As the home to 34 of the world’s 50 least-developed countries, Africa is the poorest and least-developed continent on the planet. It’s 11.7 million square miles of desert and jungle, with little in between.

Africa is malnourished, politically impotent, overrun with disease, and teeming with warlords, so it’s no surprise the typical life expectancy is 20%-30% below the global average.

Despite such a daunting outlook, Africa will be the most hotly contested battleground for the two of the world’s most influential powers over the next 50-100 years.

That’s because Africa has become a key economic priority for both India and China – the two Asian powerhouses in the midst of major financial and industrial reformations.

China and India have been home to two of the world’s fastest-growing economies over the past several years, and that momentum is expected to carry through the rest of this year, as well. India’s economy is expected to expand by as much as 9.5% in the current (2008/2009) fiscal year. And China’s economy already has expanded by 10.6% in the first quarter of 2008, despite complications stemming from the U.S. credit crunch, the Chinese New Year, and the worst ice storm the country had seen in decades.

In addition to booming economies, China and India have the world’s two largest populations. The combined population of China and India (Chindia) is approximately 2.4 billion people. And it won’t be long before those 2.4 billion people evolve into the largest consumer class the world has ever known, making Africa – with its vast resources and close proximity – an ideal trading partner.

As a leading exporter of gold, silver, cotton, cocoa, copper and aluminum ore, and oil, Africa is an invaluable ally to emerging economies that will require vast amounts of raw material to sustain growth.

The bottom line: China and India will be vying for Africa’s favor in the years ahead.

Of course, China already has a head start.

“The Chinese Are Everywhere”

In 2006, Beijing hosted the China-Africa Cooperation Forum – an event attended by more than 40 African heads of state. At the forum, China unveiled $9 billion in preferential loans, export credits, and trade incentives – all part of a strategic plan to achieve a preferential status with key African nations.

The meeting was more than a mere publicity stunt to play up Beijing’s humanitarian efforts. It was a symbolic acknowledgment of growing cooperation between the regions.

Trade between Africa and China has grown 40% a year since 2001. In just seven years, trade volume grew from $4.5 billion to as much as $55 billion, meaning that China has emerged as Africa’s third-largest trading partner after the United States and France.

China also has invested tens of billions of dollars directly into African-infrastructure and social-development projects. Some examples:

• In Freetown, the capital of Sierra Leone, office blocks, military headquarters and a refurbished stadium are all the work of planners from Beijing.
• In Uganda, the new State House was built with Chinese money.
• In the city of Rwanda, Chinese companies built 80% of all new roads.
• And in Nigeria, China’s Civil Engineering Construction Corp. is building an $8.3 billion railroad linking Lagos and Kano.

While in Zambia, an “economic partnership zone” that will attract $800 million in investment was promised by the Chinese president on a recent state visit. Even Zimbabwe’s international pariah, Robert Mugabe, has declared: “We have turned East, where the sun rises, and given our backs to the West” – perhaps grateful for Chinese assistance in cultivating crops on land seized from white farmers.

In short, as Granta magazine put it, “the Chinese are everywhere.”

Chinese involvement also has received a slightly warmer welcome than efforts by Western nations. Where western powers have attempted to use aid and investment as bargaining chips to achieve certain political or social reforms, China employs a less-conditional “no-strings-attached” attitude that many African leaders find appealing.

“With the Chinese, we don’t feel any interference in our traditions or politics or beliefs,” said Awad al-Jaz, Sudan’s energy minister.

Most recently, China agreed to take on large-scale infrastructure projects in the Democratic Republic of Congo, in exchange for copper and cobalt reserves. To facilitate the exchange, Congolese and Chinese state-owned enterprises (SOEs) set up a joint venture known as Socomin. The mining company will invest $3 billion, mostly in new mining projects. The profits of Socomin will then be used to repay these mining investments, and also to find Chinese investment in other big infrastructure projects.

Under the agreement, Socomin will raise about ten million metric tons of copper to pay off $12 billion in total investments over a 15-year period.
And last year, the state-owned Industrial and Commercial Bank of China Ltd. took a 20% stake in South Africa’s Standard Bank Group Ltd. for $5.4 billion. Standard Bank is Africa’s largest lender, servicing 18 sub-Saharan countries. And now, China’s government will get a piece of every new loan, every ATM fee, every credit card taken from Standard Bank.

India Follows China’s Path Into Africa

With all China has achieved in the past few years, India is beginning to wake up to the potential benefits of a strong relationship with African nations, many of which are enjoying their fastest growth rates in 30 years.

The first-ever India-Africa summit concluded last week, having laid the groundwork for future cooperation between the regions. The two-day summit – attended by eight heads of African states and delegations from 14 African countries – culminated with the signing of the Delhi Declaration and the Africa-India Framework for Cooperation, two documents designed to build political and financial synergy. The accords stressed cooperation in agriculture, food security, technology, trade, energy and education.

At the summit, Indian Prime Minister Manmohan Singh announced duty-free access to Indian markets for the world’s 50 least-developed countries, 34 of which are located in Africa. Singh also said his nation would more than double India’s credit line to Africa, from $2.15 billion in 2003-2004 to $5.4 billion in 2008-2009, and boost grants and aid to the continent to $500 million in the next five to six years.

“It sounds like something Beijing did a few years ago,” Philip Aves, an economist at South Africa’s Institute of International Affairs, told the Financial Times. “It’s a mini-China approach to dealing with Africa. It has all the same elements, except on a much smaller scale.”

But Prime Minister Singh was careful to point out that, while China has clearly established economic and political inroads in the region, this is not a competition.

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