By Edward Chisanga
Are rich countries exploiting Africa or simply trading?
A group of Zambians argue that Africa has been exploited for too long by rich countries that have consigned it to supplier of raw materials for their continued industrialization and other use while Africa imports finished goods from them. They contend, China is doing exactly the same thing to Africa. It exports manufactured goods to the continent while Africa exports raw materials to China. Zambia exports more primary commodities to China than it does manufactured goods while China exports more manufactured goods than it does with primary commodities. And, they say this must stop by African countries trading with each other.
The truth is that this exploitation goes beyond rich countries, China or other external partners. Within Africa itself, South Africa exports more manufactured goods to other African countries including Zambia than it does with primary commodities. This is because that is what South Africa has. On the other hand, African countries including Zambia exports to South Africa more primary commodities than manufactured goods because that is all they have.
If they had manufactured goods, of course they would gladly export. So, is it the fault of rich countries, China or South Africa that they export manufactured goods to African countries in exchange for primary commodities? Trade is about comparative advantage. I export products in which I have strengths and import those in which I have weaknesses to produce. So, with structural weaknesses in the production of exportable dynamic products, in particular manufactured goods, Africa and Zambia can only export primary commodities largely in their raw form. Zambia exports raw copper because it has no machinery, human skills and infrastructure to produce it. The argument that rich countries have neglected us and that they perpetuate our dependence to produce raw materials while they export processed goods to us is flawed.
Vietnam exports more manufactured goods to China
Vietnam has overtaken Africa in exports of manufactured goods to the world. Bangladesh, a least developed country in Asia has overtaken Africa in exports of textiles and clothing products to the world. If both of them are exploited by rich countries, perhaps it is in another sector, not in exports of manufactured goods. Why are Africans and Zambians always blaming someone else for their own misfortunes? Viet Nam was almost obliterated from this world by atomic bomb war. Yet, it exports more manufactured goods to China than Africa. Viet Nam exports more manufactured goods to the US and the EU. To the US, its exports stood at $72.6 billion manufactured goods and only $4.1 billion primary commodities in 2020. To the EU, exports of manufactured goods stood at $35.8 billion compared to $$4.2 billion primary commodities.
Since independence, Africa or Zambia have had no war with external adversaries to cause the hardship suffered by Viet Nam. Yet, they’re full of excuses or blaming someone else for their underdevelopment. If Viet Nam blamed the US, the world was not aware. But one thing for sure is that Viet Nam replaced blame or excuse by hard work. Viet Nam has used foreign direct investment and international trade to develop. Some Zambians argue that Zambia can develop on its own. Some Africans too contend that Africa can develop itself. It is no insult that Africa is puniness therefore will take many years to develop on its own. The world is interdependent. That is why those with products collect wealth from other countries through trade. They also collect foreign direct investment from those who have it. They don’t invest their resources in blaming others or giving excuses.
Africa, Zambia export more primary commodities to China
As Figure 1 below shows, Africa’s exports of primary commodities to China totaled about $50.1 billion relative to only $2.6 billion manufactured goods. If rich countries exploited Africa for many years by importing only raw materials, and failing to support the continent to process its goods, why is Africa and Zambia allowing China, without guns as was the case during colonialism, to do exactly the same thing scot-free? If the European model was characterized by unfair partnership, why are we allowing the Chinese who don’t use guns to kill our fragile and uncompetitive industries, kill jobs and create more hunger for our people?
Perhaps China’s biggest shopping mall near the Makeni shopping mall makes a lot of money coming from Zambians who buy these manufactured goods. But look at the public toilet that the mall offers its clients? Those who have been there will know that this is the way some Chinese investors in our country grade us as human beings. And PF leaders have been allowing them. I hope the new dawn government will give us sanity and respect for our human rights. If we pay you by buying from you, especially so much money, surely, we deserve the right to large and clean toilets with clean water.
China exports more manufactured goods to Africa, Zambia
It is lopsided and hugely warped that China’s exports of manufactured goods to Africa totaled about $107.2 billion or double the primary commodities shown in Figure 2 below what Africa exports to China. But it is also the reality. If you form a trade partnership with unequal partner, you have to accept that you will be the loser while the other will be the winner. It’s even made worse when Zambia benefits from another segment of the partnership completely different from trade. China is supporting Africa and Zambia in infrastructure-building and other non-trade matters such as finance, etc.
There seems to be a silent agreement that what China exploits of Africa or Zambia will be compensated by these non-trade support measures. That agreement seems to be something like, “China is giving us non-trade help; hence we cannot complain about the trade unevenness.
Is Africa simply failing to negotiate for support in manufactured goods with its partners?
