Africa seeks Europe-style trade bloc

Chinese investment has had a transformative effect on Ghana, says minister

Hanna Tetteh, Ghana's minister for trade and industry, says China is an important partner for Africa's development but not the most vital one.

She says while the relationship with the world's second-largest economy has been a key factor, it will be building ties with other African countries - and forming a European Union-style trading bloc - that will prove the essential long-term driver of economic growth.

"The China-Africa relationship is a very important one. There is no doubt about that. But from where I sit, the relationship that we need to give prominence to is the African relationship.

"One of the reasons why China and Asia are successful is that they do so much trade with each other. By comparison the trade African countries do with each other is much smaller. For Ghana, 12 percent of our trade is with the rest of Africa whereas the average for the continent is 10 percent."

Tetteh, 45 and half-Hungarian, was speaking during a break at an investment forum in the International Conference Centre in Accra before her country's recent presidential elections.

She insists China is a role model for African countries when it comes to its economic transformation and speed of development, but she expects countries like Ghana to follow a different path.

The country had one of the fastest GDP growth rates in the world, at more than 20 percent in 2011 according to the IMF, but this has been built partly by moving from agriculture to services.

Ghana appears to be bypassing the reliance China had on exporting inexpensive manufactured goods in its early-stage development. Accra itself is emerging as one of the major financial services hubs of western Africa.

"We have moved from agrarian to mixed. Manufacturing is not out of the equation but it is only part of the economy," she says.

Tetteh, vivacious and a commanding presence and who is seen as a future contender for the presidency, says Chinese investment has had a transformative impact on Ghana. The country signed up for a $3 billion loan from the China Development Bank in Beijing in April - the largest loan in the country's history.

The money is to be used for major infrastructure projects, including a new gas pipeline and investment in roads, railways and fishing harbors.

"We are using this finance to fund what we see as our most critical infrastructure needs and as far as we are concerned that assistance can help us overcome our deficit in infrastructure. We think it is very important."

Tetteh says that while Chinese investment has been welcome, some Chinese companies should not see Africa as an easy dumping ground for unsophisticated products. She believes there is a tendency for some Chinese firms to view the continent and other developing export markets like Latin America as less of a challenge than those of either Europe or the United States.

"They have got to raise their game to compete in Africa because they will also be competing against major Western brands here."

She says African consumers are now very brand-conscious, even when it comes to industrial goods.

"In Ghana people are very hot on brands. The Ministry of Commerce was involved in a project recently that involved providing tractors to our farmers' association. They told us that they wanted us to get Massey Ferguson tractors because they were the best," she says.

She concedes some lower-cost, less high-tech products might suit the African market since they are easier to repair locally without the need for expensive technical backup systems.

China's exports to Ghana amounted to $3.11 billion last year out of a total trade relationship of $3.47 billion.

Tetteh also believes that Chinese companies need to be wary of setting up their own little colonies of Chinese employees in Africa and not integrating their businesses with the community.

"Anyone who does this, does so at their peril. You need to try as much as possible to be part of the community so that it sees you as one of them. If you stand alone you are vulnerable," she says.

She argues a number of Chinese companies need to employ more African workers and provide better training so they can move into managerial and senior positions.

"Is there an issue about it? Yes, there is. We have a very large youth population and they all want jobs. So I do think there is more room for giving opportunities to Ghanaians. Of course, I am minister of trade for Ghana. You would expect me to say that," she says.

"Whoever the partner is, it is important that Ghanaians are not only used as laborers but also higher up in middle management because that is the way they get experience and learn," she says.

Tetteh, who was born in Szged, Hungary, to a Hungarian mother and a Ghanaian father, began her career as a lawyer before moving into politics, winning her first parliamentary seat in 2000. It was her late father's wish that she go into public life.

"He wanted me to go into politics. I was thinking about it. Then he died very suddenly and I thought I would try it out because it is the last thing he wished for," she says.

She concedes being an African politician, in particular, is a tough life. She says she was being held up at gunpoint during the 2008 presidential campaign when she was communications director for John Atta Mills, president before his death in July.

"It is. It certainly is," she says.

A former legal officer with the International Federation of Women Lawyers, she welcomes women entrepreneur programs such as those run by the China Europe International Business School in Accra that promote the advancement of women in business.

"There is a huge number of women entrepreneurs in Ghana. The challenge for them is not that they don't want to do business but how to improve their skills. These kinds of initiatives are very useful. They give people a better idea of how to plan and manage their business."

Tetteh says Africa is still dogged by the negative image of famines and disasters and that the recent Asian-tiger scale of growth seen in some countries in recent years never gets reported.

"You don't get the kind of economic growth that we have had over the past 10 years because of famine, war and disaster. You get it because people are now planning to make things happen," she says.

Tetteh also believes people in the world need to prepare for Africa on its current growth trajectory being a very different continent in the not-too-distant future and one of the success stories of the 21st century.

"We have a young vibrant population because of the nature of our demographics. I think Africa is going to be very engaged, politically, socially and economically with the world and I think as our economy grows we will become a key market in our own right. We are not there yet though."

Contact the writers at andrewmoody@chinadaily.com.cn and zhongnan@chinadaily.com.cn

(China Daily 12/21/2012 page6)