In the early 21st century, China positioned itself as an emerging economic powerhouse, assuring the global community that its ascent would be ‘peaceful’. Fast forward approximately twenty-five years, China has amassed significant economic and military capabilities but has resisted adhering to the international norms established post-World War II. This defiance has been particularly evident in its regional interactions, where it has occasionally exhibited hostility towards India and several Southeast Asian nations, including the Philippines, Japan, and Vietnam. However, the focus here is not on China’s regional conduct but rather on its strategic exploitation of politically vulnerable African nations, which is integral to its growth narrative. The foundation of Sino-African relations is rooted in a shared history of resistance against Western colonialism, which has significantly hindered Africa’s development. Since the initiation of China’s Belt and Road Initiative, the economic aspect of this partnership has been emphasised, with China presenting itself as a partner in Africa’s development. Nevertheless, reports from various African countries depict a starkly different reality, revealing an imbalanced relationship that heavily favours China and leads to numerous challenges for African nations.
How China Invests in Africa?
China’s investment in Africa, which began in the 1980s, has significantly intensified since the 2000s, particularly alongside the Belt and Road Initiative. The Tanzam railway project, China’s inaugural infrastructure endeavour, was completed in Zambia during the 1970s, facilitating easier copper exports for Zambia by allowing shipments directly to the port at Dar-es-Salaam instead of routing through South Africa. As previously noted, China’s investments in Africa surged during the 2000s. Currently, it is estimated that around one million individuals of Chinese descent reside in Africa, where over 1,000 Chinese enterprises operate. Prior to the onset of the coronavirus pandemic, China had invested approximately 44 billion US dollars in foreign direct investment (FDI) across the African continent.
The Democratic Republic of the Congo, Zambia, Angola, and South Africa rank among China’s primary commercial allies in Africa. Excluding Ethiopia, which also maintains a significant economic partnership with China, these nations are endowed with abundant natural resources. Approximately thirty percent of China’s investments are channelled into infrastructure development, while a remarkable twenty-five percent is allocated to mining and extraction activities. Although these percentages may appear modest, it is crucial to note that around 30% of China’s construction industry’s revenue is generated from its African operations. China has undertaken the construction of roads, railways, dams, and hydroelectric projects in at least 35 African nations where it has established a presence. The telecom sector has recently emerged as a focal point for China’s infrastructure spending; Chinese firms such as ZTE and Huawei are actively engaged in the development of 5G networks across the African continent.
China constructs stadiums in regions where it does not engage in substantial infrastructural investments, such as road or railway construction. During the late 1980s and early 1990s, there was a notable rise in the establishment of new stadiums across Senegal, Mauritania, Mauritius, Kenya, Rwanda, Niger, Djibouti, and the Democratic Republic of Congo (formerly Zaire). However, the past decade has witnessed a significant increase in such projects. Countries like Equatorial Guinea, Gabon, and Angola, which recently hosted the African Cup of Nations, have had stadiums specifically built by China for this event. Each of these nations is governed by a small elite linked to the ruling family and possesses substantial offshore oil reserves. Aside from minimal stadium infrastructure, these locations often lack adequate access roads or similar facilities. Experts suggest that China constructs these stadiums as a goodwill gesture to assert its presence in African countries. Local leaders promote these developments as their achievements, while China gains support in international forums, such as the UN, on matters concerning Taiwan and the South China Sea.
How Chinese Investments Impact the Exchequers of African States?
Between 2000 and 2020, China reportedly became the leading creditor for several African nations, providing a total of USD 59.87 billion. Notable beneficiaries included Angola (USD 42.6 billion), Ethiopia (USD 13.7 billion), Zambia (USD 9.8 billion), and Kenya (USD 9.2 billion), as reported by Africa Daily. However, these countries are currently facing challenges in repaying their debts. The depreciation of African currencies, coupled with a significant rise in interest rates in the US and other global economies over the past year, has exacerbated the situation. Consequently, the costs associated with loans denominated in US dollars and other foreign currencies have surged. According to Chatham House, 22 low-income African countries are presently experiencing severe financial crises.
The narrative of the debt trap is evident in various regions globally, including Central Asian countries, Pakistan, Sri Lanka, and Laos, where governments are finding it increasingly difficult to repay their debts to China. Citizens in these economically challenged nations are shouldering a significant financial burden due to the extensive infrastructure projects that China promotes as “roads for development.” A notable example is Zambia, which defaulted on its payments to China. In Kenya, the government halted salary payments for thousands of state employees, citing the necessity to conserve funds for servicing foreign debts, predominantly owed to Chinese creditors. The Chief Economic Advisor to the President of Kenya remarked on X (formerly Twitter): “Default or salary? Take your pick.”
Conclusion
The economy has always been inextricably linked to the geopolitical aspirations of nations. Whether it was colonial imperialism or the Cold War, the economy served as a central tenet in shaping relations between countries. Countries from the Global South have been expected to play a constructive role in fostering development within their partner countries. However, China has chosen to deviate from this expectation in its dealings with African nations, who had entrusted the dragon state with their development. A comparative analysis of Chinese investments in Africa with those of other development partners, such as the European Union and India, reveals that China’s approach primarily serves its own interests.
In contrast, Africa’s other partners, including the EU and India, have adopted a more holistic and people-centric approach aimed at empowering African citizens. The political elites of many African countries are beginning to recognize this distinction. Consequently, Chinese investments in Africa have seen a significant decline in recent years. Nevertheless, there are still numerous African nations trapped in China’s grip, resulting in substantial economic harm and a crisis of sovereignty. The data from the past decade underscores the need for caution regarding China’s ambitions in Africa.
