Over the course of the past decade Chinese engagement within Africa has ever deepened, extending the range and depth of Chinese products saturating African markets. African consumers have been beset by the dearth of cheap Chinese consumer goods that have found their way into everyday household use. Many of these goods sold throughout the continent have become staples of African life. As a result, over the past decade Chinese imports to Africa continue to rise, reaching US$ 23 billion per year in 2008. The extent of Chinese saturation within African markets has created a number of problems for African states as consumers, retailers and labour organisations have voiced concerns over the dumping of cheap Chinese good as traditional African retailers and economic sectors are threatened by Chinese products flooding the markets. Recently, another fear has emerged, that of the food and product safety of these Chinese goods. The widespread reports of Chinese milk products contaminated with the industrial chemical melamine have prompted African governments and consumers to re-evaluate their relationship to Chinese products. This has also raised poignant questions as to the lack of regulation and control African government have over the products consumed within their informal shadow economies.

It is through Africa’s informally shadow economies that many of these products are sold directly to consumers, bypassing regulatory checks and controls. According to the World Bank, shadow economies in developing countries can account for up to 44 percent of GDP. Estimates however can reach as high as 75-80 percent in some African states. By nature a shadow economy exists beyond the regulatory framework of normal economic enterprises acting as a secondary economy outside of the reach of government control. The extent of what comprises the shadow economy is an ongoing academic discussion, for our purposes we will define the informal shadow economy as the sale of legal goods outside of the normal regulatory and legal frameworks. Throughout Africa the informal shadow economy has taken shape through the formation of micro-enterprises run through road side stalls, informal vendors and kiosks where formal economic enterprises do not exist. Travel through any Africa country and the extent to which the shadow economy exists as a fundamental of every day life becomes clear.

The nature of the informal shadow economy, existing outside of the normal regulatory framework of government, has resulted in a dearth of consumer goods and products that go unregulated and uncontrolled. Within Africa this is not a new problem effecting consumers but rather a daily struggle against harmful products. Ultimately, the lack of regulation and control over Africa’s shadow economies has resulted in a potentially dangerous scenario for Africa’s consumers. The recent reports of Chinese milk products contaminated with the industrial chemical melamine have prompted most African states to ban the sale of Chinese milk products, restrict their importation and recalling existing products from store shelves. This however will do little to limit the exposure of African consumers buying through the informal shadow economy from purchasing potentially harmful Chinese milk products already in the market. The ban on imports and recall of existing products will help to limit the exposure of consumers purchasing through the formal market to contaminated milk products. However, the problem remains that the informal shadow economies, used primarily by Africa’s poor, will, in most instances, still be at risk for selling contaminated Chinese products. The lack of capacity, technical capabilities and subsequent control over these economies will result in the continued exposure of African consumers to dangerous Chinese products.

The extent of Africa’s exposure to melamine contaminated milk products is not known at this stage. What is known however is that these products need to be inspected and controlled before entering Africa’s markets as the capacity and technical capabilities to test products at the point of entry does not exist. Once these products enter African markets, there is little regulatory control and oversight, to the extent that when a product is known to be dangerous, there is no way to guarantee that African consumers will not continue to be exposed to the product.

Notes: