China’s Friendship and Economic Partnership With Africa in 2021

HISTORIC NEWS FOR DR CONGO !

China and DRC sign MoU on Belt and Road cooperation

 

January 9, 2021, two useful articles from AfricanAgenda.net

HISTORIC NEWS FOR DR CONGO !

Chinese Foreign Minister to Visit Africa

Belt and Road Infrastructure Contributes to Africa’s Development: No ‘Debt-trap’

CGTN published my article below:  Belt and Road Infrastructure Contributes to Africa’s Development: No ‘Debt-trap’ on December 26 , 2020. In this article, I expose the fraud of the anti-China “debt-trap” slander being used to impede China’s and Africa’s collaboration to build vitally needed infrastructure across the African continent.

December 30, 2020

Belt and Road Initiative is not debt-trapping Africa

Editor’s note: Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. [He is the creator of the blog: lawrencefreemanafricaandtheworld.com.] The article reflects the author’s opinions, and not necessarily the views of CGTN.

Over the last three years, a new type of groupthink has emerged among many Western media and policy think tanks in their geopolitically motivated efforts to malign China. They’ve claimed that China is practicing a new type of colonialism, which is coined “debt-trap diplomacy.” China is charged with deliberately luring developing nations into borrowing-lending arrangements, primarily for infrastructure projects, with the intention of entrapping them into unpayable loans. It is alleged that once the borrowing nation defaults on “excessive debt,” China seizes the project or collateral assets of valuable mineral resources.

There is only one problem with this supposition. None of it is true. There has been no takeover of any project and no seizure of assets of any kind in Africa by China. There is no evidence of an intentional effort to trap African nations into owing debt to China.

To give an example of how manipulation of words is used to disparage the Belt and Road Initiative (BRI) in Africa, just look at Heather Zeiger’s article “China and Africa: Debt-Trap Diplomacy?” The article recognizes that Kenya is suffering from COVID-19 related financial stress and cannot fulfill the terms of the loan for the Standard Gauge Railway (SGR). However, she then attempts to make the case for debt-trap diplomacy by slyly using a conditional sentence: If Kenya defaults on payments, China might be able to receive revenue from the Port of Mombasa as collateral, although the Chinese government has said it does not intend to do this.”

The truth is, neither happened.

Johns Hopkins University’s China-Africa Research Initiative (CARI) has extensive data on Chinese lending in Africa. After reviewing over 1,000 loans, it reports that “we have not seen any examples where we would say the Chinese deliberately entangled another country in debt, and then used that debt to extract unfair or strategic advantages of some kind in Africa, including ‘asset seizures’.”

However, this has not prevented U.S. elected officials and representatives of Democratic and Republican parties from ignorantly reciting this debt-trap mantra. This propaganda is so pervasive that even some Africans have been repeating this disinformation.

Aerial photo shows trains at the Nairobi railway station in Nairobi, capital of Kenya. /Xinhua

African nations require infrastructure

China through the BRI is helping to finance and construct vitally needed infrastructure in Africa. Nothing is more critical or more urgently needed to industrialize Africa and end poverty and hunger than infrastructure. The United States, whose foreign policy is increasingly vectored at countering China’s rising political and economic power in the world, has no strategy or intention of making a similar commitment to the African continent.

W. Gyude Moore, a senior policy fellow at the Center for Global Development and Liberia’s former Minister of Public Works, has said that China’s investment in infrastructure in Africa is unsurpassed. And given the West’s history and operations in Africa, it is “frustrating that in its complicated, enmeshed, centuries-long history in Africa, there has never been a Western proposal for continental-scale infrastructure building … It was the Chinese who sought to build a road, rail and maritime infrastructure network to link Africa’s economies with the rest of the world.”

China helped finance and construct Kenya’s SGR, the only new railroad in 100 years since the British empire occupied Kenya at the beginning of the 20th century. The first phase of this ambitious project, from the port city of Mombasa to the capital Nairobi, is already completed. It is intended to connect to Uganda, Rwanda, South Sudan and Ethiopia. This has the potential to become the eastern leg of the long overdue East-West railroad across the girth of Africa, which would transform the continent.

China has contributed to the welfare of nations through the BRI. And for this, it should be supported, not pilloried.

