In this article, Michael Kpade reflects upon China’s economic relations with the African continent through the lens of Africa’s historical and ongoing struggles with dependency, economic instability, and underdevelopment while arguing for a nuanced understanding of China’s role in Africa within the broader dynamics of global capitalism, advocating for policies that promote economic sovereignty and mitigate systemic crises inherent in global capitalism.
By Michael Kpade
The post-independence era of Africa (i.e between 1960 and 2000) has largely been perceived as a disappointing tragedy due to the failure of states to fully overcome the legacies of colonialism and dependency. Characterized by political instability, violent conflict and economic stagnation it has been dubbed the “Lost Decades.” This failure is the impetus that haunts the African political and economic machinery. In the wake of rising tensions between the United States and China, Africa has become the foreground of a vicious power struggle. Hence the emergence of a supposed ‘concern’ from the West about China’s role on the African continent. These concerns range from fear mongering about China’s ostensible colonialist project through varying narratives such as the debt trap, labor importation and the erosion of political agency. Yet, from an African perspective, the key concern is how one might evaluate the recent trends in capitalist expansion in Africa through the lens of economic history and political economy in order to inform policy-making geared toward economic sovereignty in the future.
Two primary mistakes are made in the traditional analysis of the China-Africa relationship. One is to interpret ‘Africa’ as a singular political and economic entity. The second is to homogenize the People’s Republic of China and the private Chinese enterprises. They are both structurally different and embody distinct socio-political implications. From a bilateral perspective, the economic reality of the China-Africa relationship is one of extreme power imbalance. As Eric Orlander, co-founder of the China Global South Project, put it here, “Africa is not important to China at all” as an economic partner. According to data from the Observatory of Economic Complexity, henceforth referred to as the OEC, in 2021 the total percentage of exports from African countries to China was about 4%, with each African country accounting for less than 1% of total economic activity. For Chinese imports from Africa, the percentage was a little over 3%, with South Africa and Angola accounting for 1% each. Conversely, the percentage of South African imports from China is about 21%, with exports amounting to 14%. Similar imbalances are reflected in the economies of major African nations like Angola, Nigeria and Ethiopia. In short, the bilateral relationship in Olander’s words is “one that is important to some African countries, one that is grossly imbalanced and one that is declining relative to the growth of the Chinese economy.”
However, this type of imbalanced relationship isn’t particularly new in the history of Africa’s economic development. The so-called lost decades was a period wrought with recessions, stagflation as well as boom and bust cycles on a global scale.The growth rate fell from 5.4% to a modest 2.8%. The ripples could be felt across the world, where the African economy remained relatively paralyzed for decades. There, from 1975 to 1990 the growth rate of GDP was consistently negative. By the year 2000, about two in every ten poor people were in Africa, an increase from the measure determined in 1970. GDP per capita had also decreased by 11% in about the same period of time. Furthermore, at the dawn of the 21st Century one of primary sources of economic support – Western aid fell dramatically ensuring that development in Africa had hit a fatal slump. (See here for more). Thus, it appears then that when the Western economy is thriving, Africa is barely making ends meet but when the West is in crisis, Africa is incapacitated. Indeed, it is this unequal relationship that scholars of the dependency school sought to investigate including Samir Amin, Walter Rodney and Raul Prebsich. It is the view of many but not all such scholars that the expansion of advanced economies occurs at the expense of developing countries by technical or deliberately exploitative means. (See The Laws of Worldwide Value by Samir Amin or How Europe Underdeveloped Africa by Walter Rodney). This increasing dependency coupled with the accelerating levels of poverty in the midst of aid, loans and various forms of ‘economic assistance’ from the IMF and World Bank only served to confirm and reinforce the view that underdevelopment in Africa was a result of military, political and economic efforts to systematically undermine growth.
