The Impact of Emerging Countries on Sub-Saharan African Economies: Factors of Long-term Growth?
Résumé
China has become a major trading and investment partner of Sub-Saharan African economies since the early-2000s, with the economic impact of China's relationship with Sub-Saharan Africa having become the subject of an increasing literature. The paper shows the complexity of these trade and investment relationships and their impact on Sub-Saharan economies. It argues that beyond their ambivalent effects, these relationships may foster the structural transformation of African economies, i.e. a break with the pre-existing structure of the economy, industrialisation and productivity growth - the 'emerging Africa'. Sub-Saharan African economies have indeed exhibited spectacular growth rates since the early-2000s, which have mainly been driven by China, via several direct and indirect transmission channels, notably China's demand for goods produced in Sub-Saharan Africa and its contribution to high international commodity prices (e.g., for metals, oil), Sub-Saharan export structures being characterised by a high proportion of primary commodities. Different views could suggest that there are uncertainties, in particular that Sub-Saharan growth rates stem from distorted export structures, i.e., based on primary commodities with low value-added, and that these growth rates may not imply any change of commodity-based export structures. These growth rates may even strengthen commodity-dependence, as high growth rates and high prices are incentives to continue the status quo and may lock African economies into the exporting of primary commodities, with its negative effects (vulnerability to volatile prices and external shocks, 'Dutch disease'). These processes may threaten Sub-Saharan African economies' prospects for industrialisation and they may be compounded by the weakening of African industrial sectors by cheaper manufactured products from China and its undervalued currency. China's export credits may also expose African economies to future debt problems. Similarly, African governments' economic policies, which have been destabilised by decades of the programmes of international financial institutions, may not be able to harness the new opportunities offered by China. Against these views, however, the paper argues that Sub-Saharan African countries' growth rates may stay at high levels, as China's growth (and that of other emerging countries') is expected to remain sustained in the medium term, and as the price of some commodities may stay at high levels during the next decade. A long period of high growth rates, together with an improved fiscal room for manoeuvre, may therefore constitute a genuine opportunity for structural transformation for African economies. Equally, commodities may create linkages towards industrialisation. In addition, China's relationships with Sub-Saharan Africa are also driven by important and increasing investment, not only in African countries' infrastructure, but also in industrial sectors, both being key determinants of diversification and structural transformation.
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