Image: Reuters Berita 24 English - As workers in an orchard owned by the Kenyan company Kakuzi pick avocados from the tops of trees, the co...
 |
| Image: Reuters |
Berita 24 English - As workers in an orchard owned by the Kenyan company Kakuzi pick avocados from the tops of trees, the company's managing director, Chris Flowers, loves the idea that some of them might soon go to China, which is the most important emerging consumer market.
Kenya made a deal with China to export fresh avocados in January after years of lobbying for market access. The deal took advantage of Beijing's increased focus on trade with African countries to help close huge trade deficits.
Six months later, none of the shipments have left, according to the Kenya Avocado Society, the Kenya Plant Health Inspectorate, and Kakuzi.
Even though 10 avocado exporters in Kenya have passed inspections, China now wants to do its own audits. Based on what other African fruit exporters have done in the past, it could take a decade to get the go-ahead.
Stephen Karingi, who is in charge of trade at the United Nations Economic Commission for Africa, said, "You can have a market, but if you can't meet the standards, you can't use it."
Reuters talked to nine African officials and business owners who said that Chinese red tape and a reluctance to make big trade deals were hurting Beijing's plan to increase imports from Africa.
Increasing agricultural exports is one of the few ways that many African countries can rebalance their trade with China and earn the hard currency they need to pay off their huge debts, which are mostly owed to Beijing.
Take Kenya. Its trade deficit with China is about $6.5 billion a year, and it owes China about $8 billion. It needs almost $631 million just to pay off that debt this year, which is almost three times more than it will send to China in exports in 2021.
Many African countries now say they can't take out any more loans from China and need to increase their exports to China. China changed its plan in November because it knew it had to fix the imbalances or at least stop them from getting worse.
At a summit between China and Africa, which Beijing usually uses to announce huge loans, President Xi Jinping announced a number of plans to increase China's imports from Africa to $300 billion over the next three years and $300 billion a year by 2035.
Experts say that, in theory, agriculture is one of the most promising paths. China is the biggest importer of food in the world, and the agricultural sector in Africa is the main source of jobs and economic activity.
Also, 60% of the world's arable land that is not being used is in Africa, so there is a lot of room for growth.
Mei Xinyu of the Chinese Academy of International Trade and Economic Cooperation, a think tank under China's Ministry of Commerce, said, "It's a good choice for both China and Africa."
BALANCES OF TRADE
China has been giving Africa billions of dollars in loans for decades so that they can build railroads, power plants, and highways. This has helped China build stronger ties with Africa while getting minerals and oil from the continent.
This has helped trade between China and Africa grow by 24 times in the last 20 years. Last year, two-way trade reached a record high of $254 billion, despite the chaos of the global pandemic.
But China only bought $106 billion worth of goods from Africa in 2021, even though it sent $148 billion worth of goods there. Five resource-rich countries made up $75 billion of that total: Angola, Congo Republic, Democratic Republic of Congo, South Africa, and Zambia.
Nigeria, which has the most people in Africa, bought $23 billion worth of goods from China in 2021. This was more than eight times as much as Nigeria sold to China.
In Uganda, where about 80% of its exports are agricultural goods like coffee, tea, and cotton, the difference is even more stark. Last year, it sent $44 million worth of goods to China, but it bought more than $1 billion worth of things there.
More than three-quarters of African countries have trade deficits with Beijing, according to data from Chinese customs.
Wu Peng, who is in charge of the Department of African Affairs in the Chinese Foreign Ministry, said that these imbalances were not done on purpose.
"China has always worked to promote the balanced growth of trade between China and Africa," he told Reuters.
Hannah Ryder, the founder of Development Reimagined, an African-owned development consulting firm based in Beijing, said that African leaders have been pushing for action on trade for years.
In the meantime, the pandemic made them pay more attention to their debt. About 60% of low-income countries, mostly in Africa, are either having trouble paying their debts or are at high risk of doing so. At the same time, debt service costs are at their highest level in 20 years.
"There was pressure on African countries not to take on any more loans," Ryder said. "The Chinese think they can make a difference in trade."
GREEN LANES
When it came to food and farming, China imported $13 billion worth of goods 20 years ago. By 2020, they had jumped to $161 billion, but only 2.6% of that came from Africa.
Wu, who is in charge of China's relations with Africa, said that using this growth would lead to more jobs in Africa and help the continent become more industrialised.
"China took action to address the major concerns of African countries about trade cooperation with China," he said.
President Xi's plan calls for centralised clearance zones, or "Green Lanes," to speed up inspections of agricultural goods from Africa, more zero-tariff access, and $10 billion in trade finance for Chinese companies that buy from the continent.
On paper, China's growing food needs give Africa a huge chance to use agricultural exports to earn foreign currency, said Lauren Johnston, visiting senior lecturer at the University of Adelaide's Institute of International Trade.
"The debt problem has made it clear," she said. "At first glance, it seems like a very smart investment."
But some countries, like Kenya, are having trouble taking advantage of the chances. It grows the most avocados in Africa and sent $154 million worth of them mostly to Europe last year.
Eric Were from the Kenya Plant Health Inspectorate Service (Kephis) said that they had to jump through a lot of hoops this year to clear 10 avocado companies to export to China.
"For the Chinese, we need to look at the orchard, the packinghouse, and the places where the fruit is fumigated," he said.
He said that Kakuzi, Kenya's biggest avocado grower, spent a month showing how it could track its products from the seeds to how the trees are cared for and how the avocados are picked, processed, and packed. Were said that in contrast, the European Union only checks at the point of exit.
Last month, the inspectorate said that Chinese officials had decided to do their own audits, which has not always been a good thing in Uganda, which is right next door.
Uganda's Commissioner for External Trade, Emmanuel Mutahunga, told Reuters, "When they come, they usually find that we are not doing well."
RED LINES
Tanzanian coffee farmers have also had a hard time making a name for themselves. In Namibia, it took nine years from the time a deal to export beef to China was signed until Chinese regulators were satisfied, allowing the first shipments to go out in 2019.
Wu said that China's planned projects would help African farmers get better at quarantine and food safety, but Mei and Johnston said it was unlikely that phytosanitary rules for African imports would be loosened.
"China and food security is the biggest red line," Johnston said.
Experts like Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, say that China is also missing out on other ways to speed up access.
He said that, like the EU, Beijing could make broad trade deals with African countries and regional groups.
Instead, China keeps making deals with other countries bilaterally, and even then, only on a few products at a time.
"The main point is that China should be a little more open to food exports from Africa," he said. "A lot of it will come down to how well each country can negotiate better deals."
South Africa's citrus industry was one of the first on the continent to start doing business in China. In 2004, South Africa signed its first agreement with Beijing. In 2021, it sent 162,000 pallets of fruit abroad, but it didn't get there overnight.
The head of the Citrus Growers Association of Southern Africa, Justin Chadwick, said that it has been a great market for SA citrus.
Still, Britain and the European Union, which have strict rules about food safety, are by far the biggest markets for South African citrus. Last year, they bought 44 percent of all citrus exported from South Africa.
"If you want to sell an agricultural product in China, you need a separate protocol for each one. On average, it takes about 10 years to finish the protocol for each product "Chadwick said. "China does this one product at a time, which is a shame."
