NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, July 8, 2005

While rich-country leaders look to heal Africa with generosity, China and India are helping to pull Africa out of poverty with good, old-fashioned greed.

As leaders of wealthy countries pat themselves on the back for debt relief and development assistance to Africa, China and India are doing their part to help develop Africa?s economies. The two Asian giants are pouring funds into the continent to find energy for their superheated economies and markets for their products.

Chinese companies are snapping up African oil and gas fields, investing in telecom companies, and funding programs to boost farm output. The value of China?s trade with Africa has jumped from $10 billion in 2000 to nearly $30 billion in 2004. India arrived late but is starting to see gains as well. It is a driving force behind the new African Institutes for Science and Technology, which aim to replicate India?s technology-led economic growth. In 2004, India extended $500 million in credit to eight West African countries to promote the purchase of Indian information technology. India?s state-owned oil firm has invested heavily in Sudan and is exploring options in West Africa. ?China is making greater inroads,? says Peter Draper of the South African Institute of International Affairs, ?but with its historical connections, India will catch up.?

Why all the interest in the forgotten continent? A goodie bag of exploitable markets and exploitable resources. China has flooded Africa with cheap textiles, rice, and electronics. India has cornered the market in generic pharmaceuticals used to treat HIV and offers the hardware and software needed to get Africa on the information superhighway. Africa, in turn, is feeding the insatiable Asian thirst for energy: Both India and China have negotiated oil, gas, timber, and coal contracts worth billions of dollars.
Story found here.