Read: news.cgtn.com Belt-and-Road-Initiative-is-not-debt-trapping-Africa

 

US-China Relations: Cooperation Not Geo-Politics. All Nations Share A Common Interest

December 21, 2020

In my discussion with PressTV, (watch video below), I elaborate the potential for a positive-collaborative relationship with China that would benefit humankind, rather than the dangerous belief in geo-politics. Every nation shares a common interest; the development of all human beings. That must include an improvement in their physical living conditions, and in the nurturing of their creative mental powers. The geo-political doctrine, which the US has come to embrace, falsely asserts that relations between nations is reduced to winners and losers in in a zero sum game. This is not what the real America represents. It is not what I represent. The exploration of space, the development of nuclear fusion energy, and the elimination of poverty, are just a few examples of what could be accomplished with US-China cooperation, which is in my country’s interest. 

Watch my discussion: US-China Relations

 Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Biden Administration Must Break from Past Practices, to Collaborate with China in Fostering Economic Development in Africa

CGTN published an abridged version of my article under the title: Biden administration should work with China to boost growth in Africa. https://news.cgtn.com/news/2020-12-16/Biden-administration-should-work-with-China-to-boost-growth-in-Africa-WgaMXPhB0A/index.html

Read below my complete article entitled: 

Biden Administration Must Break from Past Practices to Collaborate with China in Fostering Economic Development in Africa

Lawrence Freeman

December 16, 2020

For the incoming Biden/Harris administration to make a real difference and have positive impact on the lives of hundreds of millions of African still living in poverty, they should work in partnership with China. This would require rejecting and reversing the anti-China mindset of the Trump and Obama administrations, echoed by the current chorus of voices spewing from officials of both the Democratic and Republican parties. A repeat of the defective policies of the last twelve years coupled by the shrill geo-political motivated propaganda against the nation of China, will not only do little for Africa, but it will also harm the United States, and endanger strategic relations. It should be obvious to qualified leaders, as it is to me, that the horrific conditions of life for a majority of Africans, reflects the scope of the continent’s deficit in vital infrastructure. Over 600 million are without access to electricity, over 400 million Africans live in poverty, and several nations are currently threatened with famine. If the two economic power houses, China, and the United States, worked in partnership with African nations, this impoverishment could be eliminated.

US President Donald Trump (L) and China’s President Xi Jinping speak during a joint statement in Beijing on November 9, 2017. (NICOLAS ASFOURI/AFP via Getty Images)

Failures of Trump and Obama

Presidents Trump and Obama similarly failed to understand the necessary requirements to create real-physical economic growth to improve the conditions of life, for America or Africans. Neither comprehend the principles of the American System of economics that built the foundation of the industrialized U.S. Their conception of economics remains dominated by a belief that the wealth of a nation is measured by Wall Street’s monetary values.

US President Donald Trump (L) and China’s President Xi Jinping speak during a joint statement in Beijing on November 9, 2017. (NICOLAS ASFOURI/AFP via Getty Images)

Trump began his presidency establishing an amiable relationship with Chinese President, Xi Jinping. Unfortunately, that quickly deteriorated as Trump propitiated the anti-China prejudices of his supporters.  Although President Trump’s road to the White House was achieved by his status as an outsider to the Washington establishment, it was evident by the second year of his administration that he had acquiesced to the same geo-political world view of his predecessors. Geo-political doctrine speciously asserts that nations are either winners or losers in a zero sum game with the world as a chessboard. That the only interest of a superpower is achieving hegemony, rejecting any conception of a shared common interest among nations. His choice of neocons, Mike Pompeo for Secretary of State, and John Bolton as National Security Advisor in April 2018, left no doubt the direction of President Trump’s foreign policy.

On December 18, 2018, speaking at the Heritage Foundation in Washington DC, Bolton unveiled President Trump’s so called Africa Strategy. In his presentation Bolton defined the goal of U.S. policy in Africa, to wit: stopping China’s advances on the continent. In less than an hour, he attacked China and its Belt and Road seventeen times.  President Trump did not disavow Bolton’s assault on China, nor his demeaning treatment of Africa as a game board for geo-politics. Read President Trump’s Non-African Strategy: Published in AU’s “Invest in Africa” magazine

Prior to President Obama’s anti-China Asian Pivot in January 2012, his administration launched the most destructive military operation against an African nation by any U.S. President. In October 2011, President Obama, advised by UN Envoy Samantha Powers, Assistant Secretary of State for African Affairs, Susan Rice and Secretary of State, Hillary Clinton, toppled the government of Libya. This irresponsible military adventure resulted: in the death of Libyan President, Muammar Gaddafi; the destruction of the nation of Libya, turning it into a failed state for the last nine years; and unleashing hordes of violent extremists across the Sahel into Mali, Burkina Faso, Niger, and Nigeria, causing tens of thousands of deaths and displacing millions of Africans.

