This scramble for Africa, for good or bad?
Africa has always captivated the world’s imagination. Either as the birthplace of humankind or the continent consigned to the role of a laggard in world affairs. Despite its history of slavery and colonial domination, today’s reality shows Africa is the new frontier. A frontier with limitless opportunities for wealth creation.
Talk about its vast arable lands, natural resource reserves, underutilised human capital, and markets. In this relentless march of globalisation, the world is arguably noticing the value of the African continent more than ever. Today, foreign governments and businesses are rushing to strengthen diplomatic, strategic, and commercial ties with the motherland.
The new wave dubbed the “new scramble for Africa” brings back old memories of the Berlin Conference of 1884-85, but this one is slightly different. Aided by globalisation, supply chain management, access to natural resources, and geopolitical and economic development, world economic powers are now competing for influence in Africa. The question is, is this good or bad, and what benefit is it to Africans?
The state of development in Africa
Before free trade reforms and the democratisation of African countries, resource control was central to the structure of African economies, and it remained essentially unchanged in the post-colonial era. During this period, development aids trickled into the continent’s economy.
Yet, aid has failed as a sustainable strategy to develop Africa. A continent that has 42 percent of the world’s bauxite, 38 percent of its uranium, 42 percent of its gold, 73 percent of its platinum, 88 percent of its diamonds, and around 10 percent of its oil need something more tangible than contributed funds in the name of aid.
Carmody opined that the paradox of plenty defines Africa’s development. And indeed, isn’t it ironic that the same continent is economically poor and resource-rich? Perhaps the continent’s development trajectory took such turns because of the Berlin Conference.
This new scramble or renewed interest in Africa is different because we are in a new age where Africans are more enlightened, and development is ongoing. For instance, in 1981, Africa’s extreme poverty rate was 43.1 percent, almost equal to the average for the rest of the world rate of 42.8 percent.
Today, the extreme poverty rate in Africa is at 34 percent. As gloomy as that may seem, there is hope because poverty has reduced on the continent, and Africa’s democracies are growing stronger.
This explains why we are seeing countries like the United States, the United Kingdom, France, Japan, China, and even Russia deepen their relations and improve their contribution to Africa’s development.
From 2010 to 2016, over 320 embassies were opened in Africa, probably the biggest embassy-building boom anywhere. As of 2021, Tokyo had 35 embassies in Africa. This is one of the significant policies implemented by world economic powers to strengthen diplomatic and commercial ties within the 54 countries within the continent.
Although some think these strategies to strengthen ties are indirect means of influence. And as much as I understand the concept of neocolonialism, I believe the rising interest in Africa offers many opportunities if African leaders are intentional and visionary. We now live in an interconnected world, so we must leave no one behind. And since virtually all the other continents have opened up, it is imperative that Africa is open to the flow and processes of globalisation and join the rest of the world in modernity.
Africa beyond aid
World Bank data showed that development help and aid received by sub-Saharan Africa in 2020 was $66.84 billion. The development aid received by African countries has increased by 411.79 percent compared to what they gained in 2000. The US, European Union (EU) institutions, France, the UK, Canada, and Japan, were the biggest aid donors to African countries between 2012-2020.
Aid has been used to finance investment and technical assistance projects, budget support, institutional reform programmes, and debt relief. Aids impact development as it has spill-back effects on government institutions and governance. Aid could not drive growth on the continent. Instead, we have seen the role of an open market and free trade policies in bridging the gap.
As the last continent to fully develop, there are many opportunities for wealth creation and growth. In 2021, the Japan International Cooperation Agency (JICA) agreed to lend $551 million to the African Development Bank (AfDB) after the latter’s financial resources came under tremendous strain during the Covid-19 pandemic.
Recently, the Chinese provided economic relief to 17 African countries and waived debt on 23 interest-free loans. This is besides the 23 billion invested in infrastructure projects by the Chinese government in 35 African countries.
The US government has helped to close about 800 deals across 45 African countries in the last three years, estimated at $50 billion in exports and investments. Biden’s administration has already developed a strategy that supports the African Continental Free Trade Agreement (AfCFTA) and the future of the African Growth and Opportunity Act (AGOA). In fact, the Africa Leaders’ Summit is in the works to discuss the US’ four primary objectives in sub-Saharan Africa.
Also, the UK has the fourth-largest bilateral donor to Africa, provided $3.9 billion in 2019, and has trade deals with 16 African countries individually or through their regional economic communities.
The UK-Africa infrastructure partnership was announced at the maiden UK-Africa Investment Summit held earlier this year. The £80 million infrastructure partnership is between the UK’s Department for International Development (DFID) and Egypt, Ethiopia, Ghana, Kenya, Uganda, and the AfDB.
Russia is also not left out. The Afreximbank President, Benedict Oramah, stated that the trade between African countries and Russia had seen considerable progress. He said that Russian-African trade since 2015 has had an average annual growth rate of 15 percent.
Today, we have Russian exports to Africa worth $14 billion a year and imports of African products of about $5 billion. That means bilateral trade is about $20 billion,” he said. This is one reason for the scheduled 2022 Russia-Africa Summit to discuss the increase in trade and opportunities from the AfCFTA.
These world powers are following up on their interests and investments in Africa with annual talks, conferences, and summits to discuss how to strengthen relations and trade.
Is this really neo-colonialism?
Many scholars call it neo-colonialism, forgetting that globalisation has made the world interconnected. An impoverished Africa doesn’t do much for the global economy. Besides, Africa must have its rightful place in the global value chain, which is one way we can garner the support and investment needed to develop the continent.
Boris Johnson, former UK Prime Minister, said at the 2020 UK-Africa Investment Summit that Africa is the future. The world knows, and we know too. It’s now left to us to play our politics right, eliminate the barriers to development like illiteracy, insecurity, and corruption, and focus on developing the African continent.
The influx of advanced countries’ funds and interest in Africa may be based on self-interest. But, it is a win-win because of the potential gains of advanced technical know-how, development, investment in several sectors, and knowledge transfer that comes with the cooperation and trade relations within and outside the continent.
Simply put, this scramble has risks and opportunities that can be maximised. That said, the most defining factor is that African leaders can determine if this will be good or bad for Africans, as that will mainly depend on decisions they make on the people’s behalf.