Africa is reaping the fruits of a new "Silk Road" to the fast-growing Asian
economies, notably through a sharp rise in trade and investments by China and
India, a new study by the World Bank has found.
According to the study, "Africa's Silk Road: China and India's New Economic
Frontier," 27 percent of African exports are sold in Asia, up from 14 percent in
2000 or three times the amount in 1990.
Europe, Africa's leading trade partner since the early independence days, has
lost ground with a 50 percent fall between 2000 and 2005 in the share of African
exports to European Union members, said a report of the study released here on
Approximately 47 percent of Africa's exports to Asia comprise oil and natural
gas, which represent 12 percent of Africa's overall exports to the world. The
leading non-oil mineral and metal products include gold, silver, platinum, iron,
aluminum, iron ore, copper, and pearls.
The study finds that existing Chinese and Indian investment in Africa is
concentrated on raw materials, notably in the mining and oil sectors.
However, the two Asian countries "are fast diversifying outside the natural
resources sector into the apparel, food processing, retail, fisheries,
commercial real estate, labor- intensive light manufacturing and the services
sector in ways that could help Africa move away from over-reliance on a few
export commodities which has left the continent so vulnerable to economic
shocks," said the report.
China and India's foreign direct investments in Africa, although more modest
than trade flows, are also growing very rapidly, the "Silk Road" study reveals,
drawing parallels with the Silk Road used by traders from 100 B.C.
"This new Silk Road presents a significant, and to date, rare opportunity to
accelerate Africa's growth, expand intra-African trade and hasten the
continent's integration into the global economy," said Harry Broadman, World
Bank's economic advisor in the African region and the author of the study
The study finds that in both Africa and Asia there are strong complementary
relationships between foreign direct investment (FDI) and trade.
"Chinese and Indian firms operating in Africa have been playing a significant
role in facilitating these linkages between FDI and trade on the African
continent," said the report.