Courtesy CSIS China Power Project

China Delivers Infrastructure

Contrary to U.S. squealing and whining about China’s influence in Africa, Deborah Brautigam of the DC based China Africa Research Initiative, precisely presents the paradox: “China still addresses Africa’s hunger for structural transformation in a way the West does not.” (1)  China has increasingly been engaged with African nations over the last two decades to build vitally needed infrastructure in rail, energy, ports, airports, roads, etc., and the U.S (West) has not.

Courtesy CSIS China Power Project

Take rail for example. Examine China’s commitment to building railroad tracks in Africa, as reported by the Washington think tank, Center for Strategic and International Studies (CSIS). (2)

Between 2008 and 2019, China built an average of 5,464 kilometers (km) of railway track per year. Roughly half of the new track added was high-speed rail. At 35,388 km, China’s high-speed rail network is the largest in the world.” China has built an additional 100,000 km of non-high speed rail track.

According to the CSIS report,

“Chinese companies signed $61.6 billion worth of rail construction contracts from 2013 to 2019 – more than double the value of the previous seven-year period (2006-2012) coinciding with the launch of China’s Belt and Road Initiative in 2013.”

“Africa received the second-highest amount of [China’s] rail contracts from 2013-2019. At $20.8 billion, this accounted for 33.8 percent of the total… About $7.5 billion worth of rail-related construction contracts (36.1 percent of the amount in Africa) were signed with Nigeria, where China is constructing a series of lines that comprise the 1,300 km-long Lagos-Kano Railway Modernization Project. This massive undertaking has made Nigeria the world’s top recipient of Chinese rail construction contracts during the 2013-2019 period.”

Courtesy of dica.logcluster.org

China’s construction of Kenya’s Standard Gauge Railway and the Addis Ababa to Djibouti railroad are exemplary of crucial infrastructure projects for Africa.

Michelle Gavin in her December 3 post, The United States and Europe Should Work Together to Promote a Prosperous Africa, expresses the dilemma for U.S.-Africa policy:

“There is no doubt that U.S. influence—and therefore U.S. capacity to achieve various foreign policy goals—suffers when China’s investments in the tangible, visible infrastructure of African prosperity appear (sic) to dwarf U.S. development efforts.” (emphasis added)

Speaking in China on December 8, Rahamtalla Osman, the Permanent Representative for the African Union in China, said, “The goals of the BRI coincide with the AfCFTA,” referring to the African Continental Free Trade Area.

The “Same Old” Will Not Do

As the inauguration of the new U.S. president nears, many words are written extolling how a Biden administration will bring a return to “normalcy, global alliances, international diplomacy.” We should think for a minute. Do we want to return to war, regime change, sanctions, and drone assassinations as the core of U.S. foreign policy? Early indications are that under a President Biden, the U.S. will pursue with our allies, a more belligerent policy with China. How will this realignment shift the world to a higher platform of development? How will it stimulate economic growth in Africa?

Presidents John F Kennedy and President Kwame, Washington DC, Head of State visit- March 1961.

The Biden-Harris agenda for Africa is vague with no specifics to address Africa’s urgent needs. Ambassador Linda Thomas-Greenfield, who is President Elect Biden’s nominee to be envoy to the United Nations, has a deep background in Africa and is respected by many African leaders. Having played a prominent role in the Biden transition team, she may be an individual who can put a focus on Africa in the new administration. However, it is unclear what those policies will be.

The last U.S. president to fully engage in Africa’s development was John F Kennedy, who established a personal relationship with Ghanaian President, Kwame Nkrumah, and gave crucial backing for the construction of the Akosombo Volta Dam complex.

For the incoming administration to genuinely support Africa, the new president should audaciously break from past boundaries of previous thinking and join with China in launching a great mission for mankind: the elimination of poverty in Africa within the next generation through massive infrastructure expansion. That is my mission.

