China is NOT Exploiting Africa, But Investing in its Future: The Case of Nigeria

The article below, “Nigeria’s balanced and diverse relationship with China is key to sustainability,” provides a useful examination of the healthy bilateral relationship that China has developed with Nigeria, especially during the administration of President Buhari.  It is also important to note that Nigeria has officially joined China’s Belt and Road Initiative in January of this year. (excerpts below followed by a link to complete article)

1)    Infrastructure

Nigeria has one of the largest infrastructure deficits in the world; two thirds of the population still does not have access to safe water and over half of the population has no access to reliable electricity. Logistics costs are also extremely high; it costs more to transport a good from Lagos in Nigeria’s South to Kano in the North (1000km), than it does to ship a good from Shanghai to Lagos (over 12,000 km).

Nigeria’s government is investing in infrastructure, but external funding is needed. As cited in the National Integrated Infrastructure Master-plan (NIIMP) developed by Nigeria’s Ministry for Planning in 2015, it is estimated that the country requires $3 trillion over the next 30 years, with $500 billion required in the first 10 years. This estimate, which has wide sectoral scope, is reached by comparing Nigeria’s core infrastructure stock of around 20-25% GDP to international benchmarks of around 70%. Yet, even as the government increased its budget allocation for capital expenditure to 30% in 2017, this remains at least 80% short of the annual amount prescribed by NIIMP.

Alongside self-funding new infrastructure, Nigeria has also looked to the World Bank, European Commission and African Development Bank as sources of infrastructure capital. Yet while they might have the risk tolerance and investment horizons, their capital remains diluted over a number of countries. In its 60 years of operation in Nigeria, the World Bank has invested on average $100 million on infrastructure a year – significant but still a drop in the ocean versus Nigeria’s needs…

3)    Manufacturing    

While Nigeria is the richest economy in Africa, with the largest population and one of the better educated work forces, 4 in every 10 people still remain unemployed. Nigeria needs more inclusive industrialization that creates jobs for all, as opposed to focusing solely on sectors such as oil. Opportunities lie in the manufacturing sector, which creates more jobs through stronger forward and backwards economic linkages than any other sector.

Nigeria is again leveraging its relationship with China here. Some Chinese manufacturers have started relocating production to Nigeria, partly in response to rising wages in China and to take full advantage of the size of Nigeria’s domestic market. Sun Ceramics is one such example; they produce ceramics the size of 10 football fields every day, employ over 1,000 locals and also source all their raw materials from Nigeria. If it weren’t for Nigeria’s difficult business environment, Chinese firms claim they would commit greater amounts of investment.

Stronger ties to stand the test of time.

Nigeria, however, has managed to…build a balanced and more diverse relationship with China. Nigeria’s relationship with China extends beyond resources and infrastructure to security, financial planning and sharing of best-practice in manufacturing, to name a few areas of cooperation. Particularly in the realms of security cooperation; the Chinese have found an area that helps win them local support on the ground in Nigeria given a near-universal desire to eliminate insurgent forces. Nigeria also recognizes that the size of its domestic market offers the largest opportunity in Africa for Chinese companies; and that has helped to improve the balance in the relationship.

It is this combination of balance and diversification that is key to a sustainable relationship with China.

 

Read: Nigeria’s Balanced and Diverse Relationship with China

Italy and Buhari Keep Transaqua on the Agenda to Save the Shrinking Lake Chad

Jan. 18, 2019

Italian Prime Minister Conte Discusses Development with Presidents of Chad and Niger

Giuseppe Conte made a two-day visit to Niger and Chad, two countries members of the Lake Chad Basin Commission, to discuss short and long-term measures to fight terrorism, migration, and their causes on Jan. 15-16. In both countries he discussed development perspectives with national leaders.

At the joint press conference in Ndjamena with Chad President Idriss Déby, Conte referred to the Transaqua project for the revitalization of Lake Chad as an example of development programs.

European countries, Conte said, “cannot remain insensible to the drying up of Lake Chad. If it goes on, there will be increased misery and thus increased emigration and terrorist threat,” Conte remarked. “If we don’t have a vision on those issues, we will be overwhelmed. I reminded President Déby that the possibly oldest project to tackle the drying out of Lake Chad has been made by Italian experts. There is a project of dams and canals to provide irrigation.

