This is the ninth in a weekly series of posts exploring themes raised in Dambisa Moyo’s book Dead Aid. Chapter 8 of the book, which is about trade, refers specifically about the possibilities of growth that trade with China offers to African countries. Because the Chinese economy is growing rapidly compared with other countries, its appetite for goods is increasing. African trade with China has been growing rapidly, and China is now Africa’s third biggest trading partner, after the US and France.
The majority of Africa’s exports to China have been oil and minerals, but there is significant potential for Africa to become a major supplier of agricultural products such as cotton, meats and grains. However, this would require significant and painful cultural change for many Africans, because in many African cultures people have a close connection with their own plot of land. Small-scale farming results in very low land productivity, keeping people poor and leading to famines during times of drought. The same amount of land could be many times more productive using modern large-scale farming techniques.
Africa’s infrastructure including roads, railways, electricity and telecommunications is generally in a parlous state, and very significant upgrades would be necessary in order for transport costs to become competitive on a global scale. Because of the reciprocal nature of trade, opening up trade with China may result in African markets being flooded with cheap Chinese goods, driving local manufacturers out of business. However, cheap goods are less damaging to local manufacturers than the free goods which are provided by foreign aid.