(1) African countries will remain best friends with China, https://www.economist.com/the-world-ahead/2020/11/17/african-countries-will-remain-best-friends-with-china

(2) How Are Foreign Rail Construction Projects Advancing China’s Interests? https://chinapower.csis.org/rail-construction/

 Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Africa Development News: Ivory Coast and Ghana Move Forward With Infrastructure

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IVORY COAST: The government launches the construction of a hydro-agricultural dam in Koro

The Ivorian government has just launched the construction of a dam in the council of Koro in the northwest of Ivory Coast. The water reservoir on the Yirima River is intended for the development of agriculture in this part of the country.

“The realization of this dam will improve agricultural yields and ultimately, the income distributed to farmers. Its realization is therefore in line with the second phase of actions taken to accelerate the emergence of the Bafing region,” said Minister Moussa Sanogo.

 

September 9, 2020

China-Ghana cooperation thriving despite COVID-19:

The site of the upgrading project of Ghana coastal road in Accra Photos: Courtesy of CGICOP

China and Ghana are continuing to promote bilateral trade despite the COVID-19 pandemic, as the two sides actively push several programs ahead….

“Meanwhile, a 26-kilometer-long road project linking Ghana’s capital city Accra and Ghana’s largest port city Tema, one of the Belt and Road Initiative’s landmark construction projects, recently kicked off. ”

Read the full article: http://enapp.globaltimes.cn/#/article/1199432

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Trump’s Aid Cut Harmful to Ethiopia and All of Africa

Artist rendition of the completed Grand Ethiopian Renaissance Dam

August 6, 2020

Trump’s Aid Cut Harmful to Ethiopia and All of Africa

By Lawrence Freeman

President Donald Trump has instructed Secretary of State, Mike Pompeo to pull back from a commitment to provide $100 million in security related aid to Ethiopia, a leading developing nation on the African continent. According to the New York Times, the State Department indicated this would be a “temporary pause” on some aid in response to “Ethiopia’s unilateral decision to begin to fill [its] dam before an agreement was reached…” This action by the Trump administration is more than an outrageous encroachment of Ethiopia’s sovereignty. It is an assault on the right of emerging nations to take actions to improve the living conditions of their people.

In response to the decision by the State department, Eyob Tekalign, Ethiopia’s state  finance minister said correctly, “We don’t think that the U.S. has thought this through carefully…We are hopeful that they will reconsider because Ethiopia is doing what is absolutely right and in all senses of the word legally, morally as well.”

The Ethiopian people have funded the $4.6 billion Grand Ethiopian Renaissance Dam (GERD) themselves. This fulfills a bold vision to develop their nation with the 6,200 megawatts (MW) of electricity that the dam will generate when completed. Ambassador Fitsum Arega aptly expressed the desire of the Ethiopian population, when he tweeted, “we will pull Ethiopia out of the darkness,” which is literally and metaphorically true.

Trump’s Bias

All indications are that President Trump acted on the insistence of Egyptian President el Sisi, who has claimed “historical rights” to the Nile River. In truth he is asserting “colonial rights” to the Nile bestowed on Egypt by the British Crown.

At the end of 2019, at the request of President el Sisi, President Trump instructed Treasury Secretary Mnuchin to act as an independent broker in discussions with Sudan, Egypt, and Ethiopia. Over four months, several meetings of the three Nile riparian nations were held in Washington DC discussing the “fill rate” of the GERD. There are legitimate concerns about how much water would be withdrawn annually in the next several years to fill the GERD’s reservoir of 74 billion cubic meters (bcm) of water. Technical issues like the rate of which water should be withdrawn from the Nile to fill the reservoir should be resolved by the three nations with the understanding that a functioning GERD will benefit all the people living in the Horn of Africa.

The heavy rains at the beginning of Ethiopia’s rainy season this summer have already filled the GERD with the required 4.5 bcm of water to test two turbines. This was accomplished without any reduction in the flow of the Nile.

As the tripartite discussions, with the US Treasury and World Bank in attendance continued into February 2020, it became clear that the US was “putting its thumb on the scale” for Egypt, in the words of retired US Ambassador David Shinn. By the end of February, Mnuchin secured an “agreement” regarding the Nile with Egypt, without the participation of Ethiopian representatives.  On February 28, 2020, an official statement from the US Treasury Department praised Egypt’s “readiness to sign the agreement,” and instructed Ethiopia that “final testing and filling should not take place without an agreement.” For more information read my earlier post: Africa Requires Ethiopia Fill Its Dam.

