Forum on China-Africa Cooperation (FOCAC) 2018 meeting in Beijing, China. Photo: MFA-China

… This contrast is indeed important in understanding why the rise of China as a Southern power mattered to the African continent and its position in the evolving geopolitical landscape. Indeed, there is no denying China’s contribution to the rapid economic growth witnessed in many African countries over the last two decades.

Besides the fact that Chinese ascendancy brought with its additional options for African leaders to access different forms of development finance and trade opportunities, it also changed the contested policy space as it arguably expanded the policy space on various global fronts with long held ideas from the Bretton Woods Institutions becoming more contested.

Indeed, for Africans the contrast could not have been starker. Whereas on the one hand it was splashed across a well-known Western publication as a hopeless continent, on the other side of the world the Chinese state was rolling out the red carpet for over forty African leaders at Ministerial and Heads of State level in Beijing.

China was thus looking at Africa from a broader perspective, rather than from a narrow aid perspective. It was preparing and encouraging its companies and policy banks to go into the continent and find opportunities for investment, trade, and development finance. The Belt and Road Initiative (BRI) thus follows a list of grand programmes initiated by the Chinese state as it grows its global footprint.

However, rather than being targeted towards a particular geographic location as in the case of FOCAC, the BRI is arguably China’s largest initiative to date as the country grows increasingly confident on the international landscape.

 With the African continent, especially along the Indian Ocean perimeter forming an important part of the route of the BRI, it will be important for African stakeholders to prioritise sustainable projects that serve as catalysts for African development priorities such as creating regional value chains, enhancing the industrial base of the various regional economic communities, and enhancing intra-regional trade across the continent. 

 Where does Africa Fit? Advancing the Continent’s Priorities through the BRI

 Recent years have seen efforts by the African continent to exercise more agency and ownership in pursuing its development efforts. This aspiration is captured in Agenda 2063, efforts on the African

Continental Free Trade Agreement (CFTA), and priorities articulated in the report on the proposed recommendations for the institutional reform of the African Union, otherwise referred to as the Kagame Report (Kagame, 2017), which was presented to the 31st Summit of the AU in 2018.

What these initiatives have in common is a contemporary effort to identify and act on African priorities, and thus spearhead an endogenous development effort on the continent. If African countries, especially those that wield greater influence on the continent prioritise the identified areas in Agenda 2063, they will create greater cohesion in the continent’s international relations, enhancing African agency in partnering with China and other countries along the Belt and Road. 

 Much of the funding for the Belt and Road Initiative (BRI) comes from policy lenders, with the more prominent policy banks including the likes of the China Development Bank and the Export-Import Bank of China (Exim Bank), which have committed over $1 trillion. There is also a Silk Road Fund, which holds $40 billion in investment funds and is supervised by China’s Central Bank.

The Asia Infrastructure Investment Bank is also an important player and has a capital base of $100 billion. Additional funds can also be made available through China’s foreign exchange reserves and sovereign wealth fund, which hold $7 trillion and $220 billion, respectively (Nantulya, 2019). Advocates of the BRI point to the potential increased private Chinese investments in tourism, real estate, and agriculture, alongside infrastructure projects.

The BRI is also increasingly seen as a catalyst for African regional economic integration and competitiveness as seen in research funded by the United Nations Economic Commission for Africa, which found that East Africa’s exports could increase by as much as $192 million annually if new BRI projects are used diligently (Nantulya, 2019).

At a time when the African Continental Free Trade Agreement has been adopted and is now at the implementation phase, it will be important to ensure that the BRI improves regional connectivity and intra-Africa trade. Because of its strategic geographic location, East Africa has become an important node in the Maritime Silk Road, connected by a series of planned and completed ports, pipelines, railways, and power plants built and funded by Chinese companies and lenders.

The standard gauge railway, which connects Mombasa to Nairobi, is the biggest investment in Kenya since independence and is one of the flagships BRI projects in East Africa (Nantulya, 2019).

The African continent is thus strategically located along Beijing’s important supply lines, ensuring the existence of mutual interests. Indeed, as the Indian Ocean grows in importance, it is imperative that African countries and regional economic communities ensure that they safeguard the continental and maritime space in a manner that enhances their development interests.

While the positive attributes of participating in the BRI are clear for various stakeholders, it is important for African countries to continue to learn by doing and learn from experiences in the field in order to continue to seek an ongoing partnership that benefits all sides in a mutual manner.

The aim is thus to maximise the positives while minimising the potential negatives and creating spaces for honest multi-stakeholder engagement in addressing any potential negative impacts. The above has also made abundantly clear why Africa, from a geopolitical and geo-economic perspective matters to the overall success of the BRI. This mutual interest must thus work as a catalyst to building sustainable partnerships that meet Africa’s development aspirations. 

 The World Bank estimates that Africa needs up to $170 billion in investment a year for 10 years to meet its infrastructure requirements. The African Development Bank has posited that if Africa positions itself well, it can source some of this from the BRI and channel it to the African Union’s infrastructure master plan, the Programme for Infrastructure Development in Africa (PIDA) (Nantulya, 2019). However, it is equally important to understand that while African countries, especially those along the Indian Ocean perimeter, will be important for China’s strategic calculations, there will be no automatic flows of capital from China.

Indeed while some projects will be seen to have more than just an economic rationale for China, factoring in geopolitical calculations, many of the projects financed  will have to be of a sound nature and seen to be profitable over the medium to long term, especially following greater scrutiny of BRI projects and President Xi’s recent rhetoric on quality, transparency, and sustainability during the recent BRI Forum in Beijing.

Indeed, given the importance of Central Asia and Southeast Asia for China’s strategic calculations, it will be important for African countries to look towards greater co-ordination of their efforts through the African Union and the Regional Economic Communities. Risks associated with large infrastructure projects could be shared through better coordination and supporting projects with a regional footprint, in line with Agenda 2063.

 Agenda 2063, which sets out to outline ‘The Africa We Want’ has developed its first ten-year implementation plan under the theme ‘A Shared Strategic Framework for Inclusive Growth and Sustainable Development’, covering the years 2014-2023 (AU Commission, 2015a). This plan was adopted in June 2015 as a basis for the preparation of medium-term development plans of member states of the Union, the Regional Economic Communities and the AU Organs. The document identifies priority areas, their associated targets, expected outcomes and indicative strategies to stakeholders; while highlighting the fast track programmes and projects that will bring wins and generate sustained interest by the African citizenry in the African Agenda (African Union Commission, 2015a).

*END OF PART TWO. LOOK OUT FOR THE LAST PART OF THIS SPEECH NEXT WEEK*

The speech was delivered by Dr. Philani Mthembu – executive director of the Institute for Global Dialogue during the just-concluded Eighth Meeting of the China-Africa Think Tanks Forum in Beijing, China.

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