China’s ‘warm embrace’ not in Africa’s best interest

First Published in Business Day on   February 2nd, 2023   |   by   Gracelin Baskaran

China’s ‘warm embrace’ not in Africa’s best interest

China’s approach to Africa has been more transactional while the US has focused more on aid and unilateral trade benefits

In recent weeks the spotlight has fallen on Africa’s relationship with the US, China and Russia. Given a shortage of data and evidence in the rhetoric, the US has got the short end of that stick. This is part two of why (“Agoa shows US has successfully courted Africa”, January 26).  

I was at Addis Ababa’s Bole airport last week, and the growth has been impressive. I saw it in 2016 when it was a single terminal airport. I was there again in 2018, and as I was landing saw the construction of terminal two, with highly visible signage of the China Communications Construction Company. In 2019 Prime Minister Abiy Ahmed inaugurated that second terminal, and when I arrived last week it was so busy I struggled to find a seat to grab a beer.

It is true that the continent would not have developed the way it has without China, but it is hard to agree with fellow columnist John Dludlu’s observation that “in the past African countries have found the West, including the US, too transactional in its relationship with them. In part this is what drove some to the warm embrace of China”. (“Too little, too late for the US to counter China in Africa”, January 18).

Warm embrace? The Economist had a more accurate statement: “China may not be a duplicitous negotiator — but it is ruthlessly self-interested.” It cited research from William & Mary University: when analysing 100 contracts between Chinese entities and developing countries, there was a clear trend. Contracts were rigid and transactional — they included requirements that China had to be repaid before other creditors, use escrow accounts and had strict confidentiality clauses (hence, large levels of hidden debt).

One such example is financing the expansion of Uganda’s Entebbe airport, which I last visited in 2019. The deal with China stipulated that all revenue generated by the airport for 20 years must be used to repay the loan. This means Chinese lenders do not just collect revenues from the expansion project, but from the entire infrastructure asset.

Bole airport expanded because of Chinese financing, and now it has become one of Africa’s busiest airports and enabled the growth of Ethiopian Airlines. But has the West been purely transactional? The evidence says it has been more about giving than receiving, though the past five US administrations have taken different approaches to engagement with the continent.

Bill Clinton signed the African Growth & Opportunities Act to give sub-Saharan African countries duty-free access to the US market, which single-handedly built a private sector in a number of countries and generated more than 1-million indirect and direct jobs. It’s a unilateral programme, so benefits are heavily skewed in favour of Africa.

George Bush launched the President’s Emergency Plan for Aids Relief, a public health intervention that saved more than 10-million African lives. Some call it the single most significant public health intervention — particularly given Thabo Mbeki’s approach to HIV management.

Barack Obama launched Power Africa to double access to electricity in Sub-Saharan Africa. It has closed over 120 transactions, which provided 11,000MW of power.

Let’s leave Donald Trump out of this until someone finds his imaginary “Nambia” on the map. 

Joe Biden recently hosted the US-Africa summit, has committed to more than $55bn to the continent over the next three years, and has strongly advocated for the AU to become a permanent G20 member.

Biden has long been an ally. In 1986, when he was a US senator and fierce apartheid critic, he pounded his fist on the table at a Senate foreign relations committee hearing and berated George Shultz, who served as secretary of state under Ronald Reagan, for supporting the apartheid regime. “I’m ashamed that’s our policy. I’m ashamed of the lack of moral backbone!”

Of course, Beijing was a supporter of African liberation from the time of colonial rule. On the other hand, it stood by as hundreds of thousands of Africans were slaughtered in Ethiopia in 2022.

There is compelling evidence of China’s transactional approach. Angola is the biggest recipient of China’s concessional lending to Africa, borrowing $42bn between 2000 and 2020. Perhaps incidentally, it is also the continent’s biggest exporter of oil to China. In 2021, 72% of Angolan oil went to China. Angola is now scrambling to leverage higher oil prices to pay off its debt to Chinese banks.

Looking at the numbers and the narrative reveals that the notion of China’s “warm embrace” of Africa is dubious at best. The Economist’s assertion that it is “ruthlessly self-interested”, is clearly more accurate. I’d add, sometimes at the expense of African countries.

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