Eventually, the unresolved issue of the Nile shifted to the proper venue for African nations to settle disputes, the African Union. The dialogue has continued under the personal supervision of South African President, Cyril Ramaphosa, Chairperson of the African Union.

The GERD is built in Ethiopia on the Blue Nile River, which supplies 85% of the Nile when it joins the White Nile north of Khartoum, Sudan

Bringing Africa Out of Darkness

What President Trump does not understand; is that his “pause” in aid is not only harmful to Ethiopia, but it is detrimental to the entire African continent. Whether he is aware of it or not, is establishing a dangerous precedent in foreign policy, and not just for Africa.

Ethiopia, with a population approaching 110 million, has made a commitment to eradicate poverty. To that end, Ethiopia has embarked on erecting significant infrastructure projects in roads, railroads, and hydro-electric dams. The GERD has the potential to generate over 6,000 MW of power, doubling Ethiopia’s present capacity, and placing Ethiopia only second to South Africa in energy production in sub-Saharan Africa (SSA). Ethiopia would also become an energy exporting nation potentially providing electricity to neighboring South Sudan, Sudan, Kenya, Somalia, and Tanzania.

The root cause of virtually every crisis that African nations are facing today, including ethnic conflicts, can be traced to underdevelopment. This is especially true when one examines the dearth of hard infrastructure in SSA with a population nearing 1.5 billion that is projected to reach 2.5 billion by 2050. Electricity for SSA is estimated between 100,000-130,000 MW. This level of output is criminally deficient for a population over 1 billion, with 600 million Africans having no access to online electricity. The lack of electricity is literally a death sentence for millions of Africans.  Is this not a form of genocide?

Without abundant and accessible electricity Africa will not progress at the level necessary to provide for its present, much less its expanding population. Energy is the sine qua non for economic growth, and to eradicate poverty. It is required for; agriculture, producing fertilizer, pumping water, cleaning water, transportation, lighting hospitals, vaccine production and storage, shipping food in refrigerated cars, powering industry, constructing and lighting modern homes, schools and libraries. For Africans to enjoy the same access to electricity 24×7, as we experience in modern nations, Africa needs a minimum of 1,000 gigawatts or 1 million megawatts of electricity.

Does anyone in the Trump administration, or any individual in the leadership of the Democratic Party think on this level?

President Franklin Roosevelt signed the Tennessee Valley Authority Act-TVA on May 18, 1933. (courtesy inthesetimes.com)

What Roosevelt Would Do?

Rather than being threatened with cuts in aid, Ethiopia should be supported in its bold efforts to build and operate the GERD. A thoughtful US policy would be assisting all African nations in addressing the enormous multi-trillion dollar infrastructure deficit, with long term-low interest loans to finance massive investments in life saving infrastructure. Instead of President Trump and his foolish advisors hurling geo-political condemnations against China, it would be far better for the US to join China’s Belt and Road Initiative, which is building vitally necessary infrastructure in Africa and around the world.

Both the Democratic and Republican Party, including President Trump himself, from time to time utter fond references of President Franklin Roosevelt. However, I have found that no leader in either party has any comprehension of the genius of President Roosevelt’s economic policies. FDR as he is known, understood the importance of infrastructure. This was abundantly evident in his New Deal, his creation of the Tennessee Valley Authority (TVA), and his Good Neighbor policy. During the war he sternly reprimanded Winston Churchill for his Imperial-Colonial policies in Africa. President Roosevelt intended to end the British Empire’s political and financial control in the world. He had a vision to develop Africa, including greening the desert, with the same methods he had successfully implemented in the US: great infrastructure projects. I can assure you, that President Roosevelt would have championed and aided any developing nation that embarked on energy production.

Sadly, in the seventy-five years following the death of President Roosevelt, the only President, who had shown enthusiasm for the economic development of Africa, was John F Kennedy.

Let the Trump administration pause to rethink this wrongheaded policy that not only violates Ethiopia’s sovereignty, but undermines a strong US ally in East Africa. Let us recognize Ethiopia’s endeavors to improve the living conditions of its citizens, and pause again to ask, how would President Franklin Roosevelt respond.  His TVA harnessed the power of the mighty Tennessee River generating electricity to transform the lives of millions of poverty stricken Americans living in seven undeveloped southern States.  Is it not in the strategic interest of the US to support nations working to eliminate poverty in Africa using Rooseveltian methods?

