Why Asian giants have eyes on resource rich East Africa

Saturday July 28 2018

Chinese President Xi Jinping and Rwanda’s Paul Kagame

Chinese President Xi Jinping and Rwanda’s Paul Kagame in State House, Kigali. PHOTO | XINHUA 

By The EastAfrican
More by this Author

Last week's visits of Chinese President Xi Jinping and India’s Prime Minister Narendra Modi to Rwanda and Uganda signalled the Asian giants' growing interest in East Africa.

In Rwanda, President Xi signed 15 bilateral agreements and concessional loans, as he reiterated China’s endeavour to have a “mutual understanding” with Africa on equal terms. Under the agreements, China will fund projects in road construction, hospital renovation and development of the Bugesera International Airport.

The Indian PM Modi, known for his penchant for offering gifts while on foreign visits, donated 200 cows towards Rwanda’s One Cow per Family poverty eradication initiative, on top of a $200 million loan from India’s Exim Bank for the development of industrial parks, irrigation schemes and expansion of the Kigali Special Economic Zone, with the message that India and Africa are looking to work together towards development.

International relations experts say the expansive trade and cultural diplomacy witnessed during the visits are among the core motivations that drive the Asian giants to the region.

“Asia is gaining in terms of its presence in Africa and in the East African region. Bilateral relations between Rwanda and India or China will ensure that they secure market for Asian exports that are produced in bulk, such as leather, agriculture and pharmaceuticals products, Dr Eric Ndushabandi, a political scientist at the Institute of Research and Dialogue for Peace, said.

“Asia’s presence is very significant for the image and cultural diplomacy for countries like India and China, especially back at home where the population will consider it a positive step when their leaders secure strong friendships and new trade destinations.”

Mr Ndushabandi said that Asia is less concerned with political influence, making China and India to appear more sincere trade partners with Africa than Europe and North America, which are usually criticised for imposing unfair terms of engagements.

“Asian giants like India and China don’t express much interest in political influence. They are more interested in cultural diplomacy than political influence,” he said.

Both India and China see East Africa as a potential partner for exports in this scramble for markets by economic powers in Europe, America and Asia.

Rwanda, and EAC also look at this interest from Asia as an opportunity to join Kenya, Angola, South Africa, Sudan and DR Congo as important actors in trade relations between Asia and Africa.

Point of reference

In order to boost ties, India intends to open 18 new embassies across Africa, adding to the 29 diplomatic missions it has on the continent.

This will be slightly more than the 43 embassies China currently has across Africa.

Another important note, experts say, is that President Paul Kagame has successfully revamped the African Union chairmanship – a position that was previously considered ceremonial – hence making him a go-to person for leaders across the world that intend to promote ties with the continent.

Experts say that Mr Kagame’s strong leadership at the AU is now a point of reference, ensuring that world leaders pay tribute to Kigali while on tour in Africa.

Since 2016, China has unsuccessfully sought a free trade pact with the EAC, as the region, led by Kenya, opposed the pact in favour of promoting local industries against an influx of Chinese imports.

In a bid to push for this pact, China last year appointed its first representative to the EAC, a position currently held by its ambassador to Tanzania, Wang Ke.

India exports mainly petroleum and medicine to the region while China exports manufactured goods like clothes and footwear and telecommunications equipment, according to the 2017 EAC Competitiveness Report.

The report shows that China, India Japan and South Africa consume a larger market share for iron and steel products exported to EAC.

While in Kigali, President Xi emphasised China’s position that ‘‘all countries are equal’’ and pointed out that his country wants to pursue more friendly relations with African countries, as opposed to a ‘‘patronising approach".

"We want to enhance co-operation and co-ordination on global important agendas and uphold common interests of developing countries. We want to make international order and international relations more equitable and just,” President Xi said, adding that China appreciates the process of reforming the African Union, led by President Kagame.

On Africa-China relations, Mr Xi said that over the last decades, China has been pursuing a more friendly and sincere approach to co-operation with Africa.

Observers say Xi’s approach and commitment to pump at least $60 billion into development in Africa could alter the global power play.