China in Sub-Saharan Africa

OPINION

China in Sub-Saharan Africa: Regional Integration Key to  Robust partnership

By Baguma Kajura

The recently concluded Sino-African summit in Beijing re affirmed the reality that further ventures will be pursued on African soil by the People's Republic of China; not mentioning the nascent economic, financial and diplomatic ties between African states and China that have over the years positioned the East Asian giant as a client and competitor with the World Bank and the Asian Development Bank.

While China has pledged to moot $60 million into infrastructure projects in Africa, there needs to be a more frequent and comprehensive dialogue and negotiation generated between both actors.

Chinese investments on the continent have hitherto been tailored towards the oil and energy sectors where Chinese multinationals have consolidated their presence in resource endowed regions of Africa; with Chinese National Offshore Oil Corporation's (CNOOC) receiving substantial support from the Chinese government in overseas acquisitions of energy stakes in resource endowed regions in Nigeria, Angola, Guinea Bissau and Uganda.

China has been increasingly keen on development financing provided by Chinese development finance institutions, such as China Development Bank and Exim Bank, to support Chinese companies' equity investment in Africa.

These strategic acquisitions could predictably be attributed to a 2016 report by the CNPC Research Institute of Economics and Technology that revealed that China's foreign oil dependency could steadily rise from 67 per cent to 70 percent in the subsequent years. 

Despite rapid urbanization and heavy industrialization continue to spur robust Chinese demand for coal, oil, and natural gas, China's development financing has also steadily supported large-scale investments in infrastructure across Sub-Saharan Africa, particularly Uganda's hydro power projects and transport networks - with the government prioritizing infrastructure development in its bilateral ties with China.

The rise of Chinese private investment in Africa is a relevant phenomenon but that will be subject to whether China-Africa deals pave way for robust industrialization or maintaining the latter as a consistent hub for raw materials of its burgeoning economy and most importantly streamlining labor relations and working conditions that have persistently plagued the competence of Chinese firms and enterprises operating in Sub-Saharan Africa states like Uganda- where regional integration and the labor question will be integral to the positive gains from the special relationship with China.

Policy makers and scholars concur with the notion that for our government to benefit from the special relationship with China, regional economic cooperation with trading blocs will be critical to reducing the country's dependence on Industrialized nations for a greater part of their imports and services.

Regional trading blocs like EAC and COMESA could prove to be the key to achieving sustained development and increasing their participation in the global economy whilst checking China's purported hegemony.  Regional integration through customs and monetary unions, free trade areas as well as common regulatory and legal frameworks create a favorable bargain for trade deals with a trading partner with a comparative advantage.

Despite possessing a common market for labor, capital and goods, the EAC members (Kenya, Burundi, Rwanda, Tanzania and Uganda) lack a monetary union and a harmonized regulatory and legal framework that could in future destabilize long term investment with China. A common monetary union and a common regulatory framework across the five member states will boost the competitiveness of sectors in which China's economic rebalancing may create a comparative advantage for them.

Labor has hitherto been an extremely contentious issue in African states where Chinese firms have a presence.  It is perceived that Chinese workers  are well trained and considered skilled as opposed to their  local counterparts.  

In countries  like Botswana and Kenya , Chinese employees have received subsidized  transport , paid annual leave , educational bursaries and paid maternity leave  as opposed to the African laborers who have been denied such benefits. In some instances , they were granted leave but not remunerated with several such cases reported in small and Medium Chinese run firms in Uganda.

With weak trade unions in Uganda, it is incumbent upon the government to  revise the  labor question that Chinese firms with inadvertently neglect given the  vacuum of worker's and trade unions in China.

The writer is a socio-critic