Read: Africa Requires Ethiopia Fill Its Dam

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

The West Continues to Attack China to the Detriment of Africa

A new Cold War is coming. Africa should not pick sides

August 28, 2020

The author, W Gyude Moore, a senior policy fellow at the Center for Global Development, and a former minister of public works in Liberia, makes some insightful observations about the difference between the US and China in their economic strategy for Africa.  China’s investment in infrastructure in Africa is unsurpassed and would not be replaced by the West, if China withdrew from Africa. 

Excerpts below:

“It is, thus, frustrating that in its complicated, enmeshed, centuries-long history in Africa, there has never been a Western proposal for continental-scale infrastructure building. Outside Cecil John Rhodes’s racist “civilising” project of connecting Cape to Cairo from the 1870s, there has never been any programme, backed by financial resources, to build Africa’s rail, roads, ports, water-filtration plants, or power stations. It was the Chinese who sought to build a road, rail and maritime infrastructure network to link Africa’s economies with the rest of the world.

“The Western argument of Chinese debt-trap diplomacy, inferior loan terms and an insidious, covert campaign to seize African national infrastructure assets rings hollow in the absence of a like-for-like Western alternative. Until the arrival of the Chinese, the infrastructure construction space in Africa was dominated by Europeans…

“In the past eight months, Western countries have spent more than $5- trillion to prop up their economies in response to the Covid-19 pandemic. JP Morgan projects that over 14 years (2013 to 2027), China’s Belt and Road Initiative (BRI) will cost about $1.2-trillion to $1.3-trillion. That kind of gap (both in dollars and time) makes it clear that, if it wanted to, the West could equal or surpass China’s BRI with its own infrastructure programme. If Africa steps away from China’s infrastructure programme, which Western country is ready and willing to fill the gap?”

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China, the World Bank, and African Debt: A War of Words

Deborah Brautigam, Director of the SAIS China Africa Research Initiative, discusses in her article below, the duplicity of  the World Bank, in their attacks on the China Development Bank. If the US and Western Institutions would cease attacking China, stopped peddling lies about the “Africa debt–trap” and joined China’s Belt and Road Initiative, Africa’s huge infrastructure deficit could be addressed to the benefit of all Africans.

Read: https://thediplomat.com/2020/08/china-the-world-bank-and-african-debt-a-war-of-words/

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

President Buhari and China Collaborate to Build Needed Railroads in Nigeria

July 28, 2020

Nigeria, and the whole of Africa desperately require electrical power and high-speed rail lines to become industrialized economically sovereign nations. Congratulations to President Buhari and China.

Map from Lagos, Nigeria to Maradi, Niger

 

Track Laying of Nigeria`s Lagos- Ibadan Standard Gauge Railway Completed.

No More Lies, No More Anti-China Propaganda: There is No China-Africa ‘Debt-trap’

June 20, 2020

China-Africa Research Initiative-(CARI) presented an interesting and useful webinar entitled : Debt Relief with Chinese Characteristics, using research presented from a Working Paper #39 and Policy Brief #46. View: CARI: Debt Relief With Chinese Characteristics

In response to China’s growing economic and political influence in the world, especially on the African continent, various propaganda outlets located in the West have launched a new assault on China. Their line of attack is to malign China and African leaders with the false narrative that China is intentionally luring African nations into a ‘debt-trap’ in order to seize control of their natural resources. This cynical view of China’s alliance with African nations flows from the age old doctrine of “geo-politics” that only perceives nations as either winners or losers in a fixed zero-sum view of the world.  In this evil world view, stronger powers, hegemons believe they can only maintain their supremacy by having their foot on the neck of weaker nations. The “geo-political” doctrine rejects the notion that all nations share a common interest.

Misinformation or Disinformation

As Deborah Brautigam, director of CARI has stated before, there is no evidence, none, not one single case of China using debt to seize control of an African nation’s assets. “We found no “asset seizures” and despite contract clauses requiring arbitration, no evidence of the use of courts to enforce payments, or application of penalty interest rates.” Despite no substantiation of China using debt as a weapon against African nations, the ‘debt-trap’ mantra is repeated by either misinformed individuals, including Africans, or by those who are deliberately disseminating disinformation with malice.

