Voice of Liberty Africa: Africa in China’s League: Human Capital Development over Physical Infrastructures – by Ogunyemi Bukola
From little more than $10 billion in 2000 to $166.3 billion in 2011, trade between Africa and China has increased over the last decade with further increase expected over the next few decades. Africa, blessed with abundant natural resources, provides the ideal market for China to source for raw materials for its growing economy. Africa in turn sees China as a viable alternative trade partner to America and Europe. China, the largest exporter and second largest importer of goods in the world, is the world's second largest economy, and the world's fastest-growing major economy, with growth rates averaging 10% over the past 30 years. But this has not always been so.
In 1949, China was one of the poorest nations of the world and had very high levels of mortality, under-nutrition and illiteracy and life expectancy at birth was only 35 years. The Chinese economy in 1978 was generally pictured as "on the brink of disaster" due to its various imbalances as well as problems of low productivity growth and poor incentives. Major imbalances in national policies such as emphasis on capital construction at the neglect of education and workers efficiency caused high urban unemployment, widespread rural poverty and sluggish productivity growth.
Today, China has surpassed the United States to be the world's largest recipient of global foreign direct investment and boasts of world-class infrastructural facilities. This meteoric rise in development seems to be the attraction for African nations who are still battling with poverty and huge infrastructural deficits. They see China’s advancement in technology as an easy way out of their infrastructural woes, which many of them believe to be the bane of their underdevelopment. The $9 billion deal to swap minerals for infrastructure projects Congo signed with China in 2008 exemplifies this though pattern.
The mistake however is that China’s growth is not premised on its infrastructures, it is indeed the other way round. The growth that China is able to achieve has endowed the country with economic and financial resources that enabled the construction of these infrastructures. The Foreign Direct Investment China is able to attract is the result of the growth; it is not the reason for China's growth. The true success factor for China’s development is the huge investments made in human capital development much of which was made between the 1950s and the 1970s.
The world's largest hydropower project, the $22.5 billion Three Gorges Dam, designed, constructed and maintained by Chinese engineers, has the capacity to generate 22,500 MW of electricity. Nigeria on the other hand has spent over $30 billion since 1999 and is yet to generate up to 5000MW partly because of corruption but also due to lack of adequate human capital in that sector. A cursory look at Nigeria’s 2013 budget reveals that the total recurrent expenditure projected for the Office of the Secretary to the Government of the Federation (N46.6 billion) is more than the entire budget for Science and Technology (N31.8 billion). Also the total allocation for the Secretary’s office (N70.5 billion) is more than the capital allocation for Education (N60.1 billion). This perhaps explains, in part, why Nigeria has had to depend on China for the execution of its space program.
The importance of human capital development, and the role it played as the precursor to China’s economic development is summed up in Premier Zhao Ziyang’s 1987 speech. He said: "the revitalization of the economy and indeed the progress of the whole society all depend on improving the quality of the workforce and training large numbers of competent personnel. Education is of fundamental importance to the fulfillment of our great long-range mission. We must therefore continue to stress the strategic role of education and do a better job of tapping intellectual resources".
The growth in per capita incomes of most developed countries is partly due to the expansion of scientific and technical knowledge that raises the productivity of labour and other inputs in production. And the increasing reliance of industry on sophisticated knowledge greatly enhances the value of education, technical schooling, on-the-job training, and other human capital. Economic growth closely depends on the synergies between new knowledge and human capital, which is why large increases in education and training have accompanied major advances in technological knowledge in all countries that have achieved significant economic growth.
Gary S. Becker, a Professor of Economics and Sociology at the University of Chicago notes that: ‘The outstanding economic records of Japan, Taiwan, and other Asian economies in recent decades dramatically illustrate the importance of human capital to growth. Lacking natural resources, they import almost all their energy, for example, and facing discrimination against their exports by the West, these so-called Asian tigers grew rapidly by relying on a well-trained, educated, hardworking, and conscientious labor force that makes excellent use of modern technologies’.
African nations trading with China for infrastructural gains have lost the plot. For Africa to achieve the kind of growth that China has achieved, it has to invest more in its human capital base. Africa’s romance with China will end as a tragedy if we refuse to learn the most important lesson from them. We should seek to tap into their knowledge and replicate their model of development across the continent rather than going after financial crumbs of bread that made us sell out to European colonialists and later IMF imperialists and has brought us to this level of underdevelopment and desolation.
Africa is playing in China’s League, but Africa has refused to learn the golden rule of the game: human capital development over physical infrastructure.
– Ogunyemi Bukola is the Editor OMOJUWA.COM and a regular contributor to the Voice of Liberty Africa project.