This means laying the basis for the development of those territories and therefore better controlling migration flows.”

Both in Niger and Chad, Conte said that Italy will be “the ambassador” of the Sahel region at the EU, to promote a larger effort to finance development. The EU Trust Fund for Africa must be enlarged, Conte said.

At the joint press conference in Niamey, Niger President Mahamadou Issofou thanked Italy for the support of the Sahel-5 Multinational Force to fight terrorism, but repeatedly stressed that “the solution is developing Africa, industrializing Africa.” This goes for defeating terrorism as well as for controlling immigration flows.

Conte thanked Issofou for its support to Italy in the stabilization plan for Libya. Although this was the first visit ever of an Italian Prime Minister to Niger (and Chad as well), Conte remarked that this was his third meeting with Issofou, following meetings in Rome and Palermo, the latter at the International Libya conference. Stabilizing Libya is key to defeat terrorism, Conte remarked.

Nigerian President Buhari Reiterates His Commitment To Refilling Lake Chad

Nigerian President Muhammadu Buhari called for more commitment from the international community on redirecting water to Lake Chad on Jan. 14, warning that the 40 million people who rely on the lake in the region would pose adverse migration and security challenges to the world.

The Transaqua project to refill Lake Chad was approved at the Feb. 26-28, 2018 International Conference on Lake Chad in Abuja and soon the feasibility study financed by the Italian government should start. The cost of the entire 2400 km system of dams and canals will be in the order of several dozen billion dollars.

Receiving Letters of Credence from the High Commissioner of Canada to Nigeria Philip Baker at the Presidential Villa, President Buhari said the tragedy of the shrinking Lake Chad would continue to fuel more illegal migrations, banditry and provide willing hands for terrorism since majority of the people have lost their means of livelihood.

A statement by the special adviser to the President on media and publicity Femi Adesina said that Buhari warned that “the about 40 million population in the region will pose adverse migration and security challenges to the world” if the lake should dry up completely. The President pointed out that banditry, illegal migration and terrorism would worsen if the lake were not rescued. He said: “An academic rightly predicted that unless there was a redirection of water to Lake Chad, it would dry up. Now, whenever I go for any global meeting or visit a country, I will always draw the world’s attention to the adverse effect of climate change on the lake, and the resulting negative effects.”

 

 

Nation State vs Ethnicity in Africa

Mahmood Mamdani raises proactive questions on the role ethnicity in Africa and Ethiopia in particular. (See excerpts and article below).

Africa has been plagued to this day by two legacies from colonialism (British): 1) the intentional failure to build infrastructure; 2) the deliberate fostering of ethnicity. Historical literature is replete with evidence of the British creation of ethnic and/or native administrative units as a central feature of their divide and rule colonial policy. Lord Frederick Lugard, who authored the infamous “indirect rule” stratagem, implemented his scheme in Nigeria when he became the Govern General Nigeria in 1914, and ruled the North and South differently. Similarly, the British cultivated the North versus South conflict in Sudan with their separate Southern policy exemplified by their 1922 Passport and Ordinance Act. There are more examples available.

Accentuating ethnic, tribal, religious, and geographical distinctions is used as a means to thwart the creation of sovereign Nation States, particularly in Africa. A functioning Nation State is not founded on a collection of minorities, or even a majority. Instead, it is created on principles that define its responsibilities to provide for the general welfare of its citizens and their posterity, which must include nurturing the creative potential of each child. Nation States transcend differences within their populations by uniting all their people in a common mission, not only to develop their nation, but to contribute to the future of mankind as well.     

Ethiopia uniquely evaded colonization with its 1896 military victory against the Italian army in Adwa, led by Menelik II. Yet as Mamdani points out, Ethiopian Federalism accommodates ethnicity, which is divisive today, and is being used to undermine the central-federal government. By following the core economic thesis of Meles Zenawi’s “Developmental State” Ethiopia has embarked on a bold campaign to transform their country through government directed investment in infrastructure, while protecting their economy from being invaded by foreign financial predators. As a result of Ethiopia’s relative success among African nations in performing this necessary Nation State function, it has become the “enemy” to those forces-internal and external-that oppose development of African nations. Not surprisingly in the last six months there have been renewed efforts to liberalize-deregulate Ethiopia’s financial system in an attempt to weaken its commitment to the “Developmental State” model. 

