Over the past few years, many western reactions to China’s increased involvement in Africa has been one of suspicion. Some have pointed to China suffocating Africa in rivers of debt concealed as aid. But as with all forms of international relations, the China-Africa relation is one of strategic relationship. China needs resources. It also needs space to battle the west for world dominance. Africa needs cash to plug a huge infrastructural hole. African businesses also need access to affordable tech to propel the continent out of poverty. Sure, China might be fighting the West for political capital in Africa, but Africa has its own agenda. An agenda that if well-played, could mean well for many on the continent.
In September, 2018, President Xi Jinping promised $60 billion in loans, aid, and investments to African countries. Speaking at the opening ceremony of the Forum on China-Africa Cooperation (FOCAC) in Beijing, the Chinese president promised that the funding would come from both public and private sources.
This involved a $20 billion credit line for African governments to invest in infrastructure and other related spending. Beijing also promised to extend $15 billion of grant or concessionary loans to the continent. For their part, Xi Jinping encouraged the Chinese private sector to invest a total sum of $10 billion over the next three years in African enterprises. The Chinese private sector seemed to have already taken up that mantle, the data suggests.
Jack Ma, founder of Alibaba, has established a $10 million Netpreneur Prize in Africa to support digital entrepreneurs on the continent. This represents a more recent phenomenon that could somehow be traced back to President Jinping’s speech. Right after the Beijing Summit, different heads of state visited the e-commerce giant to make a case for their respective countries.
Cyril Ramaphose, South Africa’s president, encouraged Jack Ma’s company to build training centres in South Africa to help develop e-commerce businesses in the country. Not long after the summit, Ghana’s Agric ministry teased interest from the e-commerce giant about trading cocoa products on Alibaba. For Ghana, finding a way to earn more from the multi-billion dollar chocolate industry has been much of a conundrum for the government. With China’s population and the leverage that a 400 million people e-commerce business that Alibaba boasts of, China represents a potentially viable outlet for Ghana’s cocoa products.
A 2017 McKinsey and Co. report said there were up to 10,000 Chinese businesses currently located in Africa. From industry to commerce and even farming, Chinese businesses have traveled en masse to tap into the huge potential that Africa promises. And it is a narrative that has long been pursued. Huawei and ZTE were front-runners in the development of Africa’s second wave of mobile infrastructure. Over the past decades, companies like Transsion Holdings have taken up the fort by investing in the smartphone market to create unique solutions suitable to the African market. In fact, China’s tech-print is rather huge in Africa.
The theory that China is up to no good has been hammered by many. The idea is that China is only interested in controlling Africa’s resources. By using such resources as oil reserves, bauxite reserves, etc. as collateral, the supposed generous loans could turn into a tight noose around the necks of African governments. The Chinese would then easily take over everything, controlling revenues and even emigrating en masse.
Before he was ousted by President Trump, Rex Tillerson, America’s then Secretary of State echoed these exact sentiments. He warned African states to not to give up their countries in exchange for cash and supposedly cheap loans. “It is important that African countries carefully consider the terms of those agreements (with China) and not forfeit their sovereignty,” he said in Addis Ababa during his official trip to the continent.
The Chinese see things differently, though. They declare China as a caring partner in a relationship of mutual benefit. That China advancing such a huge amount is testament to China’s dedication to seeing the relationship succeed. Xinhuanet put it simply as: “Beijing’s unselfish dedication to help developing countries.” For African leaders, the choice seems clearer. They can count up 10,000 Chinese businesses doing business in Africa as proof.
Faced with limited road infrastructure, poor hospitals, and a lack of drinking water in certain areas, an injection of fresh capital is welcome no matter where it’s coming from. China’s investments in East Africa point to alleviating some of these challenges. For example, China funded the $4 billion standard gauge railway from Nairobi to Mombasa in Kenya to cut down travel time between Kenya’s largest cities from 15 hours to 5 hours. In Djibouti, they have invested a further $3.5 billion to build the first phase of the biggest free zones enclave in Africa. And there is more.
In May this year, Nigeria announced a $7 billion railway deal to connect Lagos to Kano. The contractor, China Civil Engineering Construction Corporation (CCECC), is a subsidiary of state company,
China Railway Construction Corporation. The year before that, another deal was signed to connect Lagos to the oil-rich Calabar for $11.7 billion. Most of the funding would be provided by China as well.
