‘Africa should partner with China to develop production facilities'

As the Chinese continue to expand their African activities, there is vast opportunity for Africa to develop production facilities locally – but rather than try to go it alone, they should do so in conjunction with their Chinese partnerships. That’s the view of Hannah Edinger, a research and strategy specialist with Frontier Advisor, who believes that as China matures and its interest in Africa’s resources grows there will be major opportunities to have offshore production hubs for the Chinese on the continent. Most experts agree that true development only comes when you can measure the true extent of manufacturing and service delivery in the economy rather than just looking at resource extraction. But, said Edinger, it was time that African countries started thinking out of the box to find ways of benefiting for far longer than what the current situation will allow. Peter Draper, director of Tutwa Consulting, agrees saying there is less optimism now around China’s growth than several years ago. “There is a shift taking place in China where they are moving away from exportled industrialisation to a greater focus on domestic consumption. That means the cost structure in China is rising and low wage, labour-intensive factories are moving offshore to Bangladesh, Sri Lanka and Vietnam. The question arises why not also to sub-Saharan Africa? Why can we not look at developing these hubs for the Chinese right here? We should be encouraging this as it offers major opportunities.” Both Edinger and Draper agree that the East African countries are leading the way when it comes to extracting as much benefit as possible from their Chinese contracts. “If one looks at the EAC one can see how they are far ahead of SADC and Comesa in terms of policy and implementation when it comes to working together as a region and finding beneficiation. They are extremely proactive in terms of infrastructural development.” According to Edinger, the countries in this region are committed to working together to create an enabling environment to attract investors. “If one looks at countries such as Zambia and Ethiopia, even Nigeria in the West, they are negotiating – with the help of China – economic zones in their countries where production facilities can be erected.” Ultimately, she said, it made sense for the Chinese as well to extract resources locally, manufacture them here and then sell the final product on the continent rather than moving it back and forth to the East. CAPTION Hannah Edinger ... ‘China moving away from export-led industrialisation.’