SADC Picks on China’s Belt and Road Initiative

Published on 3rd September 2019

Tanzania recently hosted the 4th SADC Industrialization Week under the theme: A Conducive Environment for Inclusive and Sustainable Industrial Development, Increased Intra-regional Trade and Job Creation, that was officially opened by President John Magufuli who is slated to take over the SADC leadership later this month at the 39th Ordinary Summit of SADC Heads of State and Government scheduled to be held on 17th and 18th August. The Industrialization Week, this time held between 5th and 9th August 2019 in Dar es Salaam, Tanzania, is an annual event designed as a public-private engagement platform that helps to foster new opportunities for intra-African trade and investment in the Southern African region.

SADC’s Industrialization Strategy and Roadmap, 2015-2063 has three main pillars: industrialization for economic and technological transformation; competitiveness; and regional integration. Shifting away from industrialization powered by increased labor and capital investment, to one powered by efficient resource deployment in production processes, SADC’s industrialization strategy aims to promote regional integration as a backdrop from which to maximize member countries’ sectoral and international competitive advantage.

At the just concluded 4th SADC Industrialization Week it was noted that while SADC region is resource rich, industrialization has not so peaked as to allow member states’ transformation from commodity-based, raw material exporters to manufacturing economies. Further, intra-regional trade has remained low at 22% of SADC trade. Various priorities were identified by SADC, which present an opportunity for mutual cooperation between SADC and China, hence the adoption of BRI as an industrialization partner.

Both China and Southern Africa are in a period of economic and social transformation. China is a developing country and SADC’s member states are themselves developing countries. Similar to Southern Africa’s own SADC framework, China’s adopted approach for integrating regionally and internationally is its Belt and Road Initiative. China has emphasized its desire to seize the opportunity created by the complementarity between China’s and African countries’ respective development strategies, including the African Union’s Accelerated Industrial Development of Africa and Agenda 2063, and the major opportunities presented by the Belt and Road Initiative. As part of BRI in Africa, at FOCAC Beijing Summit 2018, President Xi highlighted eight major initiatives for China-Africa cooperation: industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, healthcare, people-to-people exchanges, and peace and security. There are a number of shared interests between China’s BRI and SADC development strategies that fall within these initiatives.

Firstly, China’s BRI has successfully leveraged fluid trade between its neighboring countries and thereby built value chains for product assembly and at cheapest manufacture cost. Similarly, SADC is now seeking to build regional value chains in priority sectors, such as mining, in order to drive industrialization, including green industrialization, and could learn from China’s experience. China has committed to undertake 50 projects for green development and ecological and environmental protection in Africa, to expand exchanges and cooperation with Africa on climate change, ocean, desertification prevention and control, and wildlife protection.

Secondly, SADC is pursuing industrial transformation via harmonization of national and regional strategies and regulatory frameworks with continental and global instruments on industrialization such as BRI.

Thirdly, SADC is keen to promote foreign direct investment in member states in order to boost regional development and trade. At FOCAC 2018 China also committed to encourage Chinese companies to make at least US$10 billion of investment in Africa over the next three years. China’s funding has also facilitated numerous infrastructure projects such as improved railway systems in Angola and Djibouti; construction of the Caculo Cabaca Hydropower project in Dondo, Angola; a special economic zone in Congo; and a cement factory in Zambia – the China National Building Material. Indeed, of the $60billion FOCAC 2018 commitment, China earmarked $15billion towards concessional loans for infrastructure projects in Africa.

Fourthly, in order to promote trade within the region, SADC is looking to embrace e-Commerce and ICT, reduce trade barriers by aligning with the African Continent Free Trade Area and reducing procedural obstacles such as free movement of skilled persons. China’s approach to trade facilitation in Africa is through increasing imports, particularly non-resource products, from Africa. Through cooperation agreements under BRI, SADC members states have the opportunity to participate in: China International Import Expos, exchanges and cooperation on market regulation and between customs authorities, China’s trade facilitation programs, and China’s mechanisms set up to promote e-commerce cooperation with Africa.

Fifthly, SADC’s industrialization plan recognizes the role of research, innovation and technology in development and to this end intends to invest in skills development in areas of digital skills, data science, artificial intelligence and robotics in order to leverage the opportunities of the fourth industrial revolution for industrial development. China’s capacity building initiative for Africa includes sharing its development practices via Luban Workshops that provide vocational training for young Africans, opening a China-Africa innovation cooperation center to promote youth innovation and entrepreneurship, 50,000 government scholarships and 50,000 training opportunities for seminars and workshops, and exchange opportunities for 2000 African students.

From the foregoing, there is indeed great potential for shared growth between China and SADC member states, arising from mutual cooperation in the industrialization and improved regional infrastructure within Southern Africa. By adopting China as its preferred industrialization partner, SADC recognizes the mutual benefit as China taps into the 16-member market and SADC taps into China’s vast expertise in industrialization and infrastructure resources allocated as part of the Belt and Road Initiative.

By George Nyongesa,

Senior Associate at Africa Policy Institute (Nairobi, Kenya)

Twitter: GeorgeNyongesa

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