Fahdel Khaboub, Associate Professor of Economics at Denison College, presents a useful theoretical framework for assessing the structural causes of crises of African economies. It consists of three main components: food deficits, energy deficits and low value added industrialization. Consider the example of Nigeria. In 2021, the OEC recorded the value of crude oil and petroleum gas as comprising almost 90% of Nigerian exports. On the import side, it reveals a shocking 18% characterized by refined petroleum oil followed by a complex portfolio of high value added materials and food products with wheat accounting for the second largest single import at 5%. Most African countries are endowed with different resources, business environments and other unique advantages and yet they face similar structural constraints highlighted by Khaboub. This includes an overreliance on food security even if it means borrowing to buy from outside rather than investing in agriculture or expanding partnerships with fossil fuel companies even if they can not guarantee sustained access to energy for all instead of investing in renewable energy. Even worse is dependency on expertise, technological services and parts or other high value goods that, in some cases African governments are forced to buy under the pretext of economic assistance.
Furthermore, they are rewarded by the IMF through loan approvals for parochially focusing on rudimentary exports including raw materials, cash crops and low value apparel which cannot afford the needs or the lifestyle of the country. As a result, they tend to experience sustained trade deficits which require borrowing to finance economic activity. This deficit results in the depreciating value of the national currency, accelerating the inability to meet the needs of the state. In addition, subsidies on agriculture, energy and health sectors can only be maintained in most at-risk countries by relying on either loans from foreign lenders, international financial institutions or measures by the central bank, where possible, to stabilize the economy thus ensuring that any debt trap also spirals into a cost of living crisis. In cases where the debt bubble bursts, the option to subsidize essential public goods disappear with IMF loans being dependent on imposing arguably inhumane taxes and other austerity measures further destabilizing the political environment (see Protests in Kenya and Ghana, Threats of Strike in Nigeria).
Khaboub’s analysis is remarkable in that it emphasizes, under the lens of international finance, the cyclical nature of the conditions that ensure underdevelopment in Africa. He makes a convincing case on how these structural deficits are not only by design but become necessary factors to achieve any semblance of economic stability, thus initiating a self-destructive cycle. Consequently, without radical strategic investments, that is investments focused on the long-view and geared towards building economic sovereignty, Africa will continue to exert passive agency in the face of neocolonial power.
The question remains; why would Africa consider China a more suitable partner for strategic investments? Of course, there are structural issues which are themselves the legacies of colonialism and of the neocolonial interventions aimed at undermining decolonial projects. In addition, there are at least two other factors. The first is political and related to the consistent popular rejection of sustained dependency on former colonial masters. Consider the examples of Ghana, Nigeria and Kenya. The leaders of each nation have had to deal with a public that is angry about its increased dependency on institutions that serve former colonial powers. Ghana’s parliament has been hit with internal bickering, shaming political opponents for seeking IMF support. Young Kenyans are protesting the IMF backed austerity package and the nation’s US backed military exploits in Haiti. Nigeria’s Tinubu is losing faith from the young as he too seeks to impose austerity measures that have been greenlit by the IMF. (See the following for more: Austerity in Nigeria, Squabbles in Ghana’s Parliament, Imperialism and Youth Protests in Kenya). Whether the ideological motives of the political parties are neoliberal, conservative or socialist, portraying oneself as independent, unswayed and constantly challenging international authority is the modus operandi of African political actors. This has become even more clear in Mali, Gabon and Burkina Faso after the recent coup d’etats which have gained popular support because of the deposing of western backed leaders, driving out western military personnel and other efforts to delink from the West (see Popular Support for Coups in West and Central Africa). For political reasons alone, African governments have a vested interest in finding alternative options to the highly unequal multilateral institutions and bilateral economic relationships with western states to decrease this dependency. The rise of China as a global leader is a unique opportunity for Africa in this regard.
