writes Uche Igwe
Africa-Press – Eritrea. China continues to invest in the African continent, promising win-win development. However, if African leaders come together and speak with one voice, they can improve their bargaining power with China.
The Chinese Foreign Minister, spent the first week of the new year visiting African countries. During his tour, he stopped off in Namibia, the Republic of Congo, Chad, and Nigeria. The trip supports President Xi Jinping’s promise of elevated strategic relationships between China and all African countries announced in September 2024. This will deepen cooperation, advance the so-called win-win partnership and implement some of the pledges that were made during The Forum on China–Africa Cooperation (FOCAC) last year.
The volume of trade between China and Africa continues to rise. In 2023, it reportedly reached £228.2 billion. China has been Africa’s largest trading partner for fifteen consecutive years. China is also Africa’s largest creditor. Chinese lenders account for 12 per cent of Africa’s private and public external debt. As of 2022, African countries owed China around £65 billion, with Angola, Kenya, Zambia and Nigeria accounting for 50 per cent of it. Chinese Foreign Direct Investment (FDI) has increased significantly over the last two decades. In 2022, the FDI flow from China to Africa rose to £4 billion, representing 4.4 per cent of the region’s total FDI. In 2024, the Chinese President pledged additional funding of £41 billion, including £8 billion in development assistance to support African projects in infrastructure, agriculture, industry, trade and investment.
A tour of natural resources
The destination of the Chinese Foreign Minister during the tour to Africa will be countries that are rich in natural resources – which is not surprising. It is not a revelation that the Chinese appetite for natural resources is the most important factor shaping the consolidation of its relationship with Africa.
Namibia is rich in crude oil and has become the new oil exploration hotspot. With several significant oil discoveries made in the country, projected to an estimated 11 billion barrels of offshore oil resources, Namibia may be on its way to becoming Africa’s fifth largest producer of crude oil. It also has significant deposits of lithium where a Chinese company Xinfeng is said to be investing.
The Republic of Congo is the fourth largest oil-producing country in sub-Saharan Africa, holding about 1.6 billion barrels of oil and producing about 2,000,000 barrels of oil per day. It also has abundant mineral deposits, although its mining sector remains largely underdeveloped.
Chad’s natural resource endowment includes petroleum, gold, silver and uranium, while Nigeria remains the largest producer of crude oil in Africa. Approximately 8 per cent of Africa’s mining output goes to China. In 2020, China imported a third of Africa’s minerals and metals worth about £13.4 billion. China is a dominant player in DRC’s mining sector, investing in 15 out of 17 cobalt mining operations in that country.
Resources and debt
China continues to promise to promote modernisation in Africa through a win-win partnership featuring cooperation and common development with mutual respect and non-interference. Beijing’s carefully crafted diplomatic slogan of a benevolent China that veils the rush to access Africa’s natural resources should be interrogated. China has helped provide many African countries access capital through a funding model that provides long-term project financing collateralized by future income from commodities. If the debts aren’t paid, China gets access to cheaper commodity prices. Critics insist that China’s renewed push is a debt-trap diplomacy designed to push African countries into debt to gain leverage over them. Such speculations call for improved scrutiny of proposals coming from China.
Financing infrastructure remains a huge challenge on the African continent. The African Development Bank (AfDB) estimates that between £105 billion and £138 billion is needed each year and there is a gap of between £55 billion and £85 billion. As the largest supplier of infrastructural finance, China’s infrastructural investment is beneficial in bridging the infrastructural gap on the continent.
There is an urgent need for strategic calibration in the partnership, especially on the part of Africa. This move could contribute to achieving the mutual progress proposed by China. There is no coherent documented approach to how Africa and African countries will engage China. This gap continues to weaken the voice and bargaining power of the continent. African countries should consider negotiating with China as a bloc with a collective vision and strategic approach. In addition, investment in value chains should be sought. The visit of the Chinese Foreign Minister and the renewed push for alliance from China offers another opportunity for African nations to reposition for a more impactful engagement and value-added partnership.
LSE
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