Thu, Nov 30, 2017 - Page 9 News List

The China factor in Kenya and Zimbabwe

As the two African countries navigate their political futures, their economic and political ties to China could be key in assessing the direction each will take

By Hannah Ryder

Illustration: Mountain people

Ask anyone with a basic knowledge of Africa which country is more poised for success — Zimbabwe or Kenya — and they will undoubtedly answer “Kenya.” Events of the past week would seem to confirm that verdict.

Last Monday, after the Kenyan Supreme Court upheld the re-election of Kenyan President Uhuru Kenyatta in the country’s contested presidential election, the rule of law seemed to trump political violence for the first time in years. Zimbabwe, on the other hand, is without former Zimbabwean president Robert Mugabe for the first time in 37 years. Although the country might be ecstatic now, its political future is far from certain.

As a Kenyan living in China, one of the African continent’s most important development partners, I see one metric that tips the scale in Zimbabwe’s favor: its relationship with my adopted home. In fact, Zimbabwe’s economic and political ties to China could prove decisive for Africa’s perpetual underdog.

On paper, Kenya clearly has the edge. Although Zimbabwe has more natural resources and mineral wealth, it has far less land and extreme poverty is much more widespread. More than 70 percent of the country’s 16 million people live on less than US$1.90 a day, compared with 46 percent of Kenya’s 48 million people. Moreover, as many as 90 percent of Zimbabweans are unemployed or underemployed, compared with 39 percent of Kenyans.

Even Kenya’s economic links to China might seem more impressive at first glance. Kenya and China have long cooperated on large infrastructure projects. A Chinese-funded railway between Nairobi and Mombasa, which opened earlier this year, is the latest example. Since 2000, China has offered Kenya US$6.8 billion in loans for infrastructure projects, compared with US$1.7 billion for Zimbabwe. Due to loan conditions that often include a requirement to hire Chinese employees, Kenya had more than 7,400 at the end of 2015, while Zimbabwe had just over 950.

However, in the competition for Chinese largesse, Kenya’s advantage over Zimbabwe ends there. Cumulative Chinese foreign direct investment since 2003 has reached nearly US$7 billion in Zimbabwe, compared with US$3.9 billion for Kenya. Year on year, more Chinese money is flowing to Zimbabwe as well.

Moreover, Zimbabwe’s trade balance with China is far superior to Kenya’s. In 2015, Kenya’s exports to China totaled US$99 million, while it imported from China a staggering 60 times that amount. Even taking into account imports of materials tied to Chinese-built infrastructure, this is an exceptionally wide bilateral deficit.

Zimbabwe, on the other hand, despite its slow growth rate, exported US$766 million worth of goods to China in 2015, and imported US$546 million. Most surprisingly, Zimbabwe’s exports were not restricted to minerals and metals, as one might assume, but also included tobacco and cotton, products that are relatively more labor-intensive, meaning more job creation at home. While Zimbabwe has about 50 fewer registered Chinese companies than Kenya, Kenya’s economy is about 4.5 times the size of Zimbabwe’s, clearly implying that those firms that are operating there contribute more to the country’s economy.

How has Zimbabwe achieved what looks like, at least from a numerical perspective, a more productive relationship with China than Kenya has?

Few beyond Mugabe and his close colleagues, including new Zimbabwean President Emmerson Mnangagwa, know for sure. One way to make an educated guess is to compare both countries’ history of bilateral engagement with China.

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