By Jackson Okoth
African trade with China is growing, but its imports and exports with other major global markets are either flat, or on the decline, according to a new report from the African Development Bank (AfDB).
The Africa-China trade represents more than 10 per cent of the continent’s trade. In value terms, it represents $114 billion — $52 billion in exports and $62 billion in imports.
Africa has a trade deficit with China of about $10 billion, according to AfDB’s report, Chinese Trade and Investment Activities in Africa.
Approximately 70 per cent of African exports to China consist of crude oil. READ MOREHouse helps, farm workers set for higher pay under new laws Nganya culture still ruling roads with impunity as public calls for stern action Silent trail: Every click, swipe or scan creates a map of your habits |
In contrast, China’s share of African exports continues to grow, outpacing other Asian countries.
In addition, China is aggressively investing in Africa’s infrastructure. Chinese investments have increased by an average of 46 per cent annually over the last decade. Most of these monies have been used to develop water, transport, electricity, and information and communication technologies.
Analysts say that the reasons for the increase stem from China’s global economic strategy, shaped by its political objectives, and its demand for energy, minerals and other resources.
In the last decade, the African exports to China almost doubled, from almost 5 per cent in 2000, to 10 percent in 2007. This increase has been the most significant increase among the major trade blocs that Africa trades with, namely Europe, Asia (excluding China), the United States and Japan.
Some 70 per cent of Chinese imports originate from four African countries: Angola (34 per cent), South Africa (20 per cent), Sudan (11 per cent), and Republic of Congo (8 per cent).
The high concentration of China-Africa trade manifests itself not just by country, but also by sector.
Approximately 70 per cent of African exports to China consist of crude oil, which originate from Angola and Sudan, and 15 per cent consist of raw materials. Agricultural products from other African countries have only a modest share.
boon for Africa exporters
"The strong demand from China has been a boon for Africa’s exporters. But it also led to a further concentration in the export basket of countries on the continent and, hence, exposes them to volatility in world commodity markets," says Dr. LÈonce Ndikumana, the Director of Research at the AfDB. Chinese exports are destined for relatively few countries. Some 60 per cent goes to six countries, namely South Africa (21 per cent), Egypt (12 per cent), Nigeria (10 per cent), Algeria (seven per cent), Morocco (six per cent), and Benin (five per cent).
Of China exports to Africa, machinery and transport equipment account for 38 per cent of the volume, manufactured goods 30 per cent, and handicrafts 22 per cent. Chemicals and food products account for less than 10 per cent of the total.
Machinery and transport equipment imports are linked to the strong presence of Chinese firms in the infrastructure sector, specifically telecommunications, and construction of roads and public buildings.
"In general, Chinese export products are well suited to African demand," explains Dr. Mthuli Ncube, AfDB’s Chief Economist.
