The unseen hand of China in Africa’s largest economy

The unseen hand of China in Africa’s largest economy

Sometimes a throwaway sentence is more illuminating than it ought to be. A line in an article in Roads & Kingdoms in January about the Chinese in Lagos did just that. Near the end of the piece, the author wrote: On my final night in Lagos, Fang invites me to the Huawei offices for dinner, handing me a guest pass and taking me through a winding corridor that opens out into a futuristic canteen. Staff can pay for their meal through Wechat, the Chinese social media app. Being fairly acquainted with Nigeria’s tech scene and mobile money regulatory environment the last sentence jumped out at me—paying for things with WeChat is not something that is currently available to Nigerians as an option. I asked a couple of my friends in the Lagos tech scene how the Chinese were able to do this in Lagos and they simply shrugged and said “they are running their own little country here.”

The Chinese and their Nigerian hosts continue to live side by side but far apart—the gap between them inevitably filled by mutual suspicion.It is not hard to come by data showing the scale of China’s investments and influence in Africa — the China Africa Research Initiative at the Johns Hopkins University estimates that, from 2000 to 2015, the Chinese government, banks and contractors extended $94.4 billion worth of loans to African governments and state-owned enterprises. From a few million dollars in 2000, the amount of loans topped $16 billion in 2013 alone. Whether or not these loans are value for money or just a flow of money from the Chinese government to Chinese companies via Africa remains a matter of debate. A $600 million Chinese loan to fund the installation of CCTV cameras across the Nigerian capital Abuja has since been mired in corruption and scandal . It is hardly an isolated story.

But there is another part of the Chinese story in Africa that is rarely documented. That of the ordinary businesses who head to Africa, often without state backing, seeking to make a fortune. These businesses have mostly been careful to remain outside the spotlight and rarely ever speak to local media. A surprising McKinsey report from June 2017, based on extensive fieldwork, estimated that there were more than 10,000 Chinese owned firms operating across Africa, nearly four times what the numbers from the Chinese Ministry of Commerce (MOFCOM) showed.

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