London, 2 November 2009
There is a debate among geopolitical and economic commentators about the merits of Chinese versus western involvement with Africa. One argument is that Chinese investment is exploitative and undermines the development of democracy and human rights on the continent. Others view the matter in terms of competition, arguing that China is encroaching on the decades-long monopoly of the west over Africa’s natural resources.
Neither of these viewpoints addresses the core issues. First, major players in global investment and development are discussing Africa without engaging its people as equal partners. Second, Africans are not seen to be proactive in setting their own priorities and terms of engagement.
Development aid, fashioned on this skewed relationship, has long been a key source of income for the continent. While helpful, aid has not delivered sustainable development. It is clear that trade and investment bring greater opportunity for wealth creation. Africa welcomes investment, from the east and west, north and south, and Rwanda is no exception. We want investment that offers skills and jobs, encourages entrepreneurship, and provides the opportunity to improve millions of lives.
This call for investment and trade rather than traditional aid does not mean the latter’s contribution to addressing poverty is not recognised. However, the fundamental problem with the current development aid practice is the danger countries face as they become perpetually reliant on handouts.
So what should those who give aid, and those who receive it, focus on? The primary purpose of aid should ultimately be to work itself out, leaving a positive legacy behind. Aid should also be used to create opportunities for trade, enhance self-sufficiency and assist with the development of a robust private sector to attract investment. In many countries, for example, aid offers resources such as fertilisers for free. The intention is good but this often prevents local businesses from being able to provide these goods competitively. Given the choice, people would prefer to work and provide for themselves, rather than receive charity. Africans want self-determination and dignity.
Our continent, like others, requires investment to further its development. Efforts to pursue this need not be seen as a threat to the strengthening of democracy. Of course, African leaders should take good governance and human rights seriously – and most do. This is not – and should not be – because anybody else tells us to, or in return for investment, but because it is the right thing to do. The presence of Chinese investment in Africa does not discharge governments of their responsibilities any more than its presence in the EU or US should erode human rights there.
In Rwanda, we have worked hard to tackle the root causes of corruption and ensure there is a strong case for attracting investment. This programme of reform is yielding results and has been recognised by the World Bank’s 2010 Doing Business Index, which saw Rwanda jump from 143rd to 67th position in one year, making it the world’s leading reformer. In 2008, Rwanda’s GDP grew at 11.2%, and despite the global financial crisis our 2009 projections give us cause for optimism. Wages in key export sectors have grown more than 20% annually over the last eight years, and all these developments have occurred while the percentage of our national budget funded by aid has been reduced by half since 2001.
Ultimately, Africa’s relationship with its international counterparts should be redefined. For too long, we have not been able to trade fairly with Europe and the US; trade barriers and subsidies, particularly in agriculture, have protected external markets from African products, hindering our ability to trade as equals. Investment and trade with willing countries, including intra-African trade, helps the continent to build a much-needed culture of entrepreneurship and development.
All would benefit if the world focused on increasing investment in Africa, and if Rwanda and the rest of the continent worked to establish more equitable international partnerships. A trade relationship built on this new approach would be more helpful in reaching what should be our common goal: sustainable development, mutual prosperity and respect.