A few days ago, I was scanning the Internet for financial and investment news on Africa, and came across China's National Development and Reform Commission's (NDRC) website. While skimming through different documents on the site, I saw a policy document titled "Decision of the State Council on Reform of the Investment System.”

According to the document, China’s Ministry of Commerce (MOFCOM) “is responsible for approving the establishment of, and changes to, foreign-funded enterprises involving nationwide limits, investment restrictions, quotas or licenses, major changes (capital increases or decreases, share transfer and mergers) that are specially regulated by the contracts, charters and laws that govern large foreign-funded projects".

This document is not only a policy document on deepening reform of the current investment system in China, it is also a set of  detailed policy guidelines that will make it extremely difficult for foreign companies to enter sectors such as mining, agriculture, forestry and water conservation, high technology, equipment manufacturing, energy, and a host of other sectors.  What China has accomplished with this new policy is to use foreign direct investment to promote, restrict, and outright ban foreign ownership in some sectors. In essence, China is attempting to be more aggressive and proactive in planning and controlling foreign direct investment.  China wants to use foreign direct investment to develop less developed sectors, limit foreign control of valuable sectors and certain resources, and balance development throughout the nation. 

Shortly after reading the document, I heard a report on the BBC discussing why European companies are reluctant about investing in Africa's banking sector or partnering up with African companies to expand the capacity of these companies. The analyst reporting the story speculated that European firms and companies are reluctant to invest in these two sectors, and sectors receiving low investment due to the lack of transparency and rampant corruption in many African countries. Of course my pan-African, black conscious, analytical mind begin immediately processing China’s policy document, and the report I heard on BBC.  My first thought was, what can Africans learn from China's policy on foreign direct investment, and why European companies are reluctant about investing in sectors not beneficial to them?

According to the European Investment Bank (EIB), over a quarter of the bank's investments in sub-Saharan Africa are in the energy, oil and gas sectors.  I find it interesting that European companies don't seem to be too concerned about corruption and transparency when it comes to extracting natural resources from the continent or taking advantage of war-torn nations by signing bogus contracts that are economically detrimental to the people of these nations. They don't seem to be too concerned when extracting oil from the volatile Niger Delta or other natural resources from the Congo, Rwanda, or Sierra Leone. Corruption only becomes an issue when they are told to invest in sectors that will allow the continent to create a manufacturing base and increase its financial and economic capacity.  

Like it or not, there still exists a paternalistic and colonial mentality when it comes to European companies and European countries trading with Africa; and it is reflected in how foreign direct investment is carried out from Liberia, to Cameroon, Nigeria, to Kenya.  Often times these companies have made all the important decisions without earnestly consulting with many of the African governments they plan on doing business with, but do a very good job of putting on a dog and pony show to give the leaders and citizens of these countries the illusion that they are really in control of trade or investment projects, when in reality these companies and their agents are the real architects of the deals and projects.

Despite gaining political independence in the 1950s and '60s, the economies of most of the former colonies remain dominated by big Western corporations, which utilized their monopolistic control of advanced technologies to extract above-average profits out of these countries, under the guise of foreign direct investment.

 From the beginning of capitalist Europe domination of so-called trade with the continent, the relationship was one that insured wealth transfer from Africa to Europe and European companies.  This lopsided relationship allowed Europe to super impose itself commercially on the continent through the use of superior technology to extract precious human and natural resources for development and economic growth, while the continent languished in a state of economic and technological retardation.  The method, strategy and production of trade was planned and controlled by Europeans to the detriment of Africa, creating a cycle of dependency and economic underdevelopment.

At present, Africa has a competitive advantage on resources that are desired by “developed” and emerging economies, and as nations like India, U.S and China’s appetite for natural resources continues to grow, Africa’s role as a world supplier of resources will become even more important.

As I have written before in previous articles, African leaders can not sit back passively and allow the “second scramble for Africa” to make non-African companies and countries prosperous while a majority of the continent’s people live in chronic poverty.  We can not allow China or any other nation or corporation to only come to Africa to extract raw materials, manufacture it at home or abroad and sell it back to us.

Instead of giving blanket approval to every Tom, Dick and Harry who comes to us with an investment proposal, we need to follow China's footsteps in controlling Foreign Direct Investment (FDI), by creating strategic policy guidelines regarding all large-scale foreign investment/projects. We should no longer sit back passively and allow foreigners to dictate to us how our economies and various economic sectors should be developed. Africa is the hottest commodity right now due to its abundant resources. It is because of these resources our people were murdered, raped, dehumanized, exploited, and subjugated.

We need to be more aggressive and proactive in planning, promoting, controlling, and restricting, foreign direct investment for the benefit of our people.  We need to be more adamant in calling on the Chinese and others that are interested in investment in Africa to invest more in building up Africa’s manufacturing and technological capabilities.  We have what others desperately want, so as long as our demands are reasonable in terms of creating a win-win economic environment for all parties involved. I doubt we should have problems getting our demands met. 

Most of the continent's industries are currently dominated by foreign direct investment (FDI) from US and European corporations, and now China, and to a lesser extent the Lebanese. Africa was and still is a plantation and playground for corporate global world bankers and thieves.

 There is potential danger that China’s trade relationship with Africa is becoming similar to what existed in the past between Africa and its former colonial masters.

Nyankor Matthew is a municipal bond/financial analyst. She lives in Chicago, Illinois, and can be reached at Nyankorm@gmail.com.