The second factor is strategic and requires some historical context. Between the 1960s and 2000, orthodox economists diagnosed Africa’s “Lost Decades” as consequences of soviet style public policies or political and economic mismanagement despite the fact that many African countries were either forced or willing to operate their economies more liberally than most progressive nations at the time. The African consensus was that development could not occur without raising massive amounts of capital. This proved a tall task as Western partners saw in Africa mostly risks including political instability, humanitarian crises and the rise of HIV/AIDS. However, the fact that FDI inflows from China total nearly $112.34 billion between 2000 and 2022 at a time of decreasing Western investment says something unique about the vision China has of Africa compared to the West (see Boston University Global Development Policy Centre for more statistics). Deborah Brautigam, Director of the China Africa Research Initiative at Johns Hopkins University describes US companies as seeing “risks whereas China sees opportunities.” One important difference is that unlike western ‘development aid’, Chinese bilateral loans are focused on ‘development finance’. The terms are reflective of a high risk financial environment where trust is built through Africa’s resource backed loans and China’s technological capacity to spearhead infrastructure led development. The benefits, however, are that China gains the opportunity to access new markets, secure critical supply chains and build political alliances on the world stage while Africa earns largely unrestricted development finance to pursue development goals therefore avoiding the conditionalities that come with western assistance. While these are arguably positive achievements, they certainly are not radical, that is to say, they don’t fully address the structural deficits described above. For those concerned with the long run, this raises critical questions about the trajectory of the type of capitalist development in Africa, its prospects and the future role of China in the process.
When Marx wrote Capital, he justified his focus on England on the grounds of data accessibility and the fact that the advanced capitalist economies provided a mirror that could reflect to developing nations their own futures. Therefore, to understand the dynamics of capitalism, one need only understand the economic system of the most advanced capitalist economies. For many years, that vision has been shared by heterodox and orthodox economists alike. However, the rise of China as a major economic power with a distinct brand of capitalist development, challenges the hegemony of the US model of capitalism. Though not distinct from the capitalist system as a whole, China’s model of development adheres to the logic of cheapening as introduced in Patel and Moore’s History of Seven Cheap Things. As the authors of this book argue, for the capitalist process to sustain itself it needs to continuously extract profit while maintaining social balance. In fact, Adam Smith’s famous invisible hand was meant to formalize an internally chaotic system that was in his view, simultaneously socially harmonious. In this model, ideas like perfect competition and the free market are handmaidens to the natural price – the cheap price. On that note, the cheapness of energy, labor, land and food are essentially indicators of rapid substantive development. At the same time, cheapness can justify violent accumulative tendencies ranging from colonial/neocolonial theft, slaughter and fraud. Crises of production demand the periodic establishment of frontiers in the form of natural discoveries and technological advancements which become victim to these accumulative tendencies to maintain low prices. China is a good example of this structure of economic behavior, however with a stronger focus on soft power and cooperation rather than the military and diplomatic sabotage of its western counterparts. Africa remains critical to the cheapening efforts that drive price formation and the fact that Africa provides a market for cheap Chinese manufactured goods as well as a method to secure global supply chains at a relatively cheap cost is simply an indication of its frontier status in global capitalism.
In short, even Chinese capitalism governed by a logic of cheapening can have huge consequences. Occasionally straining beyond its limitations, falling into crises and recovering by virtue of the exploitation of frontiers are only some of the systematic barriers to overcome. More importantly, these crises that may emerge from the cheapening process or its disruption, include various social issues such as: alienation, unemployment as well as negative pressures on planetary boundaries. The after-effects may emerge in the chaotic structure of social formations including xenophobia, populism, and war. Nevertheless, they are not mistakes afflicting capitalist development, but rather inherent to the process of capitalist development.
Rather than falling prey to reductive narratives where China is the crown prince of colonialism, inheriting the mantle from the West – the reformed colonial abuser- a more nuanced analysis requires that we disentangle what mainstream narratives have struggled to frame as”The Chinese Problem” from the systemic problems of capitalism. Rather than a rejection of the gains of development in Africa, this article has argued for a different method of evaluating development that is through history and economic systems. Such an analysis is necessary if we as Africans are to avoid the calamities of the advanced economies in our laborious road to sustained development. As the wheels begin to churn in the capitalist machinery, we must identify crises expressed as disturbances in the capital order and social disharmony as integral to the capitalist mode of production of which there would be no ‘capitalist development’ without. Furthermore, we must ensure that the administrative capacities of the state are prepared to mitigate some of these crises. On that note, one might claim that the role of China in Africa has been to prove that successful alternative modes of development exist which, without any judgment, have little to do with adopting western values. Instead with a pluralistic view of economic growth Africa gains more agency in determining her future than it has had before.
Michael Kpade is a senior at The New School University. His interests include economics, philosophy and ecology.
Featured Photograph: Container – MSC China (22 December 2006).
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