African Development Bank Chief Economist Mthuli Ncube says Africa welcomes investment from China as it does from other sources. Ncube is attending the World Economic Forum in Davos, Switzerland.
African Development Bank Chief Economist Mthuli Ncube says China’s long-standing political relationship with Africa is increasingly giving way to an economic relationship.
He says China has become a valuable partner in many ways and that China is willing to play a role in stimulating investment, which Africa sorely needs. In addition, he says China is beginning to play a larger role in providing humanitarian aid to poor African countries.
China is often criticized for allegedly plundering African resources without regard for the welfare of the workers and the society. Ncube says there is some truth to these assertions. He believes China should do more to create partnerships with local communities.
“But, I think really largely the investments have been positive,” said Ncube. “They have created jobs and I welcome these new industrial parks. But also I advise them that it is important for foreign investors to work at these joint ventures is a way of stimulating local innovation.”
When it comes to greed and exploitation of Africa, Ncube says there is a lot of blame to go around. For a long time, he notes multinationals have been spiriting resources out of Africa through clever tax arrangements and through myriad subsidiaries around the world.
“Figures vary from $80 billion to $100 billion,” Ncube added. “It is a lot of money. For me, and that is a very big issue, that is happening – it is being carried out by traditional companies that operate in Africa from the West. So, I am less worried about Chinese investments in terms of political issues. Africa just needs more investments.”
Ncube says he sees Africa as the next frontier in terms of investment. He says he is disappointed in the global leadership. He says the G-20 countries still view Africa as residual, rather than being part of the solution in helping to boost the world economy.
He notes several of the 10 top performing countries around the world are in Africa. He says African countries are moving slowly, but economies in the region are growing. He says it is not clear whether Africa will be the next China, but it is moving in the right direction.
“It probably will not be moving at the speed and with the harmony and focus that China moves,” explained Ncube. “But, we have got to have a concerted effort about 54 countries working slowly together and sometimes not working so well. And, the countries are also different from region to region. But, I am saying largely yes, it is the last frontier. It is an investment opportunity. In my view, it is a piece of the world that ought to be at the core of our thinking around global economic growth.”
The African Development Bank is located in Tunis. So, Ncube, who is based there, has had a birds-eye view of the discontent that led to the overthrow of Tunisia’s authoritarian ruler.
He says the events in the Magreb have focused attention on the need to address youth unemployment. He warns governments that do not practice a form of democracy and are mired in corruption are also vulnerable to being toppled.
He says good governance and transparency are important for stability. He says governments must put greater effort into creating jobs for young people.