The African continent is on the brink is a very great thing. For over the past one year, the continent has received so many agreements on tech startup hubs all over from Agadir to Kigali to Lagos. The American tech entrepreneurship model is sparkling revival in the continent. Many American VCs are beginning to settle in Africa, although despite all this, many questions are still going unanswered.
Such questions include whether the African market will maintain its stability well enough to harbor the next billion-dollar tech companies. Although to understand the African continent that is rising, you should consider understanding why the roads to Africa are going through China.
Chinese Economic Rollercoaster
From early 90s, the economy of China grew at a rate of 8% to 16% consistently all year round. Actually, it is only during the global financial crisis that this growth rate dropped to 7 percent. It mainly happened due to the fact that the west started to offshore and outsource its traditional manufacturing in the favor of Chinese produces which were less expensive. As a result, the Chinese middleclass made a lot of gains exceptionally. They also grew tremendously. Underwater construction loans, a cooling growth rate, and a credit crunch all flew to the harmonious Chinese country. Stability and harmony are the central value policies of Xi Jinping, Chinese President.
The Tale of the Chinese Patron and the African Builder
When you mention the Sub-Sahara Africa in the western counties, the images that they get about the whole place are of crushing poverty, Ebola, tribalism, malaria, hunger, and war not to mention other negative vices in such third world countries. For the past half century, the western countries have been pouring money to the content so as to combat such ills. Although, the Chinese country has been increasing its FDI (Foreign Direct Investment) to Africa steadily but quietly over the past decade. It has been driven mainly by China’s meteoric economic growth. Imports and exports between china and Africa has shot up tremendously between this periods.
Why is China Investing So Much in Africa?
The reason as to why China has invested so much in Africa has raised a lot of questions in the west. Unlike the west’s investment into Africa, China is targeting the countries that have got no good governance. Such counties include Zimbabwe, Nigeria, DRC, and Sudan. By so doing, the country is able to make a play for the raw resources in Africa like mining that will offer it with fuel in its manufacturing sector.
Even with these remarks, according to the World Bank, Africa is destined to become the next great investment destination. More and more offshore services and manufacturing companies are looking into Africa where they can source labor and materials.