China’s Belt and Road Initiative and debt-trap diplomacy in Africa - By: . . | Dailytrust

China’s Belt and Road Initiative and debt-trap diplomacy in Africa

By Emeka Umejei, PhD

The Belt and Road Initiative (BRI) has been described as China’s most ambitious push for a dominant role in global geopolitics and trade.  The BRI was launched in 2013 by China`s President Xi Jinping as One Belt One Road (OBOR) until 2016. On March 28, 2015, the official guideline for the initiative was issued by the National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs (MOFA) and the Ministry of Commerce (MOFCOM) of the People`s Republic of China (PRC), with authorisation of the State Council. The overarching goal of the BRI is to promote interconnectivity and partnership among countries on the maritime silk road. It builds upon the ancient silk road with a major focus on countries in Asia, Eastern Africa, Eastern Europe and the Middle East. The US-based Council on Foreign Relations estimates there are about 139 countries that have signed up to the BRI. It also estimates the GDP of the 139 including China at 40 per cent of global GDP and comprising 63 per cent of the  world’s population living with those countries.

The BRI is underlined by five components: policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds. “Policy coordination” is aimed at encouraging countries to collaborate and cooperate with one another to achieve projects. “Facilities connectivity” is concerned with building facilities to engender connectivity among countries on the Belt and Road. This also involves the construction of massive infrastructure projects such as ports, highways, and railways, and the deployment of fiber-optic lines among countries along the BRI. “Unimpeded trade” focuses on China’s attempt at encouraging trade and investment and enhancing economic integration among countries along the Belt and Road. “Financial integration” seeks to encourage monetary and financial integration and currency exchange among countries along the Belt and Road, while “people-to-people bonds” seeks to enhance cultural exchanges, friendly interaction, and deeper cultural understanding to build international cooperation. These focal points are geared towards achieving three fundamental objectives: to explore drivers of global growth in the post–Great Recession era, to rebalance globalization, and to create new models for regional cooperation in the twenty-first century. With connectivity as its central objective, the COVID-19 pandemic has resulted in the ramping of other components of the BRI such as the Digital Silk Road (DSR) and the Health Silk Road (HSR). DSR is a digital component of the BRI through which China seeks to expand its digital footprint in Africa and countries along the BRI, while the HSR is focused on providing medical assistance to countries along the BRI. This has manifested in the forms of China’s “vaccine diplomacy” and “mask diplomacy” platforms that have enabled it to provide vaccine assistance to 53 countries.

The BRI in Africa

The African continent is one of the major destinations of the Belt and Road Initiative. It is estimated that about 49 African countries have signed up to the BRI with 22 in West Africa, 12 in East Africa, nine in North Africa and six in Southern Africa. In 2020, the African Union and China signed an agreement to promote the Belt and Road Initiative in Africa making it the first of such agreements between China and a regional international organisation to jointly promote the BRI. However, a few countries on the African continent are yet to sign up to the BRI including Eritrea, Benin, Mali, Sao Tome and Principe and Eswatini (Swaziland).

Five emerging trends cut across BRI projects in Africa.  The first is that China is focusing investments in ports and areas on the coastline of African countries. For instance, among the 49 countries that have signed up for the BRI, 34 are on the coast of the continent with 16 in the west, 8 in the north and the east and two in the south. Some of these include Djibouti, Port Sudan, Port Said-Port Tewfik (Egypt), Port Ain Sokha (Egypt), Zarzis Port (Tunisia) and El Hamdania Port (Algeria). Also, China’s first overseas military base was built in Djibouti in March 2016. The BRI serves as a platform that interconnects China’s industrial, energy and infrastructure projects on the coastline of African countries. Thirdly, BRI projects have had limited benefits to the ordinary African people. Analysts at the ORF estimate only around three per cent of Chinese projects, in healthcare and education, provide direct benefits to the local population and these projects have only happened in Seychelles, Ghana and Comoros.

Fourthly,  China has succeeded in building transnational projects in Africa “only where there is either a deficit or vacuum in strong governance across countries”. Lastly, China has made little progress in working with third-partners-countries in building specific projects in Africa. There are only two instances where this has happened: a trade agreement with Spain to invest US$14 billion in the Democratic Republic of Congo, and with Italy on a water diversion project in Chad and on the Puntland Airport construction project in Somalia.

BRI as debt-trap diplomacy in Africa

The BRI has been criticised for serving as a platform for China’s debt-trap diplomacy in Africa. Critics claim that China provides opaque loans for infrastructural projects on the African continent and latches on it to extract economic, political and military capital from African governments. The debt-equity-swap involving Sri Lanka’s Hambantota port, through which China exchanged Sri Lanka’s $8 billion debt for a 99-year lease of the Sri Lankan port in 2017, is often cited to buttress this claim. In Africa, there are fears Uganda will lose the Entebbe airport to China because the Ugandan government waived international immunity in the agreement it signed to secure the loans, exposing Entebbe International Airport to take over without international protection. Also, Zambia is estimated as China’s largest debtor. New data estimates that Zambia is indebted to China to $5.05 billion an equivalent of 30 percent of the total external debt and approximately 20 percent of Zambia’s GDP. These instances informed the apprehension in Nigeria when the Nigerian House of Representatives raised the alarm that Nigeria waived its sovereignty to access a loan of $500 million from China for the financing of rail projects in the country. The hearings at the House of Representative, which has in attendance Rotimi Amaechi, the Nigerian minister of Transportation, brought to the public domain undercurrents of China’s project funding on the BRI. Amaechi explained that waiving aside Nigeria’s sovereignty does not amount to sacrificing the country’s immunity but normal practices in contract financing:

The developments in Uganda call to question Rotimi Amaechi’s assertion that “China cannot come and take over Aso rock”. Lack of transparency is one of the major challenges confronting Chinese loans and project financing on the BRI in Nigeria and much of Sub-Saharan Africa. The secrecy surrounding Chinese loans for projects on the BRI in Nigeria and much of sub-Saharan Africa suggests that something is fishy about these projects or the loans. If the detail of Chinese loans is accessible to the Nigerian public, there won’t be allegations of debt-trap diplomacy. The solution is for China and their Nigerian collaborators to publish the detail of the loans for public consumption. It could be published on the website of the Federal Ministry of Information and National Orientation; this will go a long way in dissuading Nigerians that China is coming to take over Aso Rock or any other national asset. The transparency should not end on the Nigerian side, the Chinese government (Exim Bank) providing these loans should publish the detail on their website(s) so that journalists and scholars can access and engage with it. If China and its local collaborators in Nigeria and much of Africa elect to keep Chinese loans opaque, allegations of Chinese debt-trap diplomacy will continue to gain currency on the African continent.

Umejei teaches at University of Ghana, Legon, Accra, Ghana

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