Chinese Investment in Africa

Preparing the Port of Mombasa for a sustainable future
Port of Mombasa in Kenya

Introduction 

According to the World Bank, the world population is expected to hit 10 billion by 2050, with “1 in 4 of the world’s people” coming from sub-Saharan Africa alone, bringing up an interesting paradox: what is expected to be the world’s most populous region is also currently the poorest, struggling to support the 1.14 billion people who live in it right now. For governments to maintain(let alone improve) standards of living, massive investment in all areas of infrastructure must be made, and it is clear that Africa cannot do it alone.

While many investors are hesitant to do business in the continent due to the lethargic rate of progress and low project success rates, where some see problems others see opportunity. Pouring over 3 billion dollars in 2018 alone, China in particular has taken a keen interest in Sub-Saharan Africa’s future. As I will discuss below, this investment will have wide-reaching impacts across the globe.

China's Ties to Africa Are Damaging | Fortune

The Good

According to a report done by McKinsey, China is now Africa’s closest trading partner, with over ten thousand Chinese firms doing business in Africa. As shown by the diagram below, China dominates investment in Africa in almost every category, and places a particular interest in financing infrastructure, putting seven times as much money into the sector than the next closest nation.

Africa’s economic partners, including China, India, France, the United States, and Germany, based on goods trade, foreign direct investment, aid, and infrastructure financing

There are several reasons for this rising interest. For one, African firms for the most part have benefitted from this relationship thus far; Chinese firms bring in specialized knowledge in sectors such as railway technology and provide support during all aspects of product development, from route design to construction. Additionally, the investment also boosts local economies. For example, when building the railroad from Kenya’s capital in Nairobi to its port city of Mombasa, local workers were recruited to help with the project, injecting money across several economic levels. FILE - A man carries an infant as he walks along the platform in front an SGR train traveling to Mombasa from the Nairobi SGR Terminus, outside Nairobi, Kenya, October 22, 2019.

The Bad

However, not all investment has benefitted the continent. For example, by building the railroad mentioned above, Kenya accrued over $4 billion in debt to China, placing it in a precarious position for future diplomatic agreements and putting long-term economic stability in jeopardy. Additionally, according to a New York Times article, trains and roads are not the only things that China has been exporting to Africa. In addition to “traditional” infrastructure, China’s aggressive investment in wireless and mobile communications technology has led to the proliferation of its surveillance state across the globe. As of 2019, Zimbabwe and Kenya had bought rights to implement the same technology that China uses to monitor its own citizens at home, placing human liberties at risk.

4 thoughts on “Chinese Investment in Africa”

  1. Wow, this was really interesting! I wonder how the U.S. officials in foreign policy are reacting to China’s increasing interest in Africa. Are they quite concerned, or perhaps wanting to increase funds to begin American development in Africa? I will definitely do more research on the topic because it seems that in the next decades, there could be a lot more economic and foreign policy interest in Africa.

  2. I can definitely see the pros and cons of China’s involvement in Africa. Through the implementation of infrastructural pieces such as railroads and more, it will help out the economy and businesses, which is a great bonus. However, I also see the downsides that you mentioned. A nation having a huge amount of debt will mean that they might have some unintended financial problems in the future, and surveillance technology is also a scary aspect that has ethical problems as well. This article really helped to bring this to light for me.

  3. All these statistics are extremely interesting to look at and do paint a rather grim picture. Although the main reason the population is expected to grow as much as it is, is due to the lack of investment and development. It is inarguable that most sub-Saharan nations are developing and lack a lot of education we in the west view as basic. If investment were to occur both the problems f supporting it’s current population and future population would be fixed. The main culprit here is the lack f education for women in developing nations. Many statistics show that women’s education leads to a levelling out of birth rates as well as increased economic activity. The issues are multi faceted and more complex than that, but the main reason behind the insane population growth is the lack of investment.

  4. It seems clear to me why China is moving in this direction geopolitically. Africa is a continent which presents immense potential, especially when its countries are in your corner politically or owe you a massive debt. If China’s investment in African development proves successful, the continent will be under the regime’s thumb for years to come. This is a serious threat to the U.S. and our principles regarding civil liberties…definitely as issue that needs to be addressed by our leaders.

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