Those who have negotiated international trade agreements like me for many years will understand that it is difficult if not impossible for Africa to acquire in the agreement with rich countries a provision to support processing of exports. I negotiated in the World Trade Organization (WTO) for almost ten years as a diplomat, on behalf of Zambia and Africa and least developed countries but ended my tenure without any success. In the WTO for example, there are some clear provisions that speak about rich countries helping least developed countries to acquire technology transfer but are never implemented.
I don’t know about Viet Nam and the US. But I do know about the US regional trade agreements with other countries. I have not seen any mandatory commitment in any that will require the law to take course in case the US failed to implement that provision. If there’s any such provision, and more importantly, it is being implemented and that partner is obtaining technology transfer from the US to transform its economy from exporting primary commodities to manufactured goods, I’m the first to apologize. The Southern African Development Community or Southern African Customs Union may contain provisions for industrialization of smaller members. But none is industrializing. Exceptionally, the EU is implementing provisions to help its poorer members to integrate and export manufactured goods.
The point I make here is that it will be an illusion for Zambia or Africa to think that it will negotiate with rich countries to provide technology transfer or value addition in exchange for importing copper or other raw materials from Africa. It has not happened for any country. It will not happen. Part of the reason why the WTO agreement was finally signed after many days and years of disagreement is that rich countries promised quid pro quo. They asked developing countries to sign because they would offer them technology transfer and foreign direct investment. They asked them to sign the agreement on services and make binding offers in return for foreign direct investment. Two decades later, that investment is still awaited. They said signing the trade related aspects of intellectual property (TRIPS) would bring technology transfer. Today when challenged, rich countries argue that technology transfer is not a government matter. It is a private-owned matter and governments cannot interfere.
Conclusion
Africa and Zambia should stop engaging in self-aggrandizing or self-approbation when dealing with their rich partners. They will not give us what we need most in trade. What we need most is to export manufactured goods to them. They did not give Tunisia whose world exports of manufactured goods in total is about 80%, Bangladesh 95% and Morocco 72%. These countries did not send a long list of excuses or complaints to rich countries. In the WTO, Africa is renown for nothing but complaining. Africa thinks that industrialization will come from WTO.
But no one in WTO ever hears the voice of diplomats from Viet Nam complaining or speaking. They are there to take advantage of the market access provided by WTO. Africa has to find export value addition by itself. By that, I mean by engaging with rich countries in foreign direct investment and growing their anemic private sectors. Africa should learn from Viet Nam, China, Bangladesh, Thailand and other emerging developing countries in Asia whose many things they have in common. It is more productive to have an economic Embassy in Viet Nam, to learn manufacturing only than some prestigious ones where we get nothing. I maintain my position that like Asian countries, African countries should create wealth from rich countries through exports of manufactured goods and foreign direct investment. Let us blame ourselves.
The writer has got this SPOT ON;;;
1. Look at Asia – All countries are sustainable.
2. Forget politics – Look at Rwanda – Did they build a huge Airport – NO – a SMALL aIRPORT BUT THEY HAVE THEIR OWN PLANES TO BRING IN TOURISTS ETC –
3. What does Botswana, New Zealand export ? BEEF AND LAMB – WHY CAN’T WE ?
4. clothing industry – Why are all the brand names in Asia – Cheaper production costs – Again exports and employment.
5. WHY IS BENZ , TOYOTA ETC MANUFACTURING IN ASIA – CHEAPER PRODUCTION, EMPLOYMENT AND FOREX.
SO STOP THE BLAME GAME – WE BUILD A BIG AIRPORT, BRIDGES ETC AND GET SO EXCITED – REALLY ????
WAKE UP AFICA BEFORE IT IS TOO LATE
We are a continent of philosophers…. you can only develop if become a continent of inventors and innovators.
I beg to differ, industrialisation is not the answer. Strong leadership and direction is what Africa needs. By industrialising, we are following a concept that has been perfected by the same people we are accusing of stealing our raw materials from us. We need our leaders to start saying no to exploitation and corruption first and prioritise good health and education among their people. Cut out the greed and cushion Africa from exploitation. Industrialisation is not sustainable that’s why we get exploited because these countries have depleted their resources. Why do you think they are spending vast amounts in space exploration? Simple answer is that they are looking to find a new Earth to start the damage all over again.
This LT website, don’t you review your user experience with your website? sort out your moderation criteria…you need to move on with the time.
The only threat to Africa’s economic development is greedy corrupt capitalists like hh who are so weak enough to sell their country’s resources for peanuts. May the Lord punish them
The author has written a long piece about nothing. Points out the problem but he fails to offer any viable solution. The author should have simply said we need to identity key sectors where we have some comparative advantage + Capital + Entrepreneurs who are well educated in marketing, product design, and international business. In short creative business people with GUTS! I wonder what he was negotiating at WTO. No wonder.
