The research shows Chinese companies hire large numbers of local employees
By Frangton Chiyemura
On March 18, Tanzanians woke up to the news that their president, John Magufuli, had died. Nicknamed “the bulldozer” for his advocacy of infrastructure development. In Africa-China circles he was known for indefinitely suspending the involvement of China Merchants Holdings International in the development of the $10 billion Bagamoyo port, citing the project’s skewed terms and conditions.
The proliferation of Chinese enterprises involved in Africa has attracted a great deal of attention from academics, policymakers and other observers in recent years. Of particular concern to many are China’s employment practices for large infrastructure projects on the continent. Although infrastructure plays an important role in economic growth and development, most African countries lack adequate and reliable infrastructure necessary to boost economic development.
Chinese firms have dominated infrastructure projects
Chinese enterprises have dominated the financing and development of critical infrastructure in Africa since 2017. The Infrastructure Consortium for Africa estimates that in 2018 China contributed $25.7 billion of the overall $100.8 billion committed toward African infrastructure development projects. A 2017 McKinsey report estimated that Chinese construction enterprises won almost half of all engineering, procurement and construction contracts continentwide — including those funded by non-Chinese sources like the World Bank.
This dominant role has also increased scrutiny on Chinese construction companies’ employment patterns and dynamics. Workers, labor advocates and human rights organizations have accused Chinese construction companies repeatedly over the past two decades of unfair labor practices in Africa. Among the accusations are claims that Chinese firms often bring in Chinese workers, and offer little training and skills development for African employees. In some cases, African workers complain of exploitation, claiming they receive low wages and are subject to poor working and living conditions.
“My advice to African leaders is to make sure that if, in fact, China is putting in roads and bridges, number one, that they’re hiring African workers; number two, that the roads don’t just lead from the mine to the port to Shanghai, but that there’s an ability for the African governments to shape how this infrastructure is going to benefit them in the long term.”
Labor concerns resonate with many Africans
With high unemployment rates across the continent, Africans want good jobs — and the coronavirus pandemic has left many Africans out of work. As infrastructure projects pick up speed again, many African workers fear that Chinese construction companies will be hiring Chinese expatriates, rather than African workers.
But the ability of African governments to shape and influence Chinese employment practices on infrastructure projects is more complicated than many assume. This is because contractual terms and conditions determine employment patterns and processes, and specify certain skills and competencies. A range of stakeholders with competing interests and agendas on any given project typically weigh in on employment decisions. That said, do Chinese construction companies doing business in Africa employ more African workers than Chinese expatriates?
To understand these processes, a number of scholars are researching these assumptions — and have found that Chinese companies involved in Africa’s infrastructure projects do hire more African workers than Chinese expatriates. For example, between 2016 and 2017, researchers at SOAS University of London surveyed 37 firms working in Angola and 40 companies in Ethiopia. About 50 percent of these firms were of Chinese origin. The researchers found that 90 percent of employees in Ethiopia and 74 percent of the Angolan workforce for these Chinese companies were Ethiopians and Angolans, respectively. The findings confirm research carried out by Hong Kong University of Science and Technology scholars: Among 400 Chinese companies surveyed for that report, 85 percent of their workers were Africans. Similarly, a 2017 McKinsey report surveyed 1,000 Chinese firms and factories in eight African countries, reporting that African employees made up 89 percent of the firms’ combined workforce.
Chinese companies hire large numbers of local employees
My research, conducted between 2016 and 2019, also confirms these findings. I studied Chinese enterprises that constructed the first Chinese-backed wind energy projects in Ethiopia: Adama 1, with an installed electricity generation capacity of 51 megawatts; and Adama 2, with 153 megawatts. As of 2019, the two wind farms contributed nearly 5 percent of Ethiopia’s electricity generation capacity and constituted 63 percent of Ethiopia’s wind energy generation capacity. Adama 1 employed 1,100 personnel: 800 Ethiopians and 300 Chinese. Adama 2 had 1,480 employees, of which 1,200 were Ethiopian and about 280 were Chinese. Ethiopian workers overwhelmingly dominated the labor force in these two wind energy projects.
There are a number of possible explanations for this hiring pattern. For one, it’s becoming more expensive to hire Chinese expats vs. local employees. Given the rise in living and working standards in China, most Chinese companies find it increasingly unprofitable to bring Chinese workers to projects in Africa because expat workers expect higher wages and better living conditions. In addition, Ethiopian law specifically limits expatriate employment in the country. This makes it very difficult for foreigners to work in unskilled labor positions.
While most workers in these construction projects involving Chinese enterprises are Africans, top management and technical positions remain dominated by Chinese employees. But this does not only happen to Chinese enterprises; similar patterns exist with European and American construction companies doing business in Africa or elsewhere. Foreign companies justify these hires by explaining their preference for filling management posts with their own people. They also point to a lack of trained local employees with appropriate skill sets.
Evidence on the ground increasingly confirms that Chinese construction companies doing business in Africa tend to hire large numbers of African workers. But if they want to see more Africans working in higher-paying management and technical positions, the challenge for African governments and other stakeholders will be finding more ways to educate potential employees.
*Frangton Chiyemura (PhD) is a lecturer in international development in the Department of Development Policy and Practice, Faculty of Arts and Social Sciences at the U.K.’s Open University.
* First Published in Washington Post
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