Thursday, December 24, 2009

China gives developed countries sleepless nights.

By the close of 2006 China had investment about $50 billion into Africa, creating desperately needed growth in the area of infrastructure and employments. The current figure is said to have shot up three years down the line, making China the third largest investor into Africa in less than two decades.

Especially has become a major beneficiary of Chinese investments into the country by way of remarkable growth in the area of infrastructure.

Countries like Sudan, Zambia, Ghana South Africa and Nigeria are beneficiaries’ of huge Chinese investments running into billions of dollars. In Sudan for example, the country is deeply involved in the oil exploration business and despite calls for China to limit her investments in the largely Arabic speaking country, that have not gone far enough.

China’s policy of ‘non-interference’ in the domestic issue of countries where they have investments have paved the way for them to penetrate into markets where they are having huge slice of not only the markets but natural resources.

As a result it’s far easy for the Chinese to shut their mouths over allegations of human rights abuses said to be meted out to the people of Darfur by Khartoum.

After all China’s own human rights records are very dodgy but that means very little to African countries whose economic standings are in distress and would not shy away from opening their doors to them (China)

Especially the United States and most European countries who have continuously had an unfettered access to the rural materials of almost every African country are worried about such mass penetration of the Chinese, and have urged caution.

Ghana is one of the loyal followers of both the United States and most of EU countries who continue to pump millions of dollars into the economy-but still find it convenient to engage the Chinese partly because of the flexibility involved in the disbursement of either grants or loan facilities for development.

Apart from their involvement in the road construction sector, the Chinese are also involved in the Bui Dam project, which is expected to end Ghana’s energy worries once it comes upstream, the building and subsequent refurbishments of the country’s stadia used for the 2008 African Nations Cup here in Ghana.
There are more millions of Chinese investments from every sector of their economy coming to Africa, as exemplified in what is regarded as a historic summit when China played host to forty-eight African leaders at Beijing in November, 2007 which looked at ways by which current engagement would be beneficial to all parties.

Though worries were expressed by some observers and analysts that China was creating a platform for some African dictators on the continent, the same critics accepted that there are more fine African leaders who have emerged over the years and are giving democracy a good tuning in their respective countries.

Since 1993 up until now for example, Ghana has taken the path of democratic culture to the extent that power has been peacefully handed out to one government to the other without any bloodshed.

Arguably one of the most difficult elections since 1993 was last year when the then opposition candidate John Mills defeated the ruling party’s Nana Akufo-Addo by a whisker in a fiercely contested elections that spanned three rounds, cementing Ghana’s democratic credentials.

Though such fine democratic culture might not matter much to China because of its own policy of ‘non-interference’ in the domestic affairs of countries where they have investments, which certainly put them in a good light.

However people are worried African countries have opened up their space to the Chinese without them tabling any meaningful proposal that could ensure the current co-operation become a ‘win-win’ situation, rather than the current perceived exploitation of the natural resources of individual African countries.

Senegalese journalist Adama Gaye, author of the book China-Africa: The Dragon and the Ostrich, in debate as to whether Chinese investment is good for Africa, was emphatic China are only interested in milking out the continent’s resources and will only leave them home and dry once they get what they want.

“Once its objectives are attained, it may just drop Africa as it did just two decades ago, when it had another agenda, forgetting about the internationalist agenda it was promoting before.”

“So far, China’s help has not reversed the unequal terms of trade that attracted wide criticisms against Western nations. The early colonizers came to Africa with alcohol and useless gifts to lure the locals. Is not China doing the same with the help of greedy leaders?”

According to Mr. Gaye: “China’s claim to "help" Africa lacks credibility in the face of the way it treats hundreds of millions of its own people and vast regions that are poorer than Africa,” adding ‘China is only involved in infrastructural and industrial development in Africa for one reason: Such "sacrifices" serve its own national interests.

However Mr. Gaye’s position was contrasted by Deborah Brautigam of American University, author of the book Chinese Aid and African Development: Exporting Green Revolution, who argued that “China has also been proactive on Africa’s debt burden. They regularly cancel the loans of African countries, loans that were usually granted at zero interest.”

“They do this without the long dance of negotiations and questionable conditions required by the World Bank and the International Monetary Fund.”

According to her such stance taken by China has rippled some feathers because such multinationals have seen their “leverage is weakened.

Abraham Koomson, the heads an association of group of textile manufacturers, has never hidden his disdain for the current practice where Chinese products have been allowed to flood the market-therefore throwing out most of his colleagues out of business.

Leticia Osafo-Addo, Chief Executive Officer of the food processing company Samba Foods based in Tema, once told the dailyEXPRESS the importation of cheap Chinese productions into the country continue to shut down most locally owned businesses.

Mrs. Osafo-Addo who is the Vice President of the Association of Ghana Industries (AGI) responsible for the SME’s sector, was emphatic such practice if not addressed by government will collapse a lot more businesses therefore creating mass unemployment.

Prior to assuming office President Mills gave indication the NDC administration will ensure the trend is reverse, one of the many promises he made to officials of the AGI when he met them.

The Trade Union Congress last week Thursday was emphatic Ghana ought to access her own engagement with China in order to ensure the current trade agreements benefits the two parties.

At the launch of the a report on Chinese Investments in Africa which was a research conducted by the Africa Labour Research Network (ALRN), a network of trade union researchers who research into labour issues in Africa, Yaw Baah, Deputy Secretary-General of Ghana Trades Union Congress (GTUC), reiterated calls by others for the Ghanaian government to take a second look at its own engagement with the China.

