By Claire van den Heever
Forty-eight African heads of state
gathered in Beijing on September 3 and 4 for the seventh Forum for
China-Africa Co-operation (Focac), a three-yearly display of China and
Africa’s “friendship”, “win-win co-operation”and one-directional
fund-funnelling.
gathered in Beijing on September 3 and 4 for the seventh Forum for
China-Africa Co-operation (Focac), a three-yearly display of China and
Africa’s “friendship”, “win-win co-operation”and one-directional
fund-funnelling.
The last Focac in 2015, held in
Johannesburg, saw China pledge $60-billion to Africa in the form of
loans, export credits and grants.
Johannesburg, saw China pledge $60-billion to Africa in the form of
loans, export credits and grants.
Focac is ostensibly about improving
economic ties and helping Africa fulfil its development potential. This
year, Chinese President Xi Jinping spared no sentimentality in his
references to China’s “brother” —Africa.
economic ties and helping Africa fulfil its development potential. This
year, Chinese President Xi Jinping spared no sentimentality in his
references to China’s “brother” —Africa.
Focac also aims to improve China’s access
to foreign markets and resources, while boosting the country’s
influence abroad. The forum was the ideal opportunity for Xi to tout his
pet project, the Belt and Road Initiative, an ambitious
network of trade routes compared to a new Silk Road, from which every
country in China’s favour is invited to reap the benefits.
to foreign markets and resources, while boosting the country’s
influence abroad. The forum was the ideal opportunity for Xi to tout his
pet project, the Belt and Road Initiative, an ambitious
network of trade routes compared to a new Silk Road, from which every
country in China’s favour is invited to reap the benefits.
The meeting created a number of photo
opportunities for Xi to pose with his African counterparts. He and
President Cyril Ramaphosa co-chaired the summit, although there was
never any doubt about which leader had the audience in
the palm of his hand.
opportunities for Xi to pose with his African counterparts. He and
President Cyril Ramaphosa co-chaired the summit, although there was
never any doubt about which leader had the audience in
the palm of his hand.
Trade deals were signed and bilateral
meetings took place on the sidelines. But Focac boils down to the moment
when China announces how much money it is going to funnel into the
continent. The whole production is a drum roll for
the naming of that magic number as Africa’s leaders wait with bated
breath.
meetings took place on the sidelines. But Focac boils down to the moment
when China announces how much money it is going to funnel into the
continent. The whole production is a drum roll for
the naming of that magic number as Africa’s leaders wait with bated
breath.
The $60-billion pledged in 2015 was a
crowd-pleaser, tripling the previous pledge of $20-billion at Focac
2012. Despite major concerns about Africa’s growing debt burden and
certain nations’ ability to repay Chinese loans — calling
their sovereignty into question — lowering the amount pledged this year
wouldn’t have been much of a show of friendship, China must have
decided. Beijing stuck with lucky number $60-billion and Xi received a
standing ovation after making the announcement.
crowd-pleaser, tripling the previous pledge of $20-billion at Focac
2012. Despite major concerns about Africa’s growing debt burden and
certain nations’ ability to repay Chinese loans — calling
their sovereignty into question — lowering the amount pledged this year
wouldn’t have been much of a show of friendship, China must have
decided. Beijing stuck with lucky number $60-billion and Xi received a
standing ovation after making the announcement.
“Of the $60-billion pledged, $10-billion
is labelled ‘investments in the next three years’, which means that
Chinese companies — not the Chinese government — are likely to fulfil
those investments,” explained Lina Benabdallah,
assistant professor of politics and international affairs at Wake
Forest University, a private university in North Carolina, United
States.
is labelled ‘investments in the next three years’, which means that
Chinese companies — not the Chinese government — are likely to fulfil
those investments,” explained Lina Benabdallah,
assistant professor of politics and international affairs at Wake
Forest University, a private university in North Carolina, United
States.
