The Impact of China and India on Sub-Saharan Africa

Opportunities, Challenges and Policies

image of The Impact of China and India on Sub-Saharan Africa
China and India’s demand for oil and other raw materials to fuel their recent economic development has led to significant trading partnerships with Africa, especially sub-Saharan Africa (SSA). China in particular is becoming a major player on the continent, not only in exports but also in terms of investment and aid flows to SSA countries.

Through detailed country-level analysis, this study offers unique contributions to the understanding of the relationship between China, India and SSA. The authors review and assess the economic impacts, identify the challenges involved and provide recommendations to assist policy-makers enhance the ability of SSA countries, individually and regionally, to derive benefits and to take advantage of new opportunities.

For academics, policy-makers and anyone interested in understanding the detailed dynamics that underpin the promises and challenges associated with South–South development.



Future Prospects and Policy Options

As the previous sections have indicated, the growth of China and India has affected SSA through various linkages including trade, foreign direct investment (FDI), aid and debt relief, and migration of Chinese and Indian workers. The impacts are both complementary and competitive, and direct and indirect. The growth of these two countries stimulated demand for raw materials, oil and other intermediate inputs for their domestic markets and export-oriented industries. Because of their relative economic mass, that demand has translated into a general global rise in input prices of the affected commodities. Trade is therefore the principal channel through which the growth of China and India has had an impact on the global economy in general and SSA in particular. Trade opportunities have also influenced Chinese FDI in SSA to secure supplies of resource inputs.


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