Thatch covers the wooden roof of The Clubhouse in Abuja and the tables are decorated with animal-print cloths. The casual restaurant in Nigeria's capital looks archetypally African, but it is also distinctly Lebanese, serving dishes such as hummus and shish kebabs.
Early on a Saturday night, a young man in traditional clothes taps on
his smart phone while manager Assaad Abi Antoun sips Lebanese coffee at
a nearby table. "Lebanese can do hospitality at the top level," says
Mr. Antoun, who has been here for four years.
The Lebanese are well known in West Africa
for owning posh hotels, restaurants, and grocery stores. But, like
other immigrant groups working on the continent, the Lebanese are not
nearly as famous worldwide for investment in Africa as the Chinese, who are popularly believed to be "taking over Africa."
The great China
takeover, however, may be something of a myth, according to Bright
Simons, an honorary fellow at the Ghana-based IMANI Center for Policy
& Education. China is Africa's biggest trading partner – it took the
top spot from the United States in 2009 – and a large source of
capital. Trade between Africa and China, which totaled $10.5 billion in
2000, ran $166 million in 2011.
But Canadians, Americans, Britons,
the French, and Australians still represent a heavy footprint in
Africa. And a plethora of investors from other emerging economies are
becoming more integrated into Africa's social and political life, Mr.
Simons says. While not eclipsing China, these new kids on the Africa
block are showing a dynamism previously hidden by China's shadow.
African trade with South Korea and Brazil
has moved from single-digit billions in 2000 to more than $25 billion
each in 2011. (Korean giant Samsung peppered the continent with $150
million in shops, technology, and employment between 2010 and 2012, the
company says.) India's
footprint is small, but growing at 400 percent a year, according to
Páidrag Carmody at Trinity College Dublin in his 2013 study "The Rise of
the BRICS in Africa."
Investment by the emerging economic powerhouses of Brazil, Russia, India, China, and South Africa (BRICS) has doubled since 2007 in Africa, though numbers are notoriously poor (see accompanying story).
A 2013 United Nations study shows African foreign direct investment
grew 5 percent, to $50 billion, while shrinking in nearly every other
region.
Africa's 'rise of the rest'
Africa
auctions off mining and oil exploration to a "broad array of companies
from around the world that you did not see before," says Todd Moss, a
former senior State Department official dealing with Africa who is now
at the Center for Global Development in Washington, D.C.
The push
is being called a "rise of the rest" for Africa, or a new "South-South"
partnership. Partly the story is of high rates of growth. New
"greenfield investments" – business start-ups – from South Africa and
the United Arab Emirates have eclipsed those of China, according to a
new Ernst & Young study.
"People have said China is bolstering
its 'soft power' through the use of charitable projects, Confucius
Institutes, donations of medicines, etc.," Simons says. "But the truth
is that most of these projects are lackluster."
To be sure,
China's role in Africa will never be insignificant. Large-scale symbolic
projects such as the highway across Nigeria or the new African Union
headquarters in Addis Ababa, built by China at a cost of $200 million
and the tallest structure in Ethiopia's capital, are hard to miss. With
trillions in cash reserves and few legal restrictions on public-private
partnerships, China's presence in Africa grows daily.
But the idea
that China and the West are the only competitors in a battle for
Africa's resources and markets is outdated, says Ben Payton, an Africa
analyst at Maplecroft, a Britain-based global risk analysis company. "In
addition to Africa's traditional partners in the West, there is growing
interest in Africa's resource wealth from companies in countries such
as Brazil, India, Singapore, and South Korea," Mr. Payton says. "By some
measures, Malaysia provided more foreign investment in Africa than
China last year."
Nations like Malaysia appeal to African states,
says Mr. Moss, the former US-Africa trade official, as an "Asian model"
that emphasizes strong political control and wealth. "Americans want
both political openness and open markets, but Asians stick to a
commercial relationship," he says.
With only Asia
growing faster as a region than Africa, foreign investment can be
successful on the continent despite troubles such as constant power
outages and muddled trade laws, according to Thomas Hansen, a senior
Africa analyst at Control Risks, a security assessment firm. "It's one
of the few places in the world now where you can get a relatively high
return on your capital," he says.
South Africa understands
In
Nigeria, Africa's most populous country, with more than 160 million
people, Indians own many of the supermarkets and computer shops. South
Koreans are well known for making affordable electronics available.
Brazil and Russia are growing players in Nigeria's gas and its 2.2
million-barrel-a-day oil export industry, the largest in Africa.
South
Africa, the largest economy in Africa, stands out as one of the most
successful investors, leading the telecommunications industry on the
continent and building shopping malls and supermarkets, according to
Simons of IMANI. South African investment tends to be visible in terms
of social impact, he adds.
