AFRICA’S NEW DILEMMA

China has made much inroads into Africa, investing heavily whether in mining or in the construction of much-needed infrastructure. However, such investments have also sparked criticisms and some would argue that they benefit China more than the host countries. Below are two articles which shed some light into this paradox that Africa is facing.

            The first article reports on how Chinese companies are generally well-received, having done what their Western competitors often failed to achieve for decades. In this case, they developed oil fields in Niger and brought hope of a windfall. But the second article shows, in Zambia, the reception is less welcoming. Last year, Michael Sata won Zambia’s presidential election by riding on anti-Chinese rhetoric which resonated with many Zambians.

Africa’s New Oil Exporting Nation

By Yahouza Sadissou

            Niger’s government has been looking for black gold ever since this West African country became independent in 1960. Companies from Europe and the US were granted prospecting rights, but until recently not a drop of oil was pumped from the ground. The turning point came after a lengthy search by the China National Petroleum Company (CNPC). The new oil fields are in the east of the country, close to the border with Chad, near Agadem, a Saharan oasis. In January 2012, Niger joined the illustrious circle of Africa’s oil-exporting nations, albeit as a junior member. Production runs to only 20,000 barrels a day, which is just a fraction of the output of neighbouring Nigeria, the continent’s biggest oil producer.

            Currently 13,000 barrels are exported, the rest serves the needs of Niger’s 15 million people. Although the volumes are modest, the Agadem oil fields inspire wild hopes among many Nigeriens. Official forecasts are exuberant as well, stating that oil revenues might jump-start the country’s economy.

Disappointment at first

            Before the first local oil reached the markets, new petrol stations were mushrooming in the country’s urban areas. Private operators were buying petrol in neighbouring Nigeria and hoped to see their businesses flourish once they would purchase supplies from Soraz, a refinery that processes Nigerien crude oil in Zinder, Niger’s second largest city.

Those dreams burst when Niger’s government announced fixed fuel prices. The litre retail pump price dictated by the Ministry for Energy and Petroleum is equivalent to € 0.88, compared with € 1.03 prior to marketing by Soraz. The announcement triggered storms of protest nationwide; people found the price far too high in comparison with cheap petrol smuggled from Nigeria. According to estimates, half of Niger’s cars run on illegal fuel. The border between the two countries is 1,500 kilometres long. Before Nigeria’s government cut fuel subsidies in January, petrol was sold for less than € 0.40 a litre at Nigerien black markets.

            Foumakoye Gado, Niger’s minister for petroleum and energy, justified the high prices for Soraz petrol by pointing to the refinery’s investment costs of $ 200 million. Moreover, he cited other factors as driving the petrol price, including transport costs and a hefty value added tax.

Dogged insistence on subsidies

            Such explanations cut no ice with his furious people. By the end of 2011, every section of society was in uproar. In Zinder, people took to the streets, and two people were even killed during rallies. Just as Niger started to market its oil, however, the Nigerian government announced it would end petroleum subsidies.

            That decision cost Nigeria’s President Goodluck Jonathan a good deal of support in his nation. However, it helped the governments of neighbouring countries, including Niger, in their long, but to date mostly fruitless struggle to stop petrol smuggling from Nigeria. According to SONIDEP (the Société des Produits Pétroliers du Niger), such smuggling reduced government revenue in Niger by around € 15 million last year.

            In Niger, the end of subsidies in the neighbouring country caused fuel prices to double and even treble in some places. The black market instantly dried up; despite the earlier harsh criticism of fuel prices, queues of motorists suddenly formed at service stations. The protests subsided, so the government in Niamey, Niger’s capital, certainly benefited from policy change in Nigeria. But it is now worried about what Nigeria will do next. To stem protests in his country, President Jonathan announced in January that a partial fuel subsidy will be re-introduced.

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“More money in your pockets”

By Anthony Mulowa

            On the first day after his inauguration as Zambia’s new president, Michael Sata held a meeting with Zhou Yuxiao, China’s ambassador to his country. Sata told the diplomat that Chinese investors must adhere to Zambian labour law and pay the minimum wage. He said that, eventhough Zambia and China were close allies, there had been misunderstandings in the past. “We welcome your investments,” the president said in a conciliatory way, but insisted that there must be “two way traffic”. The host country and its people, his argument went, must benefit from foreign investment.

            In his response, Zhou promised to cooperate on enforcing Zambian regulations: “It is my job to make sure that Chinese companies follow the law.” The meeting had great symbolic relevance. Both men know that they must cooperate, though that may be difficult on some points.

            In the election campaign, Sata was very critical of China’s influence in Zambia. He consistently accused Chinese businesses of treating Zambian workers poorly. Initially, he threatened to “kick out” Chinese investors, but later toned down his rhetoric. His party, the Patriotic Front (PF), also blamed the Chinese of funding the Movement for Multi-Party Democracy (MMD), the party of Rupiah Banda, the incumbent president who lost the elections in September.

            There can be no doubt that Chinese expats in Zambia would have been more comfortable with a re-election of Banda. The same is true of the Chinese government. It is also obvious, moreover, that the MMD spent heavily to woo voters. It was handing out T-shirts, bicycles and money. The PF instructed its supporters to take whatever they were offered, but not to vote for a party that was wasting money that really belonged to the people. This was the fourth time Sata ran for president. Three years ago, Banda had narrowly defeated him.

            In his inaugural address, Sata promised “an era of real transformation”. Reforms are to speed up development and improve the lot of Zambia’s people. One of Sata’s pledges is to ensure that all Zam­bians get three full meals every day. Another is to initiate positive change in his first 90 days in office. A review of the minimum wage is high on the agenda; so far, it only amounts to the equivalent of $91 per month. A very popular campaign slogan was: “More money in your pockets.”

            In Lusaka’s business district, some employees of Chinese investors have already had pay rises. Joseph Chanda who works in a Chinese-owned shop, for instance, told journalists that he was not paid the minimum wage before Sata’s election triumph, but that his wage has since more than ­tripled to the equivalent of $ 204 per month.

            Sata’s anti-Chinese election rhetoric resonated with many Zambians. Many people feel that China is benefiting from Zambian resources, whereas Zambians are not. The general sentiment is that the mines did more for the people when they were still run by the government.

            The new government is set to put pressure on the mines to ensure that Zambians benefit from the natural resources. It is reviewing taxes and wants a fair share of mining revenues to be used for developmental programmes such as the construction of schools, roads and hospitals. It will certainly take a lot more than populist rhetoric to deliver on the promises made in the campaign.

            The stance taken towards the Chinese, however, may yet spread to other African countries. The complaint is common that Africa has become a dumping ground for poor quality goods from China and that most services offered by Chinese investors are also of poor quality. At the same time, it is clear that China has become an important economic power Africa needs to do business with. If Sata manages to make China’s presence in Zambia more valuable to Zambians, the entire continent will take note. – Third World Network Features.

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About the writer:  Anthony Mulowa is a chief reporter with The Times of Zambia and president of the Zambia Union of Journalists (ZUJ).

The above article is reproduced from D + C, Volume 52, No. 11, November 2011.

When reproducing this feature, please credit Third World Network Features and (if applicable) the cooperating magazine or agency involved in the article, and give the byline. Please send us cuttings. And if reproduced on the internet, please send the web link where the article appears to twnet@po.jaring.my.

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