"While China imported raw materials and natural resources, Africa imported manufactured goods which did not make the situation a win-win for Africa,” was quoted to have said.

Dr. Baah said it was important for African governments to fashion out a policy of trade with China with defined criteria so they don’t get cheated at the end, adding that "China has a clear policy to engage Africa but Africa's approach to China still remains largely ad-hoc.

One of the criticisms also leveled against the Chinese is their disdain towards Ghanaian workers but an official from the Chinese embassy in Accra, Hu Yu Jie, blamed the situation on the language barrier and

Wednesday, December 23, 2009

Illusive prosperity despite cocoa bonanza

Andrews Adam, 68, runs his hands through cocoa beans dried on a wooden mat, turning them so sunshine could settle through the rest. Andrew is one of the many cocoa farmers in a small village called Kyensindaahun in Enchi- Western Region with a population deeply embedded in most of the cocoa forests.

He has six children with his ex-wife. He smells of alcohol and has tagged a piece of cigarette at the back of his left ear.

Contrary to perception that cocoa farmers are very wealthy, Mr. Adam’s life doesn’t portray that. He manages three different cocoa farms, one of the largest in the village. His personal life story is very much of a memoir stylistically weaved in a collection of feature stories. Though his mind is sharp and speaks audibly enough for one to comprehend, his words were most of the times muffled especially because of the intake of alcohol.

“I have been a cocoa farmer all my life,” he said. “My father was a millet farmer up in the northern part of Ghana but I learnt the trade from my late uncle.”

The said uncle died when Adam was barely in his thirties but was able to take over the business because “I have been exposed enough to the basic skills involved in farming.”

Though he’s been living in this tiny village for several decades, he’s unable to recall the exact date and doesn’t have much to show for the cocoa farms he owns. He lives in a shack-a small single room constructed with clay and the top covered with dried palm fronds as roofing. He has no electricity or portable drinking water.

The main source of water supply is a stream flowing about 600metres from his hamlet which also serves as a swimming spot for most of the young children in the villages.

“All of us here are cocoa farmers but our lives are a contradiction to how much money cocoa should give us.”

Ghana is one of the leading producers of cocoa with production levels said to rake in millions of dollars by way of foreign exchange. Perhaps second to Cote D’ivoire in terms of quality and pricing, the country’s cocoa has always been in high demand and almost on a daily basis, tons of raw cocoa beans are shipped across the two main ports of Ghana to several parts of the world, including Europe and America.

Currently government pays the farmers GHS138 per bag of raw beans which is a slight improvement from the previous GHS120, but farmers like Adams believe the money is way inadequate.
Kwabena Duffour, Finance and Economic Planning Minister, told parliament late last month that government expects that a production target of 1,000,000 tons a year will be met. Government also announced in October that it has set aside a seed money of GHS15million for the establishment of the Cocoa Farmers Social Security Fund.

Again, the Ghana COCOBOD is reported by government to have paid outstanding bonuses totaling GHS21.2 million for the 2008/2009 cocoa season. However farmers like Andrews Adam say they are running at serious deficits.

“The amount of money some of us invest in the business is not what we get from it,” he said pointing his right hand to a warehouse where they store their bags of cocoa.

“We employ the services of farm hands and you can’t tell them you made a loss so they should forget about being paid. They’ll need their monies at the end of work.”

Then there is also the issue of failed projections which Adam and some few farmers who spoke to the dailyEXPRESS said has often compelled them to borrow but end up running into debts.

“So why won’t some of our people smuggle the beans to Cote D’ivoire and sell them over there at a reasonable price.”

Most farmers in cocoa growing villages and towns in Ghana are often reported to be smuggling their beans to neighbouring Cote D’ivoire where the pricing is reported to be better than what is paid most of the farmers in Ghana. However some farmers told me it’s a risky venture to pursue since one is likely to be punished by the government if caught.

"Certainly you can’t eat your beans like that so you just give them away no matter the reservations you have against the pricing,” a 24 year old cocoa Purchasing Clerk in a village called Motoso said.
Mr. Adam’s neighbour is also a cocoa farmer. He is called Christian Odikro, 42, married with four children. He says life is very hard for cocoa farmers in this part of town.

Fresh from the farm and holding a basket Mr. Odikro was all smiles when I approached him for an interview. He jovially turns around the beans on the wooden mat with the help of his friend Adam, whilst responding to the questions I put to him.

He tells the dailyEXPRESS he pays about GHS300 to a year to educate his three children. For most wealthy people in big cities that money is pittance, but for Christian and his family that is quite a lot of money.

“I managed to harvest only ten bags this past season which is woefully in inadequate,” he told me as his wife looks on. “I’m indebted to several people but the money to pay them is not there.”

Though thousands of bags of cocoa beans are taken out of the villages almost on a daily basis and sent to the shipping ports and subsequently sent abroad, the road networks leading to the villages remain untarred, creating clouds of dust anytime vehicles pass through them. Portions of the dust either settle on the green leaves or are inhaled by the people in the communities, likely to create respiratory infection in most of them.

A nurse at the Presbyterian Health Service which is offering services to the people in neigbouring communities says most of the patients suffer from severe respiratory problems. The health centre is however 5 miles of walking from Kyensindaahun and Christian Odikro tells me inhabitants walk on foot anytime they need medical support.

“We are used to people dying even before we contemplate taking them to the hospital because they’ll never make it.”

Government has meanwhile announced a plan to construct roads leading to the cocoa growing and farming areas of the country. When the dailyEXPRESS informed them of government’s plans, they responded with appreciation but said they’ve heard of such plans in the past and are hopeful that President John Mills will not be like the others.