Therefore, the suggestion of a new kind of non-ethnic federalism is a conception that could lead to strengthening the institution of the Nation State in Africa.   

The new Tram in Adds Ababa typifies Ethiopia’s approach to infrastructure.

“Ethiopians used to think of themselves as Africans of a special kind, who were not colonized, but the country today resembles a quintessential African system, marked by ethnic mobilization for ethnic gains.

In most of Africa, ethnicity was politicized when the British turned the ethnic group into a unit of local administration, which they termed “indirect rule.” Every bit of the colony came to be defined as an ethnic homeland, where an ethnic authority enforced an ethnically defined customary law that conferred privileges on those deemed indigenous at the expense of non-indigenous minorities.

An interesting book worth reading by Mahmood Mamdani is: “Saviors and survivors.” It about Sudan and Darfur, but also discusses the creation of ethnic groups.

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Pres. Trump’s Non-Africa Strategy

The so-called US African strategy articulated by National Security Adviser John Bolton, with the approval of President Trump has little, if anything to do with Africa. It is essentially a geo-political strategy aimed primarily at China and to a lesser extent Russia. The true believers of the bankrupt geo-political ideology live in a “global zero-sum game”-a world with only winners and losers among the super-powers. All other (lesser) nations are treated as movable pieces in their fantasy game. In other words, in this administration’s policy, Africa is a pawn on their geo-political chess board. Sadly, this so called African strategy does nothing to improve the conditions of life for the African people, and nothing to enhance US security. Bolton’s explicit attack on China’s successful Belt and Road policy, which for the first time since the days of imperialist/colonial domination of Africa, is providing vitally needed infrastructure across the African continent, demonstrates how little the Trump administration actually cares about the economic welfare of African people. The Trump/Bolton policy has already failed from the start. It is too late to stop China’s on-going collaboration with African nations. However, if the Trump administration was more thoughtful about Africa, they would join with China and Russia to assist in developing the continent, which is still suffering from massive deficits in vital categories of infrastructure. There is still time for the US to reverse course, but this would require jettisoning their adherence to the age old British geo-political world view.

Image result for us africa
The US Lacks A Development Strategy for Africa

Read Bolton’s Non-Africa Strategy

Will the Destabilization of Sudan Caused by IMF/World Bank Policies Lead to Regime Change?

December 26, 2018

Several days of protest triggered by an increase in the price of bread and petrol have created a serious political crisis for the government of Sudan. The core reason for the civil eruption is the adherence by the leadership of Sudan to the diktats by the International Monetary Fund (IMF) and World Bank (WB), who have ordered the removal of subsidies for food and fuel. Sudan has been told by the Western financial institutions that its people must continue to suffer economically for future consideration of partial debt forgiveness. These same organizations have insisted that so-called market forces must determine the valuation of the Sudanese Pound. Unfortunately, Sudan acquiesced resulting in a steep devaluation of their currency causing more hardship for the already suffering Sudanese people. This is no exaggeration. During the 2018 Spring Bank/Fund meetings in DC, I attended as a journalist, the discussion with officials from the IMF/WB, US State Department, European nations, et al and representatives from Sudan. When I objected to the economic conditions that Sudan was being bludgeoned to submit to, the WB/IMF officials responded that the Sudanese people will have to undergo more pain. Their justification? It was necessary for Sudan to reduce those state expenditures that provided some economic relief for its people. That dialogue confirmed what I already knew: IMF/WB policies are not good for a nation’s health.

Sun setting on the Nile River in Khartoum

I re-emphasized to my Sudanese friends in the strongest terms what I have been telling them for years; for the welfare of your nation, Sudan must break from these policies. I warned my friends that the same political-financial forces who have been unsuccessful in trying to remove President Omar al-Bashir and weaken the National Congress Party for the last 25 years would change tactics. Now the enemies of Sudan will use the legitimate frustrations of the population against these harsh economic conditions to mobilize the Sudanese for regime change. There is no doubt in my mind that there are agents operating on the ground in Sudan to channel these protests into a movement for the over throw of President al-Bashir.

