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.



Investment and Aid Relationships

Whereas reasonably good data are available to demonstrate the importance of China and India in terms of trade, data on capital flows are more limited. In parallel with its rise as a trading partner – largely because the trade opportunities create investment opportunities – aid and investment flows from China to SSA have increased significantly in recent years. There is sufficient information on foreign direct investment (FDI) to show the increasing importance of China, and to a lesser extent India, in Africa (see UNCTAD, 2010, Chapter 4). However, consolidated data on ‘aid to Africa’ do not exist; concessional flows are often closely linked to trade or investment so that levels of aid are hard to determine. Nevertheless, capital flows of various forms to Africa are increasing.


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