top of page
  • Writer's pictureDurham Pro Bono Blog

China’s Belt & Road Disguise in Africa: Vol 3 of BRICS in Africa

Disclaimer: The views expressed are that of the individual author. All rights are reserved to the original authors of the materials consulted, which are identified in the footnotes below.


“China’s trade-and-investment march across the globe may be a neo-imperialist campaign to reshape the world, exploit Africa’s need for investment, and become a leading global economic power.” – Pranit Gupta

It is no doubt that the African Continent is one of China’s biggest investment involvement with 40/55 African states along with the African Union pledged to the Belt and Road initiative (B.R.I) since 2013 but whether the returns are worthy continue to remain a big question for “China’s Grand Plan”[1].

Although above the surface Africa itself appears to be at high risk, low and slow returns investment due to the continents’ overall high poverty level, low GDP growth, lack of infrastructure development and unstable political governance. Africa is in a state whereby their only hope of developing their economies is through foreign investment but since western aid is an unpopular stream due to African nations controversial stabilization conditions the international development banks have thus limited funds available[2]. In addition Global western banks have also resisted providing risky loans since the detriment of the 2008 economic crisis[3].

However, with the perfect strategy, China brings forward an easily available loan system that has become a perfect and unrebukable alternative providing much speedier, cheaper and less conditioned loan to the world and more specifically Africa. Between 2000 and 2017, it is estimated that Chinese banks have lent over $140 billion to governments and state enterprises in Africa with a potential project mark of over $500 billion, closing their previously unmet infrastructure needs on the continent[4]. While the African nations have slowly become sensitive to Chinese investments,the rise of China’s “one-belt road initiative-sponsored investment” becomes a flawless disguise to rope all the nations into China’s chessboard.


Despite the foremost concern is intrusion of Africa’s security and dependency on China, the continent remains to prioritize their economic prosperity. If completed, BRI transport projects could potentially reduce travel times along economic corridors by 12%, increase trade between 2.7% and 9.7%, and increase income by up to 3.4% and lift 7.6 million people from extreme poverty[5].

The BRI transport route has the potential to significantly improve trade, foreign investment, and living conditions for citizens in participating countries especially those in Africa[6].

Unlike China which is deprived of their own polluted environment the Africa continent contains the world’s richest soil-deep natural resources (wildlife and agriculture) with thousands of hectares of undeveloped land at below average prices, and with low-cost labour the overall cost for development is subsequently lowered therefore advances China’s strategy in building their presence on the continent are possible. In addition, with years ahead the continent is contributing to a raising power of the Global South on the world league table that ultimately advances China’s geopolitical agenda[7].

Despite the fact that the future is unknown, the risk of China’s investment is still significantly high, and growth is consequently unsteady and slow. For example, the current coronavirus is an unforeseen circumstance that is slowly threatening the global economy. Africa will need to reform policies and induce a new trade culture to sustain their people in order to maintain a steady growth in this initiative or the investment could potentially bring an opposite effect. The debt for resources regime is also not a sustainable one as the goal should not be robustly robbing Africa of its resources but rather China needs to take a development approach in ensuring sustainability. Additionally, the BRI still poses high risks common to many major infrastructure projects: debt risks, governance risks (corruption and procurement), stranded infrastructure, environmental risks and social risks.


Hence, only if China and other corridor economies adopt and reform deeper policy that increase transparency, expand trade, improve debt sustainability and mitigate environmental, social and corruption risks the BRI could be China’s biggest downfall.

Though currently the outcomes of the exports from African states still remain a minimum, with a classic example in Kenya, South Africa, Egypt, and Morocco[8]. The trade policies between China and Africa is still very restricted[9]. The export and import taxation still remain a challenge almost quarter of a decade later between the two continents. Thus fortunately, China appears to have taken a more local based approach to improve the African Nations poverty level. This is unlike the hostile take-over approach the US has adopted showcased in the USA-Israel mobilization situation that still continues to cost the western nations presently[10].

Hence China’s current tactic can ensure the continent prospers instead of diminishing their natural resources without a sustainable plan. China has also adopted a premium product requirement which will incentivize Africa to rescale their workforce to be able to meet the professionalism and product expected from 1st world countries[11].

Alike all investment principles the greater the risk the bigger the gain can be. Thus, even with high potential threats it opens a portal for many massive opportunities. With that the Chinese culture also leans towards investments that have long-term gain rather than short term returns evidenced by their footprint on Africa and history.

To be continued in Volume 4: Reviewing Russia’s Chairmanship in 2020 on the path to forging synergies


Shirley Chan

Section Editor

Africa

For more reference read the previous Volumes:

Vol 1: Reviewing South Africa’s trembling leadership in light of its BRICS’s role representing voices of the African Union

Vol 2: To be continued in volume 2: How will South Africa’s Africa agenda interlock with other

commitments to South-South and trilateral cooperation, the G20 and BRICS Brazil?


SOURCES

[1] https://qz.com/africa/1718826/the-african-countries-not-signed-to-chinas-belt-and-road-plan/ [2] Simelane, Thokozani, and Lavhelesani Managa, eds. Belt and Road Initiative: Alternative Development Path for Africa (South Africa: Africa Institute of South Africa, 2018) [3] Wenxian Zhang, Ilan Alon, , and Christoph Lattemann China's Belt and Road Initiative : Changing the Rules of Globalization (Palgrave Macmillan US :Imprint: Palgrave Macmillan 2018) [4] https://www.odi.org/events/4636-financing-future-belt-and-road-africa/ [5] De Soyres, Francois; Mulabdic, Alen; Ruta, Michele Common Transport Infrastructure : A Quantitative Model and Estimates from the Belt and Road Initiative. Policy Research Working Paper; No. 8801. (World Bank, Washington, DC. World Bank 2019) [6] Gu J, Shankland A, and Chenoy A, The BRICS In International Development (Palgrave Macmillan UK :Imprint: Palgrave Macmillan 2016) [7] Mogopodi Lekorwe, Anyway Chingwete, Mina Okuru, and Romaric Samson China’s growing presence in Africa wins largely positive popular reviews (Afrobarometer Dispatch No. 122 2016) [8] Dossou, Toyo Amegnonna Marcel The impact of China’s one belt one road Initiative in Africa: the Evidence from Kenya (IDEAS Working Paper Series from RePEc, 2018) [9] Luca Bandiera Vasileios Tsiropoulos A Framework to Assess Debt Sustainability and Fiscal Risks under the Belt and Road Initiative Policy Research Working Paper; No. 8891 (World Bank, Washington, DC. World Bank June 2019) [10] The New Times Kigali Beijing Richard Ruhimbana One Belt and One Road Initiative Is Good for Africa ( All Africa 2017) [11] David ; A. ; Jones ; Hanzhen ; Liu Management of Chinese Foreign Direct Investment “One Belt, One Road" Across Eurasia to Africa and Europe Amidst Maritime Tensions in the South China Sea Region (国际关系与外交:英文版 - International Relations and Diplomacy, 2017, Vol.5(08), pp.486-500)

65 views0 comments

Recent Posts

See All

South Africa and Legislating for Autonomous Vehicles

By Tom Clapp Tesla, Apple, Kia-Hyundai, Ford, and Huawei have all begun work on, or plan to start developing autonomous vehicles (AVs) in the near future. [1] The process is complicated and capital-in

Comentarios


bottom of page