The Trade Fair Fad – seeking alliances in the guise of making money

By James Hall

Analysis in brief: African nations are being wooed by the world’s major powers as alliance partners. Trade is the calling card, but make no mistake, the mission of Britain, China, the EU, Russia and the US is to line up allies to their own advantage.

Africa continues to be touted for its economic promise for tomorrow and yet has commodities, products and markets that foreign powers desire today. Indeed, due to Africa’s population growth, by 2050 a quarter of the world’s consumers will be African. However, much as with the case of commodities, investors want profits today. The combined economic output of all African countries is less than Italy’s, however, Africa has more than fifty times the diplomatic clout than Italy: 54 United Nations votes against Italy’s one. In the guise of increasing trade, foreign powers are seeking alliances for diplomatic advantage, or in the case of the US, to get African cooperation on security issues.

Economically, trade is a wholesome affair, suggesting mutual benefits, with different peoples coming together for shared prosperity and a means to bind countries together and banish war for the sake of commerce. While these positive attributes exist, trade can also be warfare by a different means. For Eastern and Western powers, trade with Africa represents more than locating a buyer for imports and a supplier of raw materials. Trade is the carrot inducing African nations to forge political alliances. African nations pay for trade opportunities with UN votes and other forms of diplomatic support and join foreign powers’ spheres of influence as they gauge which one of these memberships offers the best advantage.

Sub-Saharan Africa’s top five importers and exporters according to their share of the region’s total imports and exports.
Data Courtesy: World Integrated Trade Solution

The evolution of a trade fair from economic opportunities to alliance building

Trade fairs are integral to doing business in Africa. While not generally known to the public, these industry conventions are the annual get-togethers for networking that are well-prepared and well-attended. No medical product distributor or chain of chemist stores miss the annual International Pharmacy Exhibit in Algeria. The tourism industry flocks to South Africa’s yearly Durban Tourism Indaba. Dozens of other “must attend” events for their industries range from the Morocco International Yarn and Fabric Sourcing Show mounted each November, to the West Africa Plastics, Printing and Packaging Trade Show held in Accra every two years.

When Eastern and Western powers entered the trade fair scene, vying for influence in Africa by using trade as an allure, governments elevated participation above the business world and placed the focus on heads of states. Trade fairs became Trade Summits and trade links are touted at exhibition-style events held at venues styled after the old World’s Fair pavilions. These conventions were tied to overall relations between the host country and its African clients, and in one sense proved financially practical. Rather than rollout the red carpet repeatedly for a summit between a country’s president and his African counterpart, dozens of African heads of states could be wined and dined at the same time. For Africans, the lure was foreign investment. The host country ensured the cream of its local business community would be present to meet African delegations for the purpose of making business deals. Billions of dollars in investment pledges are the usual result of such summits. Meanwhile, the real work of the summit, as far as the host country is concerned – alliance-building, ensued in private heads of state talks where trade was less discussed (that is left for the lower officials accompanying their presidents) than UN votes and military treaties.

Boris Johnson’s vision of a “Global Britain” includes an emphasis on UK-Africa trade.
Image courtesy: Michael Hughes

Wining and dining an African leader and providing other perquisites may be all it takes to have an African country enter a foreign power’s sphere of influence. Britain, for example, has courted African partners by hosting African business and political leaders at Buckingham Palace during a UK-African Investors Summit in December 2019. This forming part of British Prime Minister Boris Johnson’s vision of a “Global Britain”. The resonance of that slogan, seeming to resurrect the old empire that colonized Africa, is unmistakable. France also held a heads of state summit aimed at greater Franco-African trade, and China has held three.

China’s cautionary stories from Eswatini and Kenya

The nexus where trade meets diplomacy, in essence, pledging allegiance to a foreign power, can be found in the direct manner in which the Peoples Republic of China (Beijing) (PRC) uses a carrot and stick approach with other countries to isolate the Republic of China (Taiwan) (ROC). The PRC regards the ROC as a breakaway province, and will not tolerate other nations that do not agree. For years, the PRC has used trade as a means to induce African countries to drop diplomatic relations with Taipei in preference to Beijing. The decades-long effort has succeeded, so that in 2020 only one African country, Eswatini, still recognizes the ROC.

At the latest of the three China-Africa Economic Trade Expos (CAETE), in June 2018, every single African country was represented among the 1 600 guests, several being heads of African states, save for Eswatini. The 53 other African countries were among the 3 500 exhibitors at an event that saw over 100 000 attendees. Prior to the expo, Beijing had stated its confidence that “all African countries will be with us at this Win-Win Cooperation for closer China-Africa economic partnership.” But it was not to be. Taiwan’s favours to the Swazi royal family trumped all other considerations for Mbabane. The PRC changed to strong-arm tactics in January 2020, with restrictions placed on visas, as well as curtailed Swazi business trips. Beijing announced its patience had come to an end.

Eswatini’s behaviour gave China an opportunity to demonstrate the stick side of the carrot and stick equation. Africa’s informal sector employs more Africans than formal sector businesses. Essential to informal traders’ livelihoods are the inexpensive clothing, electronics and other consumer goods that China manufacturers. So much so that traders travel from Africa to the PRC directly, in order to buy in bulk and cut out middle-man import charges. Denying Swazi traders access had a devastating impact on their businesses and sent a strong signal to all African nations about the consequences of not playing by Beijing-imposed rules.

Trading diplomatic independence for economic opportunities

The combining of trade with political goals is not yet a two-way street. South Africa has hosted very successful international investment summits in which billions of investment dollars were pledged. Though Pretoria did not ask nor reap any diplomatic advantages from foreigners seeking to do business in South Africa. The opposite is true when Asian and European powers host their investors summits. Still struggling to build their economies and having little diplomatic or military leverage on a global scale, Africa is truly the lesser partner in any trade partnership. It is a matter of ceding a degree of foreign policy independence – Eswatini is obliged to champion Taiwan’s membership in the United Nations, China’s partners are obliged to shun Taiwan – in exchange for economic opportunities. At this stage of Africa’s development, as African heads of state jet into trade summits to be given the red-carpet treatment, the best they can do is choose wisely which alliance offers the most advantage to their economies.

Key points

  • Africa views trade a means to build its economies; foreign powers see trade as leverage to induce alliance partners.
  • Many major world powers have used trade summits as diplomatic summits, inviting all African heads of states.
  • African countries have less leverage in trade negotiations and must balance economic and political interests.

The views expressed are the opinion of the author and do not necessarily reflect the position of In On Africa.