Chapter 2.4 Trade and development in Africa
South-South trade agreements are not necessarily bringing sufficient economic opportunities to some of the counterpart.
For example, it is very common to see partnerships between African countries and China to build infrastructure or to exploit natural resources in Africa. In many occasions, the Chinese may bring their own labour force and use Chinese-produced supplies and components limiting the potential economic opportunities for the African countries.
In some occasions, concession agreements to extract natural resources (be mining, oil or gas) between African or Latin American countries and Chinese corporations are based on undervalued estimates of the resources to be extracted that result in a net loss for the host country. In many occasions these “bad deals” have roots in the political cycles (need to get resources to finance a budget deficit) and corruption.