On January 7, Chinese State Councilor and Foreign Minister (FM) Wang Yi returned from his four-day visit to Comoros, Kenya, and Eritrea in the Horn of Africa. According to the Chinese foreign ministry, the trip was part of a long-standing tradition. For 32 years now, it has been customary for the Chinese FM’s first overseas trip of the new year to always be to Africa.
Vice versa, Africa has historically held China in high regard. As a testimony of China’s importance to the continent, official Chinese figures show that China is Africa’s largest trading partner, with direct trade worth over $200 billion in 2019. In addition, Africa has also instituted mechanisms and dialogues in place with the Asian giant, such as the Forum on China–Africa Cooperation.
However, during his most recent new year meetings, Wang was put in the spot and forced to address African leaders’ concerns regarding its alleged malpractice of engaging in “debt trap” diplomacy in developing countries.
Wang argued that “the “debt trap” in Africa is not a fact, but a malicious hype-up by some people.” He slammed critics saying that “it is an ‘utterance trap’ created by those forces that do not want to see Africa speed up development,” adding that “if there is any “trap” in Africa, it is the “poverty trap” and the “underdevelopment trap,” which Africa should get rid of as soon as possible.”
This pointed questioning of China’s underlying economic and diplomatic intentions indicates rising doubts about China’s goodwill in Africa. While Africa’s criticism or questioning on the most recent trip may seem like an isolated incident as it is not as loud in its disapproval as the West is, displeasure in Africa has manifested domestically in the forms of protests and unrest for some time.
For one, Africa has been let down by China’s mistreatment of its environment and ecology. In September 2020, the World Wildlife Fund (WWF) released a report detailing the carnage. Chinese state-owned conglomerate Sudcam was alone held responsible for the removal of 25,000 acres of forestry to make way for a rubber plantation. Similarly, China COSCO Shipping Corporation Limited, one of the world’s largest shipping companies, has come under fire for its “heavy carbon footprint”.
Furthermore, a growing number of disconcerting reports of attacks against Africans and African-Americans in China emerged during the beginning of the COVID-19 pandemic, particularly in Guangzhou. Ignoring the fact that acts of racism have been perpetuated against African nationals, even those who have tested negative for the coronavirus, the Chinese foreign ministry issued a weak statement stating that all foreigners are “treated equally.”
While anti-China sentiment has burgeoned in Africa, there have been reports of violence against Chinese nationals on the continent. Last year, three Chinese nationals were murdered in the copper-rich, southern African nation of Zambia for socio-economic reasons. Tensions have been growing between the local community and the 80,000 Chinese nationals residing in Zambia as Beijing continues to make inroads into the country through various infrastructure projects. To make matters worse, it is known to employ its own labourers on the projects, instead of offering jobs to the local community, which has further hurt host nations.
More evidence of China's growing concern about the safety of its people in Nigeria. Yin Guohai from 🇨🇳's Min. of Public Security held talks this week w/ Yusuf Bichi, head of 🇳🇬's State Security Services about better protecting Chinese natls in the country: https://t.co/IkpqfmfPPv pic.twitter.com/bfa8gcpFli
— The China Africa Project (@ChinaAfrProject) January 13, 2022
Moreover, the enormous debts that African nations have been accumulating through the largescale infrastructure projects being sponsored by China has left many dissatisfied. President Xi Jinping’s ambitious Belt and Road Initiative has arguably compromised the sovereignty of multiple low-income countries, particularly in Africa.
China’s loans to Africa amount to roughly $160 billion, most of which has gone towards infrastructure projects. However, the money is loaned at high-interest rates, which forcefully increases and extends Africa’s dependence on China. For instance, Djibouti’s debt-to-GDP ratio rose from 50% to 85% after Chinese investment in 2014. In fact, it is estimated that around 20% of African government debt is owed to China; this figure rises to 44% in Zambia. In lieu of being unable to repay the mounting debt, African nations have been left paying in kind, thus ceding some degree of sovereignty to China.
A combination of these factors has sparked outrage in several African nations in recent years and leaders have taken steps most suitable to their situation. For example, Tanzania, Eswatini, Sierra Leone have rejected Chinese loans after deciding that the price was too high. Similarly, the Nigerian government ditched Chinese loans in favour of one from the United Kingdom-based Standard Chartered. Last year, the Democratic Republic of the Congo called for a review of mining contracts signed with China in 2008 on the basis that it was a strain on its finances. Kenya and Ghana have also terminated their multi-billion projects funded by the nation.
However, all said and done, Africa seems to have entrapped itself into a vicious cycle of piling debt. As per available data, Africa’s combined loans to China exceed $140 billion, which is going to take years to repay, given the high-interest rates. Moreover, while China has been pressured by global lending institutes, such as the World Bank, to “fully” participate in debt relief efforts, it has often said that Africa’s loan situation is “complex,” which makes debt cancellation harder. In 2020, Beijing had also committed to the suspension of debt repayments for as many as 77 nations, including many in Africa, but refused to publicly clarify details and later, even showed hesitancy in formulating a plan for the same.
To ease this dependency, Africa does have other options in form of the United States (US) led Build Back Better World (B3W) Initiative and the European Union’s Global Gateway Initiative. However, their presence on the continent has a lot of catching up to do with China, who has been building its base in Africa for almost two decades.
Moreover, the B3W is a “values-driven” approach. This means that as opposed to China’s traditional infrastructure funding approach, the West’s initiatives will aim to hone human infrastructure as the core of its global development ambitions. If it plans to outbid China, channelling funds toward social spending and human capital development is not the best way to go. The value-based route, while constructive in the long run, will be unable to compete against the more instant and tangible gains that China has to offer, such as the development of ports, roads, dams, railways, power plants, and telecommunication facilities.
Likewise, the B3W also faces funding challenges. The G7 communique commits each of its members to mobilise substantial private capital for its infrastructure investments. This poses a challenge due to perceived risks in developing and emerging economies, such as fragile rule of law and macroeconomic instability, in addition to environmental, social, health, and safety hazards.
Given these drawbacks, it seems unlikely that Africa is going to be able to rid itself of Chinese dependency any time soon. But having said that, it is still likely that the B3W will offer significant gains in human and environmental welfare in the long run. Africa must try to contain the damage already wrought by corrupt Chinese lending practices before it loses more than just financial resources in the bargain.