China’s Growing Investments In Africa: Worrying Implications
China and India, the two emerging powers in Asia, are not newcomers to the African continent. Both have for long built historical, political and economic relations with African countries, with their presence in recent years growing immensely. China and India’s renewed engagements with Africa have come at a time when the business climate has improved across Africa and interest in Africa as a market has grown.
However, Sino-African relations in recent years has largely focused on China’s massive and aggressive investments in Africa’s infrastructural projects under its Belt and Road Initiative (BRI). There could be serious implications of these investments on individual African countries. Under BRI, China wants to revive ancient Silk Road, as well as link China with Africa and Europe through land and maritime routes. China’s government, its Exim Bank and its companies have together lent approx. $143 billion to Africa between 2000 and 2017, much of it for large-scale infrastructure projects, as per reports from China Africa Research Institute (CARI) at Johns Hopkins University, USA. Much of the activity associated with China’s BRI can be viewed as an attempt by China to minimize its strategic vulnerabilities by diversifying its trade and energy routes while also enhancing its political influence through expanded trade and infrastructure investments in the waterfront states of the East African region. Central to these efforts are moves to open new sea lines of communication and expand China’s strategic port access around the world.
In this context, East African countries have developed into a central node in the Maritime Silk Road, connected by planned and finished ports, pipelines, railways and power plants built and funded by Chinese companies and lenders. China has identified Kenya as a key maritime pivot under its Belt and Road Initiative (BRI) and Maritime Silk Route project (MSR), and to that end has invested billions of US dollars for railway modernisation, construction of pipelines from Kenya to South Sudan, built the Lamu Port and related infrastructure. In addition, billions of dollars have been spent by Chinese companies in establishing two flagship BRI projects in East Africa. These are a standard gauge railway set up, connecting Mombasa to Nairobi and the electric railway from Addis Ababa to Djibouti, where China has established its first overseas naval base, with stakes in a strategic deep water port.
While the pursuit of African nations to build a sound, infrastructure in their respective countries has been reassured by Chinese projects under BRI, most of the African countries are sinking deeper into debt distress, according to a World Bank report. Moreover, the COVID-19 pandemic has pushed Sub-Saharan Africa into a negative (-5.1 per cent) growth rate in 2020.
Lack of transparency in China’s loan disbursement and its terms and conditions are fast becoming another matter of concern. Coupled with it, the debate surrounding a “debt-trap diplomacy” strategy is ongoing among academics and Africanists. For example, Sri Lanka and Pakistan have fallen into the Chinese debt trap and both are being forced to hand over strategic assets like Hambantota and Gwadar ports to China. This has naturally set off alarm bells in African countries. According to African analysts, China is not bothered about debt repayment – it is solely interested in offering cheap and unsustainable loans to vulnerable African countries in exchange for providing lucrative national assets as collateral. Recent media reports highlighted that Zambia has been asked by China to provide its copper mining assets as collateral in exchange for economic help, thus reinforcing the inherent undercurrents below the glassy calm surface of China-Africa ties.
India, on the other, has declared the African region as a ‘top priority’ area in its foreign policy agenda. It has reached out to Indian Ocean littoral states in East Africa through offers of military aid, capacity building, and training assistance. India has developed or revived several forms of bilateral and multilateral cooperation with African countries since 2014. It has also stepped up cooperation with smaller island states like Seychelles and Mauritius. India plans to take off two projects i.e. ‘Mausam’ and ‘Asia Africa Growth Corridor’. Both these projects aim to strengthen New Delhi’s ties and trade links with African countries.
There is a lot of goodwill for India in Africa. The time has come to initiate stronger foreign policy measures and to be diplomatically proactive in the region. Africa remains vital for India’s emergence as a major global actor on the international stage.
Script: Prof. Aparajita Biswas, Centre for African Studies, University of Mumbai
However, Sino-African relations in recent years has largely focused on China’s massive and aggressive investments in Africa’s infrastructural projects under its Belt and Road Initiative (BRI). There could be serious implications of these investments on individual African countries. Under BRI, China wants to revive ancient Silk Road, as well as link China with Africa and Europe through land and maritime routes. China’s government, its Exim Bank and its companies have together lent approx. $143 billion to Africa between 2000 and 2017, much of it for large-scale infrastructure projects, as per reports from China Africa Research Institute (CARI) at Johns Hopkins University, USA. Much of the activity associated with China’s BRI can be viewed as an attempt by China to minimize its strategic vulnerabilities by diversifying its trade and energy routes while also enhancing its political influence through expanded trade and infrastructure investments in the waterfront states of the East African region. Central to these efforts are moves to open new sea lines of communication and expand China’s strategic port access around the world.
In this context, East African countries have developed into a central node in the Maritime Silk Road, connected by planned and finished ports, pipelines, railways and power plants built and funded by Chinese companies and lenders. China has identified Kenya as a key maritime pivot under its Belt and Road Initiative (BRI) and Maritime Silk Route project (MSR), and to that end has invested billions of US dollars for railway modernisation, construction of pipelines from Kenya to South Sudan, built the Lamu Port and related infrastructure. In addition, billions of dollars have been spent by Chinese companies in establishing two flagship BRI projects in East Africa. These are a standard gauge railway set up, connecting Mombasa to Nairobi and the electric railway from Addis Ababa to Djibouti, where China has established its first overseas naval base, with stakes in a strategic deep water port.
While the pursuit of African nations to build a sound, infrastructure in their respective countries has been reassured by Chinese projects under BRI, most of the African countries are sinking deeper into debt distress, according to a World Bank report. Moreover, the COVID-19 pandemic has pushed Sub-Saharan Africa into a negative (-5.1 per cent) growth rate in 2020.
Lack of transparency in China’s loan disbursement and its terms and conditions are fast becoming another matter of concern. Coupled with it, the debate surrounding a “debt-trap diplomacy” strategy is ongoing among academics and Africanists. For example, Sri Lanka and Pakistan have fallen into the Chinese debt trap and both are being forced to hand over strategic assets like Hambantota and Gwadar ports to China. This has naturally set off alarm bells in African countries. According to African analysts, China is not bothered about debt repayment – it is solely interested in offering cheap and unsustainable loans to vulnerable African countries in exchange for providing lucrative national assets as collateral. Recent media reports highlighted that Zambia has been asked by China to provide its copper mining assets as collateral in exchange for economic help, thus reinforcing the inherent undercurrents below the glassy calm surface of China-Africa ties.
India, on the other, has declared the African region as a ‘top priority’ area in its foreign policy agenda. It has reached out to Indian Ocean littoral states in East Africa through offers of military aid, capacity building, and training assistance. India has developed or revived several forms of bilateral and multilateral cooperation with African countries since 2014. It has also stepped up cooperation with smaller island states like Seychelles and Mauritius. India plans to take off two projects i.e. ‘Mausam’ and ‘Asia Africa Growth Corridor’. Both these projects aim to strengthen New Delhi’s ties and trade links with African countries.
There is a lot of goodwill for India in Africa. The time has come to initiate stronger foreign policy measures and to be diplomatically proactive in the region. Africa remains vital for India’s emergence as a major global actor on the international stage.
Script: Prof. Aparajita Biswas, Centre for African Studies, University of Mumbai
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