The remainder of the $60-billion
comprises $15-billion in “grants, interest-free loans and concessional
loans”, $20-billion in “credit lines”, $10-billion for a “special fund
for development financing” and $5-billion for a “special
fund for financing imports from Africa”, Xi announced.
comprises $15-billion in “grants, interest-free loans and concessional
loans”, $20-billion in “credit lines”, $10-billion for a “special fund
for development financing” and $5-billion for a “special
fund for financing imports from Africa”, Xi announced.
The amount pledged didn’t come as a
surprise. “It is true that in the past, Focac pledges increased each
time, while this time the overall figure stayed at $60-billion,” said
Benabdallah. “Especially in light of many doubts and
questions about the sustainability of Chinese loans and finances with
African states, this was to be expected.”
surprise. “It is true that in the past, Focac pledges increased each
time, while this time the overall figure stayed at $60-billion,” said
Benabdallah. “Especially in light of many doubts and
questions about the sustainability of Chinese loans and finances with
African states, this was to be expected.”
Senior researcher at the South African
Institute of International Affairs, Cobus van Staden, agreed: “We didn’t
expect the amount pledged to jump as much as it has in the past. This
is also a rougher trade environment globally
than it was in 2015.”
Institute of International Affairs, Cobus van Staden, agreed: “We didn’t
expect the amount pledged to jump as much as it has in the past. This
is also a rougher trade environment globally
than it was in 2015.”
Although the newly pledged $60-billion
takes centre stage, the extent to which the $60-billion pledged in 2015
has been allocated is not entirely known.Xi promises that it has “either
been delivered or arranged”.
takes centre stage, the extent to which the $60-billion pledged in 2015
has been allocated is not entirely known.Xi promises that it has “either
been delivered or arranged”.
Ministers of international relations and
trade throughout the continent were supposedly “unanimous” in their
assessment that the pledges had been or were being fulfilled.
trade throughout the continent were supposedly “unanimous” in their
assessment that the pledges had been or were being fulfilled.
“We applaud China for keeping to its
promises,”Ramaphosa told local media. “The industrial plan has resulted
in industrial development, the agricultural modernisation plan in
greater productivity, and the infrastructure plan has
boosted connectivity and integration on the continent.”
promises,”Ramaphosa told local media. “The industrial plan has resulted
in industrial development, the agricultural modernisation plan in
greater productivity, and the infrastructure plan has
boosted connectivity and integration on the continent.”
The fact is, China has not released
statistics on the status of the many millions of dollars’ worth of
grants, loans and investment that were announced at Focac 2015. The 2018
figure may include projects that have already been
initiated, which critics refer to as “double-dipping”. It might not all
be new capital.
statistics on the status of the many millions of dollars’ worth of
grants, loans and investment that were announced at Focac 2015. The 2018
figure may include projects that have already been
initiated, which critics refer to as “double-dipping”. It might not all
be new capital.
“Large figures like $60-billion require cautious analysis,” The Washington Post reported after Focac 2015.
“Tracking these projects is actually one
of the biggest issues in the whole Sino-Africa field of study,” said Van
Staden. “You don’t necessarily get any reporting when projects fall
flat or are stopped halfway through, or even
when they are completed. Deborah Brautigam’s work at the China Africa
Research Initiative [Cari] at Johns Hopkins University’s School of
Advanced International Studies [Sais] is very important because it
doesn’t only track announcements. Sais Cari also does
on-the-ground searches to see how many projects have been completed.
They tend to be in quite a unique position in relation to having hard
data.”
of the biggest issues in the whole Sino-Africa field of study,” said Van
Staden. “You don’t necessarily get any reporting when projects fall
flat or are stopped halfway through, or even
when they are completed. Deborah Brautigam’s work at the China Africa
Research Initiative [Cari] at Johns Hopkins University’s School of
Advanced International Studies [Sais] is very important because it
doesn’t only track announcements. Sais Cari also does
on-the-ground searches to see how many projects have been completed.
