There is a growing acknowledgment that the China-funded projects are not economically viable in the long term but African nations still view China in a positive light
China’s role in African development is often contested and tends to evoke mixed feelings. Its role can be located anywhere between a provider of regional public goods, a vital trading partner—albeit enjoying an asymmetrical relationship—to a purveyor of so-called ‘debt traps’ and the largest financier of African infrastructure. China’s narrative of ‘South-South Cooperation’, which emphasises on solidarity with the ‘Global South’ and provides an opportunity for low- and middle-income countries to pursue an alternative model of development, has understandably been attractive to African nations.
In 2013, when China initially launched the Belt and Road Initiative (BRI), often referred to as China’s ‘Grand Strategy’ or an extension of the ‘Going Out’ strategy, African countries were eager to participate. The BRI is an ambiguous concept, without any official definition, list of entities or authorised participants, nor any secretariat. Visibly, the BRI manifests as a vast intercontinental network of transportation, energy, telecom infrastructure, accompanied by P2P exchanges and financial cooperation. As an outgrowth of its economic prowess, China has been able to finance and construct a number of large infrastructure projects across various African countries. Closing Africa’s infrastructural gap is vital for the continent’s economic prosperity and sustainable development. However, road access rate in Africa is comparatively lower than in other parts of the developing world. Estimates from the African Development Bank (AfDB) suggest that Africa’s infrastructure needs amount to US $130–US $150 billion a year, with a financing gap of around US $68–US $108 billion.
This inherent need for African countries to develop their transportation networks and improve connectivity aligns with the stated objectives of the BRI. Consequently, many African countries have benefitted from China’s financing of “big-ticket” loans for large-scale infrastructure projects, albeit with collateralisation mechanisms amongst Chinese state-owned enterprises in many instances, which the Chinese have used strategically and selectively. According to AidData, a research centre at the College of William and Mary, “African countries received 42 percent of all Chinese Overseas Development Assistance (ODA) between 2000 and 2017.” This is consistent with Beijing’s official position that most of its foreign aid budget is earmarked for Africa. Ethiopia, the Republic of Congo, Sudan, Zambia, Kenya, Cameroon, Mali, and Cote d’Ivoire have been the biggest African recipients of Chinese ODA.
African leaders continue to lavish praise upon Beijing for addressing unmet infrastructural needs. However, although there is growing appreciation of the fact that, while Chinese infrastructure projects often generate short-term economic benefits, their long-term viability and risks need to be managed. Infrastructure projects under BRI may turn out to be ‘white elephant’ projects, which are deemed unnecessary or economically unviable. Rather, the money could have been judiciously invested in projects that are likely to generate revenues, create local jobs, and unlock economic transformation.
African leaders continue to lavish praise upon Beijing for addressing unmet infrastructural needs. However, although there is growing appreciation of the fact that, while Chinese infrastructure projects often generate short-term economic benefits, their long-term viability and risks need to be managed.
Consequently, in a growing number of African countries, China is facing a “BRI backlash” due to changes in public sentiment. Certain African countries have either cancelled high-profile BRI projects or are now objectively taking a second look at whether the benefits of BRI participation outweigh the risks.
Ever since the onset of the COVID-19 pandemic last year, speculations on the possible reduction of Chinese lending to Africa have been rife. The pandemic has put Beijing on the back foot as many BRI projects have encountered implementation challenges, and a growing number of African borrowers have struggled to repay their debts, of which at least 21 percent is owed to China. In addition, a study by the Rhodium Group demonstrates that “a quarter of Chinese overseas lending has run into trouble”, which has triggered Chinese banks to revaluate its lending practices.
The first indication of Beijing’s attempt to course-correct came in 2018 when President Xi Jinping announced that BRI funds were not to be spent on “vanity projects”. Around the same time, Chinese authorities began to recalibrate their public messages and emphasise that the future BRI projects would be “cleaner” and “greener”, despite mounting evidence to the contrary.
