China boosts economic ties with Ghana

Tags: , , , , , , , , , , ,

CHINA IS PREPARING to extend economic cooperation with Ghana, according to a statement made by Sun Baohong, Chinese Ambassador to Ghana, last Thursday, against a background where China has doubled its trade with Africa over the past four years, hitting US$222 billion last year (2014).

Sun BaoHong speaks from Chinese embassy in Accra, Ghana

Chinese Ambassador to Ghana Sun Baohong speaks from Chinese embassy in Accra, April 2015

In a speech made during the final round of the 2015 ENACTUS (Students In Free Enterprise) national competitions in Ghana’s capital Accra, Ambassador Sun highlighted the importance of China’s diplomatic and financial relationship with Ghana. Sun hopes to create a bilateral agreement with Ghana in an effort to solidify China’s position as Ghana’s number one trading partner while simultaneously providing aid to Ghana’s development efforts.

Last year mutual trade between Ghana and China reached US$5.6 billion, yet Sun hopes the two countries can achieve even more in the future. “Ghana is endowed with a highly open market, well educated workforce, geographic advantage, and a relatively good foundation for development,” the ambassador stated in her speech. Sun also emphasized that a Chinese approach to industrial development could help Ghana transform its economy towards industrialization, calling for more collaboration in manufacturing and trade between the two nations.

China and Ghana have maintained amicable diplomatic relations since 1960, when former Ghana President Nkhrumah lobbied for the PRC’s reinstatement in the UN. Ghana also supported China during the Sino-Indian War in 1962. In exchange for diplomatic support, China has invested heavily in Ghanian industries and infrastructure. Starting from 1964 to 1970, China has invested a total of US$43.5 million for development in Ghana. In 2007, the Chinese government granted a US$66 million loan to expand and upgrade Ghana’s telecommunications network. Recently, China’s Exim Bank (Export and Import Bank) granted a US $562 million loan to Ghana for the construction of the Bui hydro-electric dam and a US $6 billion concessionary loan to extend Ghana’s railway network. Ghana is also a large exporter of students to China. Statistics indicate that around 3,400 students from Ghana are currently pursuing higher education in China - the largest number of all African countries.

President of Ghana John Dramani Mahama (center) and Former Chinese Ambassador to Ghana Gong Jianzhong (4th to left) press power switch on Bui Hydropower Station in Ghana on May 3, 2013

President of Ghana John Dramani Mahama (centre) and former Chinese Ambassador to Ghana Gong Jianzhong (4th from left) press power switch on Bui Hydropower Station in Ghana on 3 May 2013

Although Ambassador Sun states that strengthening economic partnership with Ghana will result in mutual benefit for both countries, critics are skeptical. China’s growing interest in Ghana also extends to the entire African continent and has resulted in a large influx of capital, as well as merchants, labourers, and cheap consumer goods. Multi-billion dollar investments in developments in Africa’s infrastructure are in part related to the continent’s vast oil and mineral resources and transforming the way in which Africans are conducting business with the international community.

The United States has responded unfavourably to China’s large investment in Africa. On his most recent visit to the African continent, President Obama stated that China has been “able to funnel an awful lot of money into Africa, basically in exchange for raw materials that are being extracted from Africa.” The President went on to highlight the lack of jobs Chinese investment has created for Africans and the PRC’s preference for hiring Chinese workers over African workers. “Economic relationships can’t simply be about building countries’ infrastructure with foreign labour or extracting Africa’s natural resources,” Obama said. “Real economic partnerships have to be a good deal for Africa. They have to create jobs and capacity for Africans.”

Despite Obama’s appeal to African workers, China continues to outrun the US in economic interaction with Africa. While trade between the US and Africa increased to a high of $142 billion in 2008, it has since declined to US$73 billion in 2014 and continues to fall. By contrast, China has doubled its trade with Africa in four years’ time, hitting US$222 billion last year.

Leave a Comment

Return to Top ▲Return to Top ▲