Question

1. What are the major changes in Africa, as it becomes a major emerging market? With brief historical evidence, discuss the role of China in African development.
2. Describe your understanding of the “New Scramble for Africa”. Discuss how the process of globalization affects Africa’s development. Why is Africa referred to as a ”hopeful continent”?

500words short answer

Answer 1

The major changes in Africa

1. Unemployment and underemployment

Unemployment in sub-Saharan Africa stands at around 6%, according to the International Labour Organization. But most of the work available is unskilled or low-skilled, in part because the region has the world’s lowest levels of access to higher education.

So, although many Africans are employed, 70% of sub-Saharan Africa’s workforce is vulnerable. The global average for vulnerable occupations is 46%

2. Underinvestment in infrastructure

Physical infrastructure across much of the continent is a challenge to productivity, according to the African Development Bank. It calculates an estimated $130- to $170 billion needs to be invested each year on Africa’s infrastructure, despite a financing gap of as much as $108 billion.

3. Fiscal crises

Nearly 40% of sub-Saharan African countries are at risk of slipping into a major debt crisis, according to the Brookings Institution. And the "number of African countries at high risk [of] or in debt distress has more than doubled from eight in 2013 to 18 in 2018."

The region’s aggregate debt-to-GDP ratio rose to 46% in 2017, up from from 23% in 2008. As debt levels increase, so does the pressure of servicing the debt; money that could be invested in society goes to repaying loans. This could make it less likely that the region can achieve the African Union’s Agenda 2063 development targets

4. Political change

"Failure of national governance" is a leading risk to business, according to executives in sub-Saharan Africa.

“Since the beginning of 2015, Africa has experienced more than 27 leadership changes, highlighting the continent-wide push for greater accountability and democracy," according to the Brooking Institution.

Sub-Saharan Africa’s two largest economies both recently held presidential elections.

In May, Cyril Ramaphosa was elected president of South Africa with a commitment to promote economic growth and fight corruption. At the start of the year, Muhammadu Buhari was re-elected president of Nigeria on a similar pledge to fight corruption, while strengthening national security and the economy.

"The political changes taking place offer an opportunity to address citizens’ concerns and priorities. However, leaders – and economies – will face considerable risk should policy agendas fail to deliver results," the Forum report cautions.

5. Climate change

Nine out of the ten countries in the world most vulnerable to climate change are in sub-Saharan Africa. The region has at least 10 vulnerable coastal cities with a population of more than 1 million people, including Accra, Dakar, Durban and Lagos, according to the Forum report.

The role of China in African development.

China’s emergence as a major player in Africa’s trade, investment, and aid has led many to question the nature of its involvement. Critics say that China is only interested in resources, its exports to Africa threaten local industries, and it is displacing Africa’s traditional partners, like the United States.

True, China is a large user of commodities and has a vital interest in developing Africa’s natural resources, but it is not just on a resource hunt. Moreover, the adverse impacts on Africa of China’s increased exports, both in internal and external markets, appear to be limited to specific industries such as garments. And despite their differences in priorities and approaches, China and the United States can complement each other in some areas. Africa has much to gain if it uses its leverage wisely.

The Rise of China in Africa

While the United States and European Union (EU) still remain Africa’s leading trade, investment, and aid partners, over the past decade China has emerged as an influential player in Africa. Starting from a low level, Africa’s goods exports to China increased more than 60-fold between 1998 and 2010, compared to a fivefold and threefold increase to the United States and EU, respectively. As a result, China’s share of Africa’s exports has increased from a mere 1 percent to about 15 percent in just one decade. Though the EU saw its share of Africa’s exports decline from nearly 36 percent to 23 percent, the U.S. share increased slightly.

China’s investments in Africa have also surged, reaching $5.5 billion in 2008, up from just $70 million in 2003. However, since 2005, China has on average accounted for only 5 percent of annual foreign direct investment (FDI) flows to the continent, considerably smaller than investment from the United States and EU, which together accounted for more than 30 percent of annual FDI flows to Africa, the rest includes intra-regional flows. But China’s total investment in Africa is likely higher than what the official figures suggest, as Chinese investment involves state-owned enterprises that use a range of financing instruments, such as export credits,

China has also become a major source of foreign aid to Africa, complementing its trade and investment activities. The volume of Chinese aid is undisclosed, but according to some estimates, its concessional loans to Africa have grown from a cumulative total of $800 million in 2005 to a commitment of $10 billion between 2009 and 2012. By contrast, the World Bank’s annual lending to Africa has averaged $4.5 billion a year since 2006

China’s rising low-cost manufacturing exports may well have contributed to lower manufacturing prices in third markets, eroding the competitiveness of Africa’s exports alongside those of many other low-wage developing countries.

But Chinese and African exports overlap in only a few industries such as clothing and textiles, which suggests limited competition in third markets. For example, the export similarity index, a measure of the extent to which exports overlap, is only 7.3 percent between Africa (excluding South Africa) and China (see figure). In addition, manufactures account for only 20 percent of Africa’s exports, as compared to China’s 95 percent, suggesting that China provides little competition to Africa’s exports.

New Scramble for Africa”

FOR CENTURIES, beginning with the slave trade, the West has ruthlessly exploited the African continent. As Karl Marx described it, “the turning of Africa into a commercial warren for the hunting of black skins” was one of the chief sources of “primitive accumulation” that “signaled the rosy dawn of the era of capitalist production.” But the abduction and enslavement of millions of Africans was only the start. In the late nineteenth century, in what became known as the “scramble for Africa,” the continent was arbitrarily carved up into colonies by the leading European powers, which violently subjected its people and plundered the continent of its rich natural resources. In the post-independence eras, African states became weak pawns in the world economy, subject to Cold War rivalries, their path to development largely blocked by their debilitating colonial past. More recently, the West has choked Africa with an onerous debt regime, forcing many nations to pay more in interest on debts to the World Bank and International Monetary Fund (IMF) than on health care, education, infrastructure, and other vital services combined.

The legacy of Western domination has left Africa devastated with crippling rates of poverty, hunger, and disease. The continent today has a gross national per-capita yearly income of $829—below that of the 1950s and 1960s in most African countries—and an average life expectancy of only fifty years. Sixty-two percent of Africans have no access to standard sanitation facilities, and two-thirds of the total world population suffering from HIV/AIDS (25.8 million people) live in Africa. It remains a continent abundant in human and natural resources, but these manage to enrich only a handful of African rulers and foreign capitalists

The process of globalization affects Africa’s development

In Africa, its position in the international system has been considerably weakened by the fact that it has beenlosing the race for economic development in general, and human development in particular, to other regions, thesepoor performances by African countries accounts in part for the political and social instability and rise ofauthoritarian regimes that have characterized much of postcolonial Africa, further weakening the ability ofAfrican countries to deal effectively with globalization. This does not in any way mean that globalization will bediscussed on the two sides: positive and negative impacts

Globalization as the process of intensification of economic, political, social and cultural relations across international boundaries aimed at the transcendental homogenization of political and socioeconomic theory across the globe, impacts significantly on African states through systematic restructuring of interactive phases among its nations, by breaking down barriers in the areas of culture, commerce, communication and several other fields of endeavor. These processes have impelled series of cumulative and conjectural crisis in the international division of labour and global distribution of economic and political power; thereby qualifying basic African feature to be poverty, diseases, squalor, and unemployment among other crisis of under development. This paper was aimed to examine both the negative and the positive impacts of globalization on African states, and suggest some recommendations among which are to improve democratization process, make the task of poverty eradication more indigenous, etc