Africa eyes economic progress in relationship with Beijing, but are there trade-offs?

Africa eyes economic progress in relationship with Beijing, but are there trade-offs?
Source: Foreign Policy

With China’s rise as an economic powerhouse in recent decades, along with its international investment program – known as the Belt and Road Initiative (BRI), which seeks out large-scale infrastructure partnerships in external markets – Beijing is emerging as a significant source of global development funding.

While the majority of BRI projects take place in Asia, closer to home, a growing minority of funding projects are occurring in Africa.

As of late last year, 40 of the continent’s 55 countries have signed a memorandum of agreement (MOU) for a Chinese-financed project.

Examples of recent projects include a railway connecting Ethiopia with its neighbor Djibouti and the construction of a 3,050-megawatt hydroelectric plant in Nigeria. As with other BRI projects across the world, these mostly focus on essential infrastructure projects that much of the developing world lacks.

For this reason, a willingness from the Chinese government to help finance and construct these projects are often welcomed by local officials. While the projects give beneficiary countries an opportunity to lay the groundwork for steady economic growth and domestic capacity-building, China’s dealings with Africa have not been without controversy.

Some claim that China is taking advantage of Africa’s natural resources and underdog economic status to put itself into a favorable financial and strategic position, especially by way of so-called “debt-trap diplomacy,” a system that allegedly results in a bilateral relationship where financed debt puts one country at a disadvantage.

Despite these concerns, many Africans among the general population seem to have a strikingly positive view of China overall.

According to a Pew Research Global Attitudes survey in 2019, 70% of Nigerian participants and 58% of Kenyans had a favorable view of China. By comparison, the average positive perception of China from the 34 countries surveyed was just 40%.

Amid the increased investments, however, the trajectory between the two regions remains stark.

Although the African continent is home to over 1.3 billion people, China as a single nation has an estimated population of over 1.4 billion. China has managed to transform their economy over recent decades, lifting 850 million people out of poverty, but many countries in Africa remain mired in it.

Despite reductions in the overall poverty rate on the continent over recent decades, largely fueled by gains in East and West African nations such as Tanzania and Burkina Faso, total poverty has risen due to population growth.

Many Sub-Saharan countries, in particular, struggle from poverty. With increased investments and no signs that Beijing aims to slow down its BRI partnerships, should African nations be concerned over the potential fallout?

Beijing’s development style

A main topic of controversy has been the way that Beijing handles its development systems.

While proponents, including the Chinese government, have lauded its approach as a mutually-beneficial pathway toward economic growth, others have criticized Beijing for putting strict financing conditions on its loans.

In contrast to a popular development aid style in the West that often sets a number of governance and social-based preconditions on the money given to these countries, usually in the form of anti-corruption initiatives or an attempt to strengthen social safety nets, China has instead opted to forgo these indicators of good governance for a focus on commercial development.

Western global financing institutions such as the International Monetary Fund have received their fair share of criticism for allegedly engaging in predatory lending practices that exploit beneficiary countries, but critics of the Chinese model say that it is overly focused on adherence to financial commitments.

While some observers have praised China’s so-called “commerce-is-development” view as a worthwhile alternative to a Western model that prioritizes internal reforms, which critics say unfairly compels leaders to implement policies on donor’s terms, others say China’s model is dangerous not only due to the possibility of financial exploitation, but also due to its lack of good governance protocols.

Not everyone is on board

In Africa, while the majority of nations are moving ahead with Chinese-funded projects, a minority have opted out, at least for now.

As of 2019, 14 African countries have yet to agree to a BRI investment partnership with Beijing.

According to Hannah Ryder, the chief executive of Development Reimagined, a consultancy organization based in China, the reasons for holding out are diverse.

Eswatini, formally known as Swaziland, is one such country. Eswatini has a limited relationship with China as a result of its decision to recognize Taiwan as an independent state. Beijing claims the island as a territory of its own.

Meanwhile, the Democratic Republic of Congo, the Central African Republic and Benin all opposed China’s acceptance into the United Nations in 1971, complicating their own bilateral relationships with the country.

Others – like Mauritius, Botswana and Equatorial Guinea, which are considered middle income countries in Africa – are reportedly keeping their options open in their dealings with Beijing.

“They are waiting to see what the BRI might mean in practice for others before jumping into an MOU, as they are unclear of the implications,” explained Ryder.

Diplomatic sway

While projects relating to BRI don’t represent China’s first foray into Africa – economic partnerships with some nations have been ongoing since the 1980s – the structural power balance between many African nations and Beijing has been totally altered.

Several decades ago China was poorer than many African nations – including Zimbabwe, Kenya and Liberia, among others – but now China lays claim to considerable global economic influence.

As a whole, if Africa can take advantage of China’s economic rise and leverage investments well, there is room to benefit, experts say. As for the downside, the risk of debt traps and outsized Chinese influence could come back to haunt African nations if they aren’t careful.

“Much of the ‘Chinese aid’ flowing into Africa contributes to a massive increase in debt among African nations,” said Jean-Claude Juncker, the former president of the European Commission, in 2019.

“This is not happening in conjunction with [agreements between] Africa and Europe,” he added.

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