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Africa’s constructive engagement with China

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A remarkable group photograph of the President of China, Xi Jinping, with African Heads of State or Government the other day was an indelible image at the just-concluded 2018 Forum on China-Africa Cooperation (FOCAC) in Beijing, which depicts a new geopolitical order threatening to displace the colonial legacy of Africa.

The objectives of the summit were advertised as: Equal consultation, enhancing understanding, expanding consensus, strengthening friendship and promoting cooperation. Given the complex and ideologically driven previous international architecture of foreign aid and loans as a manipulative mechanism, these objectives present a very attractive methodology for access to capital and assistance for African countries.

A close observation of China’s geo-political ambition to become a superpower it is striving to achieve, provides us with a contextual background to how a global investment and lending programme can exponentially increase influence and control in our continent. That in a way is a reason to proceed with an abundance of caution. Indeed, the charge has been laid that China’s aid programme amounts to ‘a debt trap for vulnerable countries, fuelling corruption and autocratic behaviour in struggling democracies.’

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China’s foreign aid programmes started in the 1950s and were set up initially with important principles that deviated from the traditional approach of Development Assistance Committee (DAC) donor countries that hitherto had dominated the international aid architecture that developing countries were subject to. The bipolar construct in international relations that governed the world from the 1950s till the 1970s meant that the principle of non-conditionality led to the rapid expansion of Chinese aid and a direct challenge to the institutional transparency framework that DAC countries utilised widely to achieve strategic goals embedded in foreign aid.

The increase in Chinese development assistance was initially predicated on the acquisition of natural resources and coincided with the commodity boom period where Africa actually had a trade surplus with China. The global recession of 2008 presented an additional significant opportunity, which China utilised in further expansion of its economic assistance model of cooperation.

On the home front, we have witnessed a breathtaking increase in the range and scope of influence of China in Nigeria, especially in the execution of infrastructure projects. President Buhari at the same FOCAC summit announced that, “Nigeria had gained from China with the execution of $5 billion worth of infrastructure projects in the last three years of his administration.” He went further: ‘These vital infrastructure projects synchronize perfectly with our Economic Recovery and Growth Plan and some of the debts are self-liquidating and our country is able to repay loans as and when due in keeping with our policy of fiscal prudence and sound housekeeping.’

We are very familiar with the narrative of fiscal prudence that was deployed in our previous journeys to unsustainable foreign debt as a nation. While supportive of accessing foreign capital and expertise to provide critical and much needed infrastructure, we remain very concerned that our public debt indices are all pointing to the potential mortgaging of our collective future.

It does appear that we are on the cusp of another emerging debt crisis in Africa and China’s role has been called into question with routine accusations of “debt-trap diplomacy” or in other words, intentionally miring supposed partners in unsustainable debt-based relationships. The question, which we need to ask is: are China’s own economic and geostrategic interests maximised when its lending partners are in distress? The answer is more likely to be affirmative in western countries and may be more rooted in anxiety about China’s rise as a global power than the actual reality.

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We, however, urge circumspection as the recent example of Zambia serves as a cautionary tale. Zambia is currently defaulting on its loans with China set to take over the national power utility ZESCO in the country. They are also set to take over ownership of Lusaka International Airport. China is not a country you would wish to default on loans with. Further afield, the Chinese built and financed the strategic Hambantota Port in Sri Lanka. Unable to service the debt, the Sri Lanka government has just been forced to sign over a 70 per cent stake in the port to China for a 99-year lease.

China is also under increasing pressure to conform to international lending standards and is in an escalating trade war with the United States. Throw into the mix China’s attempts to manage its own huge domestic debt, which has ballooned from $6 trillion in 2008 to $28 trillion at the end of 2017 and what you have is a lender that will be unforgiving if macro-economic conditions deteriorate.

In the main, our caveat is quite simple: Nigeria’s needs to engage the artful China resourcefully and ensure optimal returns on that relationship. We need to move beyond just accepting these loans and ensure we utilise them wisely. Let us strike good deals and present ourselves as bargainers and not beggars. We should bear in mind that in international relations, there are no altruistic gestures and Nigeria’s interests must always be protected. That way, most African countries would draw some inspiration from Africa’s richest and most populous black nation on earth.


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