"South Africa has the exceptional capacity to understand Africa," he says. "South African investments tend to be savvy."
At
a cafe in Abuja on a Sunday afternoon, waitress Becky Utase flips her
BlackBerry in her hand. Despite rapid economic growth, the African
continent is still the poorest in the world. Ms. Utase says foreign
investment only matters to her if it somehow helps Nigerians live better
lives. Mobile phone networks, she adds, mean the world to her.
Before
cellphones, much of Nigeria and the continent was not connected by land
lines. Utase says she remembers when posted letters or physical visits
were the only way to keep in touch. "Communication is easier," she adds,
sitting on a couch overlooking her dining customers on the patio. "Even
work is easier. Back in the day all business needed to travel."
South
Africa's MTN leads the telecommunications industry, and other major
phone companies in Africa are based in the United Arab Emirates and
India. Nigeria's own Globacom Ltd. provides mobile phone service in
three other West African countries.
All these non-Chinese telecom
companies, however, sell equipment such as handsets, headphones, and
chargers made in China. Among the many innovations in mobile technology
especially suited for Third World customers are popular prepaid flash
modems, almost exclusively produced by China's behemoth Huawei
Technologies.
Anti-China platforms
People
in Africa often say they like China because the country's investors
build roads, the needed predecessor to development and economic growth.
But that doesn't necessarily translate into winning hearts and minds,
according to Payton, the Africa analyst.
"Chinese companies are
generally far less concerned with respecting internationally recognized
labor standards than their Western counterparts," he says. "As a result,
workforces and local communities in countries such as Zambia have become increasingly hostile to Chinese employers [see sidebar]."
This
hostility feeds on itself when African governments use it to distract
the public from their shortcomings, according to John Campbell, former
US ambassador to Nigeria now at the Council on Foreign Relations in New
York.
Both Zambia and Malawi have elected presidents who ran on anti-China platforms.
"The
tendency," says Mr. Campbell, is "to blame the Chinese for certain
domestic shortcomings, particularly about whatever government is in
power."
The main difference between Chinese investors and all the
rest, according to Mathew Agabi, who works at a popular Indian-owned
supermarket in Abuja, is that Chinese companies are known for importing
their own workers, and that angers many Nigerians. Locals employed by
Chinese companies also are expected to work what Nigerians call "slave
hours."
When Chinese companies don't hire locals and teach them
technical know-how, Mr. Agabi says, they leave behind a community of
workers that can't handle or maintain high-end operations. "South Korean
companies don't have those issues," he says.
Chinese investors
are not alone in angering Africans. Nigerians complain that most foreign
companies may hire a majority of locals, but then give choice positions
to expatriate workers. Nigerians particularly loathe Western clothing
companies that prefer to open factories in Asia and overlook a massive
pool of unemployed laborers in Africa. "They should build factories,"
Agabi says.
Investment anxiety, however, targets China
because it tends to be the least accessible culturally, according to
Payton. Few Africans speak Mandarin, and many fear that Chinese
investments allow African governments to evade Western demands for
compliance with human rights standards.
"In the long term, there
is a risk that anger at perceived Chinese exploitation could escalate
into a perception that China's political and economic clout enables it
to exert a form of neocolonial domination over Africa," he says.
On
the other hand, he adds, China has championed poverty-alleviation
programs at home and could serve as an example for policymakers in
Africa.
"Chinese investment is not only providing Africa with new
infrastructure and new sources of capital," he says. "It is also
altering the horizons of policymakers and driving a new confidence in
the continent's economic outlook."
Back at The Clubhouse in
Nigeria, manager Antoun says China may not be literally taking over
Africa, but its presence is certainly palpable. A few years ago, Antoun
says, he had one-fifth as many Chinese customers. Most of their work is
in construction, he adds, and infrastructure draws other investors.
When
his place opened about seven years ago, it had been a canteen for a
construction company, without air conditioning, reliable electricity, or
even a fan.
"There was nothing, from decoration to infrastructure," he says.
Antoun
is not concerned that Chinese investors will drive others out because
the Chinese tend to keep to themselves and avoid businesses with a high
public profile, he says. In Nigeria, he adds, foreign companies struggle
more with dealing with the country's chaotic business policies and poor
infrastructure than competing with each other.
Hurdling those
barriers, he says, is one thing Lebanese excel at. But he is sardonic
about his reasons for working in Africa. The Nigerian economy is growing
more than four times as fast as the Lebanese economy, according to the
CIA World Factbook, and insecurity in the Middle East is making things
worse. "We have to do something outside [Lebanon]," he says, lifting a
single finger in the air, "because the chances in Lebanon are between
zero and one."
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