Maximiliano Méndez-Parra, Global South trade expert: "China's colonial pattern in Africa is quite similar to that used by Europe in the past."

The headquarters of the Overseas Development Institute (ODI)—one of the world's most established international development think tanks , founded in 1960—is located in a stately building in London's forbidding Westminster. A stone's throw from Big Ben, in a vast, open-plan office dominated by diversity and silence, dozens of minds concentrate on finding ways out of the labyrinth of inequality and injustice, the ODI's two focal points. One of its researchers, Argentine Maximiliano Méndez-Parra, analyzes possible avenues to boost trade and advises governments on how to facilitate an industrial leap in a region predominantly agricultural and exporting raw natural resources.

Méndez-Parra is confident that the African Continental Free Trade Area (AfCFTA), which is slowly being implemented after its approval in 2019, will galvanize production processes on the continent.

Question: Are we moving toward an Africa that adds value to its natural resources instead of generally limiting itself to exporting them as raw materials?

Answer: Most countries have this as their objective, and there are processes in place to make it happen. The main objective of the AfCFTA is to increase trade in manufactured goods and value-added minerals within Africa and increase their exports to the rest of the world. It's a complex process, with a chicken-and-egg relationship at the bottom: few manufactured goods and refined raw materials are exported because there is no industrial base, and there is no industrial base because there are few exports.

Q. How do you break that cycle?

A. Many African countries have tried, but few have succeeded. Morocco is a success story, especially in the automotive industry, where it has made efforts to attract foreign investment and is already fully integrated into the European Union's value chains, whose geographic proximity makes things much easier. Ethiopia is another interesting case: it went from primarily exporting coffee 20 years ago to diversifying its offering by adding flowers and textile products. The role of China has been key here, establishing Special Economic Zones (SEZs) and benefiting from the ample supply of cheap labor.

Q. You've also built the railway linking Addis Ababa (Ethiopia's capital) with the port of Djibouti to provide access to the sea for what's produced in those EEZs. It seems like a perfectly designed plan thousands of miles from Africa.

A. The reality is that the companies operating in these regions are mostly Chinese. Not large conglomerates, but small and medium-sized startups. Whether you like the model or not, the fact is that Ethiopia has enjoyed a long period of prosperity, ranking in the top three for global growth for some years. It has gone from being permanently on the brink of famine to consolidating a growing middle class.

Q. Is there much potential in the textile sector on the path toward a more industrialized Africa?

A. The problem is that African countries have to compete—in the global market, and specifically in the European market—with extremely efficient countries like Bangladesh and Cambodia. There's little room, even without tariffs, for selling textiles in the EU, as is the case in most cases.

African countries have to compete—in the global market, and specifically in the European market—with extremely efficient countries like Bangladesh and Cambodia.

Q. For the AfCFTA to have a significant impact on the continent's development, infrastructure is needed. And China, the major driving force in this area in recent times, is much more conservative today than it was 15 years ago when it comes to financing African trains, roads, and ports.

A. The need is enormous. Not only in terms of large, physical infrastructure, but also in what are called soft infrastructures , for example, regular maritime routes. Today, to transport cargo from Nigeria to Kenya, you probably have to go through Singapore. And if you want to go by truck, forget it, I don't know if anyone has tried it... We need to improve connectivity between countries at all levels. And streamline logistics. Good initiatives have been launched, for example what Trademark Africa is doing to establish trade corridors, especially in the east. They've managed to reduce the travel time for a container between Mombasa (Kenya) and Uganda from 25 days to three.

Q. Do major powers hinder Africa's attempts to add value to its natural resources? Does the extractivist paradigm still prevail?

A. I don't think so. At least not in the EU, the UK, or even the US, before Trump's arrival. It's true that there is an interest in controlling strategic minerals, but also many development aid programs that encourage models of greater autonomy, as well as a supposed desire not to repeat certain patterns of Europe's past. Incidentally, China's colonizing pattern in Africa is quite similar to the one Europe used in the past. So how many of these desires are rhetoric? Who knows. Undoubtedly, examples of this pattern of classic colonialism still exist. The Biden administration approved funding and guarantees for the Lobito corridor [also supported by the EU ], which connects mines in the Democratic Republic of Congo to a port in Angola. The idea is quite simple: get minerals out to the West without much processing.

Q. To what extent is the cliché of a huge asymmetry between ultra-powerful foreign entities and fragile African states, which are always forced to give in if they want to receive investment, true to life?

A: It depends a lot on the timing and context, although it's positive that the AfCFTA includes a protocol that emphasizes sustainable development and the sharing of obligations between the state and investors, in stark contrast to traditional investment agreements, which were basically a way to protect investors. It's quite innovative as a general framework that puts investment at the service of countries' development.

Q. Will it be implemented in the terms proposed?

A. Then there are the specific cases, with a wide variety of political and economic situations that facilitate more or less extractive agreements. Imagine a country having serious problems repaying its debt . An investor comes along and puts a significant amount of dollars on the table, and we'll see who says no. The current situation doesn't help either. With the tariff war, global investment is declining, which means that, in that asymmetry I was talking about, the balance tends to lean in favor of investors, since they are more selective in their decisions.

It is true that there is an interest in controlling strategic minerals, but there are also many development aid programs that promote models of greater autonomy.

Q. Is it legitimate to demand that Africa's fledgling industry be as green as possible, a condition that could slow down already rather timid progress?

A. There's no doubt that the transformation toward a less environmentally harmful production method has costs. But it's not clear, in terms of the technology itself, that producing clean energy is more expensive than producing dirty energy. Countries like Kenya have opted for geothermal energy; it's used massively there, and they're global leaders in this field. This gives them an advantage when trying to export to regions like Europe, which has very high environmental standards. Since much remains to be done and an adaptation process won't always be necessary, I prefer to view green energy production in Africa as an opportunity rather than a burden.