In Ghana, the Chinese got more creative to work around the country’s huge debt stock. Standing at over 60% of GDP, Ghana’s lawmakers knew better than to add to their woes by accepting another tranche of loan, no matter how attractive the interest rates were. Instead, Ghana worked out a deal with the Sinohydro Group Limited of China to provide $2 billion worth of infrastructure in exchange for refined bauxite. For supporters of the agreement, not even IMF’s position on whether or not it was a loan mattered. The fact that it was going to provide much needed infrastructure and jobs for the population was more important. Deputy speaker of parliament, Osei Owusu said, “Whether you call it a loan or a batter, it doesn’t matter. So long as it gives me 10 kilometres of asphalt road at the busiest part of Bekwai; it builds hospitals; it builds the bridges, the people of Ghana, in the end, are benefiting from it.”
China is not only involved in roads and rails. It has made strides in the energy sector as well. A 2016 International Energy Agency report counted China as a major investor in sub-saharan Africa’s electrification drive. For the five years leading up to the report, the IEA reported that China contributed 30% of all new energy installations in the sub-region. Backed by a seemingly generous state, Chinese businesses are investing in hydro-power in Gabon, waste-to-energy plants in Ethiopia, as well as other renewable plants in South Africa.
For decades Africa has been subjected to standards set by its western donors. Loans have only been extended to countries that lived by a certain set of ideals. Non-democratic nations, as defined by countries like America and others in the EU, have been punished by having their supply of grants and loans cut off. Less than a decade ago, the World Bank conditioned its aid programme on Mali privatising a struggling cotton industry. This was an industry that had suffered from unfair competition from mostly rich western countries. In a nutshell, aid from the west has always come with some form of strings attached; until China came along.
In his FOCAC speech, President Jinping promised non-interference in the affairs of Africa. He promised that China would not dictate to Africa which development paths to follow. In contrast, the past decades have seen the west proffering different development models for the continent. Whether it was encouraging countries to open up their markets to exports from the west or other, African nations had very little to say. Instead, Beijing is allowing African’s to determine their own development agenda. Having pointed out the key areas it needs help in, China then proposes its own solutions, whether it’s through a loan or through investments by private businesses.
President Jinping also promised that China would not impose its will on African countries nor would it interfere in its internal affairs. This is a welcome relief for many leaders on the continent. McHenry Venaani, Trade Immigration and Customs portfolio in the Pan-African Parliament put it succinctly when he said: “Announcement by President Xi that his country will support Africa with no strings attached is welcome and indeed a cornerstone of engagement between China, the second largest economy, and Africa.”
The approach is novel and it has earned China more friends on the continent. Hoze Riruako, political analyst and lecturer at the Univesity of Namibia called China’s relationship with Africa as one of mutual benefit. Stephen Ndegwa of the United States International University Africa based in Kenya said, “China has chosen to let African countries chart their own course towards an ideally unique African continent with its own social, economic and political identity,”
Perhaps, the greatest approval for China’s efforts in Africa came from Rwanda’s president Kagame. A known critic of foreign aid, Paul Kagame was full of praise for Beijing’s efforts in Africa. “Africa is not a zero-sum game,” he said. “Our growing ties with China do not come at anyone’s expense. Indeed, the gains are enjoyed by everyone who does business on our continent.”
For African leaders, what China brings is funding with no strings attached.
After President Xi Jinping’s speech at FOCAC in Beijing, McHenry Venaani, Trade Immigration and Customs portfolio in the Pan-African Parliament said, “Whatever aid China is giving to Africa for economic growth and infrastructure development is timely as Africa needs a partner for growth currently.” It is as if Africa looks to China for inspiration now, and for good reason.
Over the past three decades, China has been able to move three hundred million people out of poverty. She has moved from being a backward, isolated economy to the second largest economy in the world behind America. More people now have access to secondary education than they did before. Chinese film industry is now the new frontier of American filmmakers. Both in terms of funding and international audiences, the film industry is shifting eastwards.
Also, the fact that China has achieved what she has without having to kowtow to western standards encourages African leaders.
For Africa, China might look like the blueprint that the IMF and the West have been trying to build since the wave of independence in the 1960s. By investing in its people like China did, Africa might be able to break the poverty loop and become a stronger force in world politics. But every nation needs more than natural resources. The continent must learn to develop its human resources.
Africa also needs to build its own institutions. It must be wary of strong nations exploiting smaller ones because that is the nature of politics. Promises made under the limelight of international press officers mean naught when negotiations and deals are signed in presidential villas. No nation will develop Africa for Africans.
But aid and grants must be complimented with a self-push towards development. China might not act like a big brother to Africa but it has its own billion people to feed. It’s important that African leaders work towards empowering their people. As Ghana’s Akuffo-Addo said, “We need to focus on what we can do for ourselves. Aid has not done too much for us.”