Sub-Saharan Africa's engagement with emerging partners: Opportunities and challenges

Abstract

The aim of the paper is to analyze the economic impact of Sub-Saharan Africa's (SSA) engagement with emerging partners (China, India and Brazil BICs) and to determine the opportunities and challenges of the increasingly engaging with the new partners. In order to achieve the aim of the paper it estimated the most effective variables that determine the trade intensity between SSA and Chinausing Gravity model approach. The paper concluded that the most important variables that have the major effect on the value of exports of Sub-Saharan Africa to Chinawere rate of mobile telephone in China (infrastructure variable) and China FDI to Sub-Saharan Africa because much of China's outward direct investment (ODI) in SSA is closely linked to trade. Africa's exports to the BICs are dominated by fuels and primary commodities (mainly to China and India); the BIC's exports to African countries are dominated by manufactured goods. Chinese FDI can be categorized as resource-efficiency-and market-seeking investments.