They tend to be in quite a unique position in relation to having hard
data.”
But Sais Cari’s data has limits, too. A
briefing paper produced ahead of this year’s Focac notes that the Cari
loans database tracks Chinese loans “through 2017” and shows that
Chinese loan commitments to Africa have increased
significantly since Focac 2015, with more than $30-billion “committed”
by China in 2016.
briefing paper produced ahead of this year’s Focac notes that the Cari
loans database tracks Chinese loans “through 2017” and shows that
Chinese loan commitments to Africa have increased
significantly since Focac 2015, with more than $30-billion “committed”
by China in 2016.
There is, however, an enormous caveat:
“Our loan figures should not be viewed as evidence of China fulfilling
Focac pledges,” said Sais Cari. “China’s Export-Import Bank, a
government policy bank, is usually in charge of Focac
pledges of loans, export credits and credit lines, but a number of
other Chinese banks, including China Development Bank, are now making
‘commercial’ loans in Africa. Commercial loans like these have not been
part of Focac pledges.”
“Our loan figures should not be viewed as evidence of China fulfilling
Focac pledges,” said Sais Cari. “China’s Export-Import Bank, a
government policy bank, is usually in charge of Focac
pledges of loans, export credits and credit lines, but a number of
other Chinese banks, including China Development Bank, are now making
‘commercial’ loans in Africa. Commercial loans like these have not been
part of Focac pledges.”
The briefing paper also warns that huge
commercial loans totalling $19-billion that were disbursed to Angola
between 2015 and 2016 have necessarily distorted the 2016 figure.
commercial loans totalling $19-billion that were disbursed to Angola
between 2015 and 2016 have necessarily distorted the 2016 figure.
According to Van Staden, there are
essentially only three reliable sources for tracking Focac pledges: “One
is Sais Cari, the other is Aid Data at the College of William &
Mary in the US, and then there’s the Chinese ministry
of finance or ministry of commerce — although they tend to be better
for large-scale numbers rather than project-specific information.”
essentially only three reliable sources for tracking Focac pledges: “One
is Sais Cari, the other is Aid Data at the College of William &
Mary in the US, and then there’s the Chinese ministry
of finance or ministry of commerce — although they tend to be better
for large-scale numbers rather than project-specific information.”
China’s funding of Kenya’s standard gauge
railway — a 480km line between Nairobi and Mombasa, which cuts
travelling time between Kenya’s two largest cities in half — has been
hailed as an example of fruitful China-Africa collaboration.
Chinese state media says it resulted in the creation of about 4 600
jobs, and related skills-transfer programmes in Kenya will be
facilitated by China for up to a decade.
railway — a 480km line between Nairobi and Mombasa, which cuts
travelling time between Kenya’s two largest cities in half — has been
hailed as an example of fruitful China-Africa collaboration.
Chinese state media says it resulted in the creation of about 4 600
jobs, and related skills-transfer programmes in Kenya will be
facilitated by China for up to a decade.
This particular infrastructure project’s
funding has, notably, been categorised as both a Focac and a Belt and
Road Initiative programme.
funding has, notably, been categorised as both a Focac and a Belt and
Road Initiative programme.
The railway has also added significantly
to Kenya’s debt burden. According to a report compiled by the China
Africa Project and the Africa-China Reporting Project, China holds 72%
of Kenya’s bilateral debt, and is therefore its
biggest creditor.
to Kenya’s debt burden. According to a report compiled by the China
Africa Project and the Africa-China Reporting Project, China holds 72%
of Kenya’s bilateral debt, and is therefore its
biggest creditor.
In Djibouti, where construction of
China’s first overseas naval base outside the country was completed last
year, Chinese financiers held about 77% of national debt by the end of
2016, according to Sais Cari data. When Djibouti’s
debt jumped from 50% of gross domestic product in 2014 to 85% in 2016,
the International Monetary Fund (IMF) expressed deep concern.
