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Rising China and Africa's development: oil
Rising China and Africa's development: oil

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5 Summary of Session 5

What the rise of China as a global economic superpower means for wider development across the globe has been an increasingly hot topic over the past few decades. This course has sought to explore this question by looking at the implications of China’s pursuit of oil on the growth of Africa’s oil producing countries. Session 1 set the scene for China’s expansion into African economies. It detailed the history of the ‘going out’ policy in response to domestic demand outstripping China’s natural resource capacity to ensure a stable supply, as well as the evolution of Chinese oil companies. The course drew attention to how China’s activity in Africa is often popularly presented using simple narratives that focus on exploitation – that the Chinese are extractive, caring little about their impact; are more willing to deal with dubious regimes and; are less concerned with adhering to ethics and standards protecting human rights or environment safeguards.

What you have hopefully learned over the course of the five sessions is that the story of China’s investment in oil, and how oil rents translate into development outcomes for Africa, are far more complex and can differ dependent on a range of factors specific to each African country.

Session 2 considered the importance of politics in deal brokering and showed how African governments, far from being powerless, can exercise agency to affect investment – illustrated using the string of failed deals with Nigeria.

Session 3 explored the issue of ‘localisation’, which looks to ensure oil rents go directly to developmental investment using local content legislation that requires oil companies to employ and build capacity in domestic firms. Ghana’s emerging oil sector was a lesson illustrating that African countries can have progressive laws to promote development but that these can be meaningless without governmental will to implement and enforce.

In Session 4 you turned to Sudan where China began its journey on the continent in the oil sector and, so, has the longest history of engagement. Over the course of almost three decades, Chinese oil companies have had to navigate a sea of geopolitical and domestic political problems. A barrage of international condemnation at collusion with a genocidal regime, intertwined with a brutal civil war that ended in the secession of the south and required renegotiating oil operations in a volatile warzone. Over this time, you considered how China’s oil companies have changed strategy as a result of these experiences, which are filtering out to their wider approach across Africa. You also saw how through partnerships, such as joint ventures, Chinese oil companies have been learning from western oil companies’ practices and operations which calls into question whether China is indeed doing things differently. The interactive game in this week hopefully gave you more insight into the pressures and trade-offs facing African government in managing oil wealth. While new revenue is welcome it is far from easy deciding how to spend it in the national interest.