A new report by the German Institute of Global and Area Studies (GIGA) attempts to determine the social impacts of Chinese mining operations in Africa. The study, which found both positives and negatives, once again highlights the need for African nation states to benefit more from their own natural resources. Heidi Vella, speaking to the report co-author and other industry experts, investigates the challenges.
Around half of China’s total out-bound investments from 2005 to 2016 went into the energy and mining sectors of foreign countries. Sub-Saharan countries, such as Zambia, Zimbabwe, South Africa and the Democratic Republic of Congo (DRC), attracted approximately one-third of these funds.
However, China has been earning a bad reputation for its operations in Africa’s extractive industries.
Some of the accusations include illegal mining in Ghana, corruption in Angola, Guinea and other countries, environmental degradation in Chad, and poor working conditions overall.
Furthermore, the number of Chinese migrants, many of whom arrive as employees from state-owned extractive firms, displacing local people from jobs, has grown significantly over the last decade. As such, reports of anti-Chinese sentiments on the continent is growing.
To find out more about the impact China has on African nation states, the German Institute of Global and Area Studies (GIGA) decided to investigate.
Its report titled ‘At Africa’s Expense? Disaggregating the Social Impact of Chinese Mining Operations’ analyses the period between 1997 and 2014. It studies novel data on the control rights regimes of diamond, gold and copper mines and geo-referenced information from Afrobarometer surveys, a pan-African series of national public attitude surveys on democracy, governance and society in Sub-Saharan African countries.
China’s impact on Africa
The report concludes that the effect of Chinese mining companies on African local development is ambiguous: while proximity to Chinese operated mines is associated with anti-Chinese sentiments and unemployment, populations living close to Chinse mining areas enjoy better infrastructure, such as paved roads or piped water.
Although the report stresses that this is an initial investigation and more research is required, it adds that its findings ‘partly substantiate the conflict-enhancing effect of Chinese mine operators at the local level’.
China’s growing stake in Africa, particularly its resource sector, continues to be much debated with some comparing it with ‘colonisation’ while others are claiming that China’s investments in Africa have spurred growth.
China has poured money into Africa
In 2015, China’s president Xi Jinping pledged $60bn for African projects over three years. The country pledged $100m in military aid to the African Union in 2015, and China supports African countries’ capacity-building in areas such as defence and counter-terrorism, according to the Council on Foreign Relations.
Furthermore, between 2000 and 2014, Chinese banks, contractors and the government loaned more than $86bn to Africa, according to SAIS-CARI. Angola, the DRC, Ethiopia, Kenya and Sudan were the top recipients.
However, Tim Wegenast, co-author of the GIGA report says, often, Chinese investments are not providing on-the-ground benefits for Africans.
“It’s more or less safe to say that Chinese companies employ less local labour than other companies because they bring over many Chinese workers,” says Wegenast.
“And when they [the Chinese] develop local infrastructure, they provide countries with loans which are being used to pay for it, which is then constructed by Chinese companies and Chinese labour.”
Lizzie Parsons from Global Witness says many Chinese companies overseas have a ‘long way to go’ before they can be considered as engaging well with local communities.
“We are hearing of multiple cases in different continents where opportunities for improving development outcomes are being lost because complaints are submitted by communities without any response from the companies themselves,” she says.