Africa-China Cooperation; Who benefits?

Africa and the People’s Republic of China have had a very longstanding relationship since 2008 but can this bilateral relationship be described as a fair, quid pro quo one? It’s nature is mainly in the form of trade and speaking of trade we talk deficits, balance and surpluses. China’s trade investments in Africa reports marked-up increase in values but compared with trade relations with South America and European countries like Germany, we notice that Africa is not gaining much.

Bilateral trade figures between China and Africa amounts to $204 billion, which is quite exciting, but the downside is up to forty African countries are in trade deficits with China, including Cameroon in Central Africa and Kenya in East Africa. About 70% of the traded materials are Timber, minerals and oil. Most of these material come from about fifteen (15) African countries only. Kenya for instance, imports about $3.8billion worth of products from China and in turn exports only $167million worth of products, mainly Agricultural, back to China.

China’s Ministry of Commerce recently released the 2018 trade figures between Africa and China. Stats on China-Africa Trade,2018 .

Let us take the case of Cameroon and China. The Magazine Business in Cameroon reports that “Despite Stronger Wood Exports to China, the country remains a minor Supplier”. This must not come as a surprise a China’s overall trade balance shows that only 4% of China’s imports come from Africa.

Over the last year, Cameroonian sawn wood exports to China increased 33%, according to the market report recently issued by the International Tropical Timber Organization (ITTO)”

Business in Cameroon

So, what is the problem? Several pundits on this issue point out the aspect of tariffs. High tariffs and bureaucracy impede the export of products entering China from Africa, on the other hand, Products coming into Africa from China are almost tariff free and very little bureaucracy. This is a problem. African countries in trade with China do not manufacture at a competing level. This makes it very difficult for them to shift the trade balance in their favour.

Africa’s Cocoa sector is beginning to pick steam accept-price-dictated-by-ghana-ivory-coast/ but it is worth noting that of the $100billion that the chocolate industry is worth, Africa gets only 5% but remains the top supplier of Cocoa beans at 75% globally.

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