China’s first overseas naval base outside the country was completed last
year, Chinese financiers held about 77% of national debt by the end of
2016, according to Sais Cari data. When Djibouti’s
debt jumped from 50% of gross domestic product in 2014 to 85% in 2016,
the International Monetary Fund (IMF) expressed deep concern.
There is no shortage of Western critics
accusing China of laying a debt trap. In the propaganda frenzy following
Focac, Chinese state media declared: “For those who accuse China of
‘neocolonialism’, ‘plundering resources’ and
creating a ‘debt trap’ in Africa, the Beijing summit has proven them
wrong.”
accusing China of laying a debt trap. In the propaganda frenzy following
Focac, Chinese state media declared: “For those who accuse China of
‘neocolonialism’, ‘plundering resources’ and
creating a ‘debt trap’ in Africa, the Beijing summit has proven them
wrong.”
Ramaphosa maintained a pro-China attitude
at the forum by refuting allegations of any neocolonialism on China’s
part, calling China a“partner” that stimulates African social and
economic development.
at the forum by refuting allegations of any neocolonialism on China’s
part, calling China a“partner” that stimulates African social and
economic development.
While “capacity building” and “peace and
security” were two of the items that Xi highlighted this year, the fact
that natural resources from countries at high risk of debt distress —
such as Angola, South Sudan and the Democratic
Republic of Congo — have fuelled China’s rise to the world’s
second-largest economy cannot be ignored.
security” were two of the items that Xi highlighted this year, the fact
that natural resources from countries at high risk of debt distress —
such as Angola, South Sudan and the Democratic
Republic of Congo — have fuelled China’s rise to the world’s
second-largest economy cannot be ignored.
According to Sais Cari, “in Congo the
debt situation is so unclear even to the IMF that the president visited
Beijing in July 2018 to ascertain just what they owed”.Yet, based on
data from 17 African countries, Sais Cari concluded
that overall, Chinese loans are not a major contributor to debt
distress in Africa.
debt situation is so unclear even to the IMF that the president visited
Beijing in July 2018 to ascertain just what they owed”.Yet, based on
data from 17 African countries, Sais Cari concluded
that overall, Chinese loans are not a major contributor to debt
distress in Africa.
“I tend to be quite critical of the
[debt-trap] narrative,” said Van Staden. “It tends to overstate the
portion of debt that African countries owe to China while leaving out
how much debt countries in Africa still have to Western
institutions. The role of Western countries in adding to the debt
burden or having development finance redirected to debt repayments
doesn’t tend to get highlighted in this narrative.”
[debt-trap] narrative,” said Van Staden. “It tends to overstate the
portion of debt that African countries owe to China while leaving out
how much debt countries in Africa still have to Western
institutions. The role of Western countries in adding to the debt
burden or having development finance redirected to debt repayments
doesn’t tend to get highlighted in this narrative.”
It also tends to gloss over the options that are open to African countries, he said.
“There is an assumption that African
countries have an equal chance to get money from [traditional lenders
such as] the World Bank, which isn’t the case. This narrative tends to
diminish the agency and decision-making of African
countries, [implying that they are] childlike and easily seduced by
China.”
countries have an equal chance to get money from [traditional lenders
such as] the World Bank, which isn’t the case. This narrative tends to
diminish the agency and decision-making of African
countries, [implying that they are] childlike and easily seduced by
China.”
The continent’s leaders sent out a clear
signal at this week’s forum that they are fully capable of deciding what
is in their best interest. Likewise, Beijing has insisted that it is
not playing a political game. But the dynamics
of another generous pledge without publicly defined checks and balances
paints a rather dicey picture for Africa’s geopolitical and economic
future.
signal at this week’s forum that they are fully capable of deciding what
is in their best interest. Likewise, Beijing has insisted that it is
not playing a political game. But the dynamics
of another generous pledge without publicly defined checks and balances
paints a rather dicey picture for Africa’s geopolitical and economic
future.
