By Sonny Atumah
African leaders converged on Beijing, China from September 3-4, 2018, for the Forum on China-Africa Cooperation, FOCAC. This is the third time the summit was held since it was launched in Beijing in 2000. The Chinese President Xi Jinping promised US$60 billion in both aids and loans to the African continent. The zero interest loans are to fund infrastructure investments in Africa.
Xinping also announced US$60 billion assistance at the second summit in Johannesburg, South Africa in 2015. The Chinese said had plans to address infrastructure deficits, funding shortage and lack of professional and skilled personnel in Africa.
The after effect of the Cold War was that Africa with abundant raw materials was seemingly abandoned. European powers practised imperialism in the form of overseas territorial annexation, expanding into Africa, Asia and the Pacific. The economic imperatives of states are to dominate others by acquiring raw materials to expand their economies, or to find outlets for surplus capital and markets for surplus goods. After the World War II, the United States exerted considerable influence over Third World countries as a result of its national economic power and its dominance of international financial institutions including the World Bank and the International Monetary Fund, IMF. The Chinese have become tenacious to replace the western world in economic imperialism of the mercantile times.
The Chinese model has become complex and difficult for Europeans to understand and resolve. African leaders that assembled in Beijing believed that Africa owe more to China than the western powers who have been the traditional source of loans with stifling conditionality to Africa. For years Africa’s trade with Europe and the United States made marginal progress which China capitalized on for its industrial expansion. China’s trade with Africa has overtaken that of Europe and the United States. The United Nations Conference on Trade and Development, UNCTAD reports that the trade volume between Africa and China which stood at US$10 billion in 2000 rose to about US$300 billion by 2017. Chinese direct foreign investment in Africa has been on the increase. But whether the trade balances favour African countries is also debatable.
Is it good that African found an alternative in China to cooperate with in trade and development? It is difficult to believe that Africa which is the second largest continent of the world seven continents with an area of 30, 243, 910 sq km, covering 23 percent of the earth’s land mass, with vast natural resources and containing 14 percent of the world’s population would be without a care in the world. Experts believe that Africa was skipped in the trafficking globe because of looting by some leaders and managers. Africa accounts for about 30 percent of global oil and gas and other rare minerals reserves but sunk to the bottom in global manufacturing share of one percent only. Africa merely supplies crude to the world including the emerging markets of China and India. China with the largest population of 1.3 billion has become the global manufacturing hub.
Energy supply is uppermost in the strategic planning of China’s policy-makers as its domestic oil production declined. As the number importer of crude oil in the world China’s petroleum accounts for about 88 percent of its energy source. It is also battling with the problem of carbon emissions from fossil fuels making it to invest in nuclear reactors which low priced uranium content are sourced from Africa. Other sources of power are hydro, solar and wind that contribute 11 percent. In the last 20 years China became a big time player in about 20 countries, from Sudan to Angola and across Africa investing both in the upstream and the downstream sectors to power its growing manufacturing capacity.
As the single bilateral financier of infrastructure in Africa many are apprehensive of the unsustainable level of debt running into hundreds of billions of dollars sunk in projects that may not be of economic benefits. Under the Edwardo Dos Santos government in Angola, collateral for huge loans it obtained from China put at US$25 for infrastructure was its crude oil output. Angola supplies China 1.09 barrels per day, bpd, the second global supplier of crude oil after Russia. With any drop in crude oil prices servicing Chinese loans means that more Angolan crude oil would go to pot.
Although the Chinese charismatic leader, Xinping dispelled any conditionality attached, it is well known that China provides the funds, execute the jobs using Chinese firms, personnel and also reap the profits. Is Africa at the cross roads? Africa with 54 nations has become the beautiful bride for imperialistic economic advances. In the last three years all African leaders have been collectively summoned in the presence of leaders of the United States, Britain, India and China in Washington, London, New Delhi and Beijing respectively for promises to hand out grants and aids as well as good governance models. Is that the way to go to develop Africa?