I don’t agree with the author when he says: “Zambia exports raw copper because it has no machinery, human skills and infrastructure to produce it.”
This is just an excuse. The question is: what is stopping us from investing in machinery, human skills and infrastructure to manufacture copper products? We’ve had over 57 years of independence to do that, so we DON’T have an excuse! Like Marcus Garvey said: “ye race of imbeciles, ye race of good-for-nothings, if you cannot do what other races have done, what other nations have done.. then you deserve to die!!!”
”The only threat to Africa’s economic development is greedy corrupt capitalists like hh who are so weak enough to sell their country’s resources for peanuts. May the Lord punish them” The PF loss hit him so hard that 4 months down the line up to now he can not recover from it. Well done Zambians you taught them a good lesson, at least they will not forget this lesson in their life time on earth, maybe they will not forget the lesson even in the after life. Continue dreaming that PF will bounce back to power again. By the time you wake up from that dream and sleep, perhaps that is when you will see clearly.
Chikonko it appears it’s you suffering from chikonko. You deserve to be whipped like a little school boy who has been caught touching himself.
Yes. If Africans don’t get up off their backs everyone will continue being on top! Get up, dress up, and show up! A mambala.
#7 Nine Chile… let’s go down memory lane ( unfortunately 2 thirds of the bloggers here were not born yet)… Unip under Dr Kaunda established manufacturing industries including vehicle assembly, television and radio ( ITT) , drinks etc. When the MMD won the election and formed government in 1991 the first thing they was under the instructions of the IMF to dismantle (call it privatization) all these industries and to start importing all items. Okay it’s water under the bridge… but just imagine if we had continued where we would be now. We never exported ore concentrate, but now it’s not unusual. We cannot blame foreigners ( they are not our mothers, mind you)… they are also in business…we should blame ourselves for having no faith in ourselves.
Our rich are all in politics; how I wish we had more Dangotes!
UPND strategy to grow Zambia economy is financing, refinancing. Hopeless strategy. If we, Zambians, cannot put our resources to good use, we will never develop this country. How honest are the UPND leaders regarding fighting corruption when they do not want us to see how their decisions are connected to their companies. Nevers Mumba, an opposition leader does not understand the rule of law, can somebody explain to him what is meant by a rule of law. At present Zambia is more on the dark side, rule of a man. The reason we are begging Hh to denounce violence.
Africa will continue to be poor and exploited if we don’t shift towards a knowledge economy.Process our material and export “knowledge products” cuz the less effort you put in the lesser you earn.
LT please ban this troll named ichi Kaizar Zero for breaching your rules repeatedly. We’re all equal to the rules.
Kwena…Zambia is doomed. The comments pali iyi article are testament. Only a fool can disagree with what the author has said. Industrialization is KEY bane. We can not continue to rely on the export of natural resources. Why not use those natural resources right here in Zambia to produce finished goods to export to wealthier nations? We have copper and cobalt why not manufacture electric cables, and other high demand copper products right here in Zambia? Why not manufacture batteries for electric cars right here in Zambia? We can invite the large manufacturers who rely on these resources to set up industries right in Zambia in partnership with Zambian entrepreneurs or the Zambian government. Let me give an example: Ghana and Ivory coast are the largest exporters of cocoa in the world…
Let me give an example: Ghana and Ivory coast are the largest exporters of cocoa in the world. The whole world consumes chocolate. The west can not do without it. So what has Ghana done? It has banned the export of raw cocoa. Anyone who wants access to the raw cocoa must set up their factories in Ghana. Unlike cocoa, our copper is not a renewable resource, so we should not rely on copper for umuyayaya. That’s dull thinking. The United States, Russia, Australia, Mexico, and even China have larger copper reserves than Zambia, yet they are not entirely dependent on copper alone. Ala bane long term planning fintu. Zambians we need to change our mindset. I’m so disappointed with some of the comments here. The author has given very good examples. Compare Vietnam, and Thailand back in the day…
Ala bane long term planning fintu. Zambians we need to change our mindset. I’m so disappointed with some of the comments here. The author has given very good examples. Compare Vietnam, and Thailand back in the day to Zambia back then. Lelo they are both much better than Zambia. How did they do it ? Where did Zambia go wrong? The author is right!
The author has given very good examples. Compare Vietnam, and Thailand back in the day to Zambia back then. Lelo they are both much better than Zambia. How did they do it ? Where did Zambia go wrong? The author is right!