China's role, presence and sometimes complicated positioning in Africa has been well documented over the years, with the rest of the world watching carefully what the global giant does in a continent often forgotten by the West unless it involves sending aid. For the last 15 years Chinese nationals have established themselves throughout the continent with a clear business focus. Today, there are an estimated 1 million Chinese nationals doing business, mainly in the sectors of construction and import and export of goods.
Less talked about is the growing vision that more needs to be done to ensure a robust and coherent strategy for partnerships in the agricultural sector, which has become an important sector for both regions.
According to the United Nations Food and Agricultural Organization, by 2050 food production will have to increase by 70 percent to feed the globe's larger, more urbanized, and increasingly affluent population.
China's growing domestic consumption needs to be satisfied. Africa's agricultural sector needs technology and investment. Both sides could win from a more focused approach to agricultural growth, which in turn could reshape the world's agriculture.
A 2011 in-depth report by Standard Bank, Africa's largest bank, titled "China's Food Security Challenge: What Role for Africa?" suggests, "Africa will in the next decade increasingly play an important role in China's long-term food security agenda as demand for food in the world's most populous nation threatens to outstrip its supply." It is expected that China's total food consumption expenditure will double to over $1 trillion by 2015.
Currently, the majority of Chinese agricultural imports originate from Asia and the Americas, relegating Africa to the sidelines. For instance, in 2010, the Americas accounted for virtually 99 percent of all soybean exports to China. Agriculture has been on the back banner in terms of partnership. Between 2006 and 2008, agricultural products were only 3 percent of China's imports. In comparison, in other sectors, China and Africa have managed to establish real tangible partnerships: such as Angola being China's largest trading partner and South Africa being the second largest. Agricultural products constitute less than 1 percent of its exports to China.
Nonetheless, there is some good news: imports of cotton have expanded from just $8 million in 2001 to $462 million in 2010, and oil seeds from $146,000 to $420 million over the same period. The situation is changing in the last few years: the first nine months of 2010 saw $64.3 million of exports to China, more than double compared to 2009.
The reality back in China, with consumption growing and living standards rising throughout the country, forces long-term strategies to be assessed and established. From China's point of view, Africa is a natural option with its vast farmlands and willing governments in need of business partners and know-how.
According to the Standard Bank report, China will align aid and outward investment in agriculture to access new opportunities. Here, Africa's role is pronounced. While cooperation remains developmental, signs of commercialism and strategic intent are clear. In general, state-owned farming groups carry out Beijing's agricultural investments in Africa. As of 2009, China had carried out over 200 agricultural projects in Africa. Increasingly, these projects are run on a for-profit basis.
However, from Africa's point of view, it must carefully manage this potential agricultural investment. Africa must focus on ensuring its own food security. Producing food for export is a sound business decision, but making sure that one's own population can access reasonably priced foods is essential as is the reduction of food imports.
Nonetheless, according to Pascal Lamy, Director General of the World Trade Organization, one needs to look at Brazil to see that African agriculture can be turned around. Just 30 years ago, Brazil was a net importer of basic foodstuffs. Today, thanks to sound policies and enhanced investment in research and development, Brazil is among the world's top exporters of wheat, corn, chicken, beef and sugar.
The next few years will determine how essential Africa is to China's growing demand for food; sound business partnerships and investment in this African sector will be China's way forward. The next few years will also be an opportunity for Africa's leaders to ensure that its agricultural potential and know-how is developed for both its internal demand and as an important source of revenue in terms of exports.
The writer is Communications Manager of EMRC – an internationally renowned organization providing a platform for Africa's private and public sector to come together - www.emrc.be |