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China’s Opportunity For African Agribusiness

“China’s engagement with African agriculture represents perhaps Africa’s biggest opportunity in history. China’s partnership with Africa has evolved from the donation-aid model of assistance to a more sustainable donor investment engagement.”

All across the African continent the effects of Chinese interests can be seen. Some journalist even jokingly refer to Africa as China’s second continent. In the last few years that seems to have become more true. This is mostly due to the large amount of money China has to invest in it’s own territories and across the world.

Dealing with Chinese businessmen was not first choice for most Africans, the United States was the investment partner Africa would have rather had. However, western investors have failed to see the long term strategic opportunity Africa presents or have the equity to place in such a plan. China has experienced the same losses as other investors, except they have continued to partner with Africans in order to execute a much longer plan which could take decades to reach fruition.

sfsdhajfhasjfhasdlRight now, China’s main business in Africa is the extraction of valuable resources. They have invested nearly $10 billion in these operations so far and they will continue. What separates Chinese operations from other extractive institutions is their national interest in forming continueing partnerships, in industries like agribusiness. Additionally, they “pay back” African nations for their resources by building infrastructure such as roads, hospitals, and university campuses. So far China has been a very subsitive partner for Africa,

In order to learn more about how China’s involvement in Africa has affected African Agribusiness AAM met with scholar Donald Cassell. Cassell is a Senior Fellow at the Isoko Institute and directs the African portfolio of the Sagamore Institute, an Indianapolis based think tank. In recent years he has published on China’s Role in African Agriculture which analyzes the subject.

Cassell states, “China’s engagement with African agriculture represents perhaps Africa’s biggest opportunity in history. China’s partnership with Africa has evolved from the donation-aid model of assistance to a more sustainable donor investment engagement.” (Cassel 33) The Chinese, themselves being a rising world power, bring their own experience of rapid development and growth to the African continent. They are almost presenting their own development as a model for African nations to follow. A proven model to follow, since it has eradicated more poverty than any other in human history. The Chinese come from a very poor background, like Africans, and have built their economy from almost nothing very quickly. Additionally, China has successfully solved its major food security problems in the last thirty years.

==FILE== Seneglese and Chinese workers observe a ceremony at the national theater construction site financed by China on February 14, 2009 in Dakar, during a visit by Chinese president Hu Jintao and Senegalese president Abdoulaye Wade. AFP Photo / SEYLLOU_[24FEB2013 SUNDAY REVIEW BOOK REVIEW]

Seneglese and Chinese workers observe a ceremony at the national theater construction site financed by China on February 14, 2009 in Dakar, during a visit by Chinese president Hu Jintao and Senegalese president Abdoulaye Wade. AFP Photo

However, how Africa manages how it does business with the Chinese is critical to maximizing the opportunities and minimizing the risks. This is the type of investment and involvement Africa has sought from other world leaders, but is now only receiving from China. Africa must be very careful dealing with the shrewd Chinese businessmen. Being the only region in the world that has seen no appreciable agribusiness development, Africa is in desperate need to reverse this decline. It’s hard to turn away Chinese investments in that agribusiness climate.

Cassell explained that the nature of Chinese involvement in African agribusiness has been complex. However, overall China views Africa as a strategic development partner. China already has a significant presence in trade and national development. According to Cassell much of this has been done in the framework of the One China policy, cooperation based on respect for national sovereignty, national interest, non-intervention, and non-imposition of conditionalities. At the core of this business philosophy is mutuality, trust, partnership, and win-win cooperation. China realizes that its relationship with it’s allies in Africa were weak, so they are build relationships.

Ghana is a good example of this Chinese model of cooperation. China sends excess skilled and unskilled laborers to Ghana for employment opportunities. Also, in Tanzania China has developed some of its most advanced agriculture experiments.

China’s relationship with Africa is just the early stages of it’s going global strategy, really it’s still trial and error. As the Chinese enter Africa they will learn that to do business in Africa they cannot easily separate politics, religion, and culture. In order to create these types of partnerships, at least the business cultures will have to meld. We can see some of this happening especially as Chinese migrate to Africa and intermarriages begin to happen. Since this is a relatively new partnership, overtime more people will have interest as it develops.
But China also has interest in its own food security needs. The FAO has determined that food production will have to increase by 70% to meet the worlds growing urbanized affluent population. At the moment china is meeting its own food demands by diminishing its own arable land. It sees Africa as a vast agricultural opportunity. China says that its interest is in global food security, not just to grow food and export it to China. However, there is already a high demand for African agricultural commodities in China.

Changing people changes history. If people do not change, little else changes in the long run. The only real revolution is in the enlightenment of the mind and the improvement of character.

Flag_of_the_People's_Republic_of_China.svgChina has done more to alleviate poverty in Africa than anything ever attempted by western colonialism or the initiatives of traditional partners. The Chinese engagement may be even more meaningful if the Africans do business carefully. So far China has really taken the lead, if the Africans can become more participatory it could become an even more lucrative relationship. Especially, if this could be done in the development framework.

Why is China so interested in Africa? They see investing in the African people as having the possibility of infinite returns.

Sources:

Cassell, Donald L., Jr. “China’s Role in African Agriculture.” Marketplace: Liberia 2.1 (2013): 33-37.

“Chinese Involvement with African Agribusiness.” Personal interview. 05 May 2015.