A repressive response will not succeed in quelling the people’s anger. In fact, that is what the enemies of Sudan are expecting. What is immediately required to prevent this crisis from escalating to a full-scale destabilization pf the nation is; 1) an abrupt termination of the IMF/WB prescriptions, and 2) articulating a national economic development plan that will utilize all of Sudan’s natural resources, most especially its people.

Review below interview with Lawrence Freeman on danger of protests in Sudan leading to regime change.

Despite Claims From the West: Report Reveals That China’s Africa Infrastructure Projects are Reducing Economic Inequalities

 

China’s New Silk Road/Belt Road Initiative is developing many parts of the world with infrastructure that are yielding positive economic results .

Chinese Investments in Developing Sector Decrease Inequality

December 12, 2018

A study done by the AidData institute at William and Mary College in Virginia showed that China’s investments in the developing sector between 2000 and 2014, unlike many western investments, reduce economic inequality in the targeted countries.

Financed by the UN, the Singapore Ministry of Education, the German Research Foundation, USAID, and several other foundations, the study collected data on Chinese projects in 138 countries, concluding: “We find that Chinese development projects in general, and Chinese transportation projects in particular, reduce economic inequality within and between sub-national localities,” and “produce positive economic spillover that leads to a more equal distribution of economic activity.”

“Beijing has demonstrated that it is  both willing and able to address the unmet infrastructure financing needs of developing countries. These development projects—in particular, investments in highways, railways, roads, bridges, tunnels, and ports—could strengthen economic ties between rural and urban areas and thereby help to spread the benefits of economic growth to more remote and traditionally disadvantaged areas.”

“The findings from the study are encouraging: Chinese development projects—in particular, “connective infrastructure” projects like roads and bridges—are found to create a more equal distribution of economic activity within the provinces and districts where they were located.”

Read the article with a link to the report

 

 

US-Western Culture is Failing Because Its People Are Dying.

Nov. 29, 2018—Forget the stock market, inflation, and the jobs figures. According to the most vital measures of the U.S. economy, the fundamentals are very unsound.

U.S. life-expectancy at birth decreased again in 2017, according to statistics released today by the Centers for Disease Control (CDC). This makes the third year in a row that, contrary to the rest of the world, U.S. life-expectancy has stagnated or gone down. Such a multi-year reduction—from a peak of 78.9 years in 2014 to 78.6 years in 2017—has not occurred for 100 years, at the time of World War I and the Spanish flu epidemic.

The fact that adults between 25 and 44 years of age were the grouping that showed a statistically significant decrease in life-expectancy bodes poorly for future population growth as well. A society whose young adults of child-bearing age are dying at increasing rates, is a society headed for death.

A complementary report from the CDC also issued today points to one of the causes of the life-expectancy decline: deaths from opioid overdoses increased 9.6% between 2016 and 2017.  The absolute number—70,237—is slightly less than had been anticipated in the summer, but should still be cause for alarm. The other cause of deaths that  the CDC cites is the increase in suicides.

I’ve written about it before, but I have to say it again: population growth, in quality and quantity, is a hallmark of the American System of economics, and all competent economic science. The human mind is the source of invention and wealth, as human history shows, and as humanity cultivates its power over nature (including itself), it creates new potentials for progress. Through human inventive power, we have been able to advance from a culture where people had to spend all their waking hours simply guaranteeing their survival, to one where people (potentially) can eliminate poverty, harness nature, and have the leisure to develop their minds, create new inventions, and explore new worlds.

Conversely, when the human mind is degraded—as through slavery, narcotic drugs, pornography, and other degeneracy—the economy is eventually doomed. This is the process which we in the United States have been going through for nigh onto 50 years, and it’s killing us.

The last statistic I will mention is suicide.  Suicide is now the 10th major cause of death in the United States, and has increased from 10.5 per 100,000 in 1999 to 14 per 100,000 in 2017. It is at the highest rate in 50 years. Here again, the United States is out of sync with the rest of the world, where the suicide rate, on average, is going down.

“Since this (drop in life expectancy) is being driven by increases in deaths due to drug overdoses and suicides and this affects the younger population, you’re talking about a lot of potential life that’s not being lