheless, the ECGD issued a multi-million dollar guarantee to a British consulting firm to work on the doomed project. The Kenyan press has since dubbed the project a "stinking scandal", and nearly 30 years later Kenya still owes money to the ECGD.
In fact, crucially compounding these problems is the sovereign debt they lead to, often meaning citizens are paying for the very means by which they are oppressed or led to suffer.
In Egypt, for example, $22 million will be spent this year servicing debt accrued by the Mubarak regime for military purchases. Despite a pledge by the Liberal Democrats, the junior party in the ruling coalition government, to invalidate 'dictator debts', the UK is demanding this debt be repaid despite the fact Mubarak was overthrown and widely condemned by the international community.
Elsewhere, some countries including Nigeria, Lesotho and Gabon reportedly owe more than 50% of their national debt to Export Credit Agencies such as the British ECGD. And some studies have suggested that a number of countries are spending more each year on servicing their debt than they do on all public services combined.
While not all of these loans are necessarily economically corrupt, they contribute to a climate of broader corruption in which moral standards are seemingly bypassed in pursuit of economic gain by developed countries.
At the crossroads
Githongo entitled his TI-UK Annual Anti-Corruption Lecture "Crossroads in the fight against corruption" - a poignant reminder that whilst the potential for change is perhaps more prominent than ever, the actions of the international community, governments and corporations can hamper real progress.
In his closing words, Githongo argued that "the moment is unique, in part because the wider population, especially the youth, are demanding [reform] already". But local efforts can only be effective if they are not contradicted by wide-scale corruption at the upper echelons of public life, including at the international level. It is important that governments of developed countries recognise this demand for change and implement a real transformation in their support of developing countries.
Corruption, toxic debt and dubious arms deals continue to plague developing countries, but the blame for this cannot be solely placed on those in the developing world. Instead, developed countries must look a little closer to home and realise that true change requires transparency and accountability at all levels and in all states.
Phillippa Lewis is a freelance writer and a Cardiff University graduate, having completed a BA Politics and Philosophy degree at undergraduate level and a MScEcon International Relations post-graduate degree. Interests include maritime piracy, humanitarian intervention and good governance.
Phillippa Lewis is a freelance writer and a Cardiff University graduate, having completed a BA Politics and Philosophy degree at undergraduate level and a MScEcon International Relations post-graduate degree. Interests include maritime piracy, humanitarian intervention and good governance.