A new report by the Economic Intelligence Unit (EIU), says that China plans to continue to invest in Africa’s natural resources, and may increase expenditure on agriculture. Asia sees Africa’s youthful population as a source of labour for its manufacturing companies and a market for its consumer goods. Although trade should be reciprocal, the continent’s trade deficit is large as it continues to import significantly more than it exports. In recent years, the West’s already fragile reputation in Africa has worsened. The only western institution still properly active seems to be the IMF, while China on the other hand has, broadly speaking, kept up its commercial operations. As Chinese loans became more popular in helping to fund major infrastructure projects across the continent, some African leaders expressed worry that their countries were becoming too over-reliant on the Asian nation. Although this recent plan to increase trade with Africa by China seems to imply that the move away from an over-reliance is not happening, many governments on the continent are now more aware of the so-called ‘Chinese debt trap’ that countries like Zambia and Angola fell into post-Covid, and as such are able to better pick and choose which trade/financial flows with China works for them. Bilateral trade between China and Africa rose 35% in 2021 from 2020 to $254bn, with exports from the continent hitting a record $106bn. Currently, Nigeria is Africa’s biggest importer from China while South Africa is the biggest exporter. Other major exporters include Angola and the DRC. All three are big producers of metals or oil.
SOURCE: THE AFRICA REPORT