The CARI working paper reports the following:

“The rating agency Moody’s warned that countries ‘rich in natural resources, like Angola, Zambia, and Republic of the Congo, or with strategically important infrastructure, like ports or railways such as Kenya, are most vulnerable to the risk of losing control over important assets in negotiations with Chinese creditors.’ These assumptions of a malign China were repeated in publications like The New York Times, which contended that Chinese loans “frequently use national assets as collateral” and require refinancing ‘every couple years’ (our Africa data supports neither of these statements).” (emphasis added)

If there is any honesty or integrity left in our duplicitous culture, all claptrap about China’ alleged ‘debt-trap’ as a nefarious attempt to gain control of Africa’s wealth should cease immediately! If one examines the long history of China’s relationship with Africa and the more recent twenty year period, it is clear that China desires to resolve issues with African nations through consultation. China may choose other means of responding to payment difficulties, but there is no evidence that they want to take over African holdings, contrary to prevalent popular opinion. Read: Chinese ‘debt-trap’ Propaganda Exposed-Time to End Ignorance & Prejudice Against China in Africa

Debt Cancellation

As COVID-19 spreads in Africa, nations are struggling to survive economically and simultaneously defeat the deadly virus.  Debt service is onerous and must be suspended indefinitely or cancelled, as leaders of many Africans nation have rightly insisted. According to Dr. Brautigam, from 2000-2018, China has made loan commitments of $152 billion, and of Africa’ total external debt, China holds 17%, while the World Bank hold 18%, and private lenders 31%.  Thus, China will and has already engaged in debt relief, but will do it differently than western institutions like the Paris Club and World Bank.

“Our [CARI] study found that between 2000 and 2019, China has cancelled at least US$ 3.4 billion of debt in Africa. There is no “China, Inc.”: for interest-bearing loans, treatment for inter-governmental debt and Chinese company loans are negotiated separately, and often loan-by-loan rather than for the entire portfolio. While rescheduling by increasing the repayment period is common, changes in interest rates, reductions in principal (“haircuts”), or refinancing are not. We found that China has restructured or refinanced approximately US$ 15 billion of debt in Africa between 2000 and 20190…Chinese lenders prefer to address restructuring quietly, on a bilateral basis, tailoring programs to each situation.”   

China, up this point has only cancelled zero interest loans, which represent only 5% of loans from China, and are issued from China’s Ministry of Commerce. It is unlikely that there will be unilateral debt suspension.  Thus, we can expect that China will negotiate debt relief bilaterally with each nation, and each loan reviewed separately.

Even if debt cancellation is continued into 2021, which has not yet been agreed to, it will be insufficient. The level of investment required to meet Africa’s’ minimal infrastructure needs is in the trillions of dollars, which belies the “geo-political” nonsense of zero-sum assumptions.  Debt relief must be accompanied by issuance of credit for infrastructure and related sectors of production, otherwise Africa and the world will suffer from the spread of COVID-19 and future zoonotic diseases. Poverty is a co-factor for all diseases. Lack of electricity is a co-factor for the spread of disease and hunger, as is the lack of clean water, and inadequate transportation.

China’s Belt and Road Initiative over recent years has begun to address Africa’s infrastructure deficit, but much, much more is required. Collaboration between the U.S. and China on the development of Africa would be consequential for the continent.

I have addressed this issue in earlier posts: World Needs New Economic Platform to Fight COVID-19, New Economic Order Required to Combat COVID-19 in Africa

ViewCARI: Debt Relief With Chinese Characteristics

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

China’s Belt & Road Needed to Revitalize World Economy: CGTN

May 18, 2020

Below are excerpts from my article on the strategic role of China’s Belt and Road in today’s world economy, published by CGTN 

The global economic breakdown ignited by the COVID-19 pandemic entails China and its Belt and Road Initiative (BRI) playing an important role in restoring health to the world economy. While Western nations are still struggling with COVID-19, and are months away from beginning to refurbish their economies, China has already started its recovery, following its earlier success in combating the coronavirus.

The collapse of nations to conditions resembling the Great Depression and the inability to contain the deadly virus have belied the alleged success of globalization. The underlying flaws of the deregulated post Bretton Woods financial system, which has become an international gambling casino to make fast money, are now nakedly revealed. Given the breakdown of the present global financial system, it is urgent that leading nations issue a call to convene a conference to initiate a New Bretton Woods system, which values human life over making money.

For civilization to progress, a new economic architecture dedicated to ending poverty, and promoting productive economic growth is compulsory. Without question, the United States and China will have to perform outsized roles in establishing a new paradigm of political-economic relationships among nations, notwithstanding current tensions.

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