Growing pushback against China and BRI projects
In many African countries, there has been a persistent, and often large, discrepancy in perceptions of China between civil society and Africa’s governing elites. In recent times, this chasm has led to mounting disillusionment in countries like Zambia, Nigeria, Kenya, Guinea, Sierra Leone, and Democratic Republic of Congo. The problem is further exacerbated due to the non-transparent nature of its deals that are riddled with binding non-disclosure and confidentiality clauses in Chinese loan contracts. Such revelations are coming to light in the aftermath of the coronavirus-fuelled xenophobia, sprawling anti-foreigner sentiment, and crackdown against African nationals in the Chinese city of Guangzhou in April 2020. The issue quickly became politically contentious and certainly dented the China-Africa narrative in a big way.
One of the first examples of cancellation of China-funded projects across Africa was in 2018, when Sierra Leone cancelled a US $400-million-deal to construct the Mamamah airport over economic viability concerns. Then in November 2020, after months of intense opposition from Kenyan environmentalist and civil society organisations, the Industrial and Commercial Bank of China pulled out of the proposed 1,050MW coal-fired power plant in Lamu, which is home to the UNESCO world heritage site of Lamu Old Town. Additionally, China’s plan to establish an industrial fishmeal factory in the rainforest near a beach in Sierra Leone have met with strong opposition from locals and conservationists, terming it ‘a catastrophic human and ecological disaster’. Another example is Guinea’s Simandou iron ore project, whose contract was awarded in November 2019, but negotiations have continued to drag on without making any real headway. Other recent examples include China’s Sinohydro Company’s US $2 billion bauxite-for-infrastructure deal in Ghana, and Ghana’s cancellation of the contract of Beijing Everyway Traffic and Lightening company, which was to develop an intelligent traffic management system worth US $100 million.
The biggest development has unfolded over the past few weeks in the Democratic Republic of Congo (DRC), which controls more than 60 percent of the world’s reserves of cobalt ore and where Chinese investors control the majority of Congo’s mining sector. In May 2021, President Félix Tshisekedi decided to review its mining agreements with foreign stakeholders, including China’s US $6 billion infrastructure-for-minerals deal. This led to the eventual suspension of six gold-mining companies in South Kivu province in the wake of existing acquisitions of illegal operations, human right abuses, and environmental concerns. Months of negative media coverage also portrayed the perception that Chinese companies are failing to fulfil their contractual obligations to provide social services and build infrastructure for the local communities where they operate. Surprisingly, the United States (US), which never fails to seize any opportunity to target and malign Chinese practices on the continent, did not condemn or react to the development, apart from social media barbs.
Until recently, Beijing did not have much competition in the global infrastructure finance market. However, with new leadership in the White House, the US government and its allies are seeking to develop a viable alternative to the BRI, through the Build Back Better World (B3W) initiative that the G7 announced in June 2021.
Any viable alternatives on the horizon?
China’s long-term focus on being Africa’s partner of choice is evident from the robust trade, commercial, technology, and military-security relations it enjoys with many African countries. Until recently, Beijing did not have much competition in the global infrastructure finance market. However, with new leadership in the White House, the US government and its allies are seeking to develop a viable alternative to the BRI, through the Build Back Better World (B3W) initiative that the G7 announced in June 2021. Despite such initiatives, the US continues to treat the African continent as a venue for geostrategic competition with Beijing, rather than thinking in terms of partnerships and relationships. This is unfortunate given the fact that positive perceptions in African countries towards China do not drastically outpace those towards the US.
Afrobarometer’s 2020 survey across 18 African countries indicated this exact point. Africans do consider Chinese assistance and influence in the continent in a positive light. However, there are legitimate concerns over a possible reduction in Chinese big-money spending in Africa, in the wake of domestic compulsions spurred on by the COVID-19 pandemic. This provides the US, which continues to be Africans preferred model of development over China, with an opportunity to develop a meaningful and purposeful framework for engagement in Africa. Despite engaging in outdated stereotypes and tropes about the continent, the US still enjoys a strong foundation for significant economic and security partnership in Africa. But until the American leadership actually shows up and make good on its promises, the BRI and China would continue to remain a popular choice amongst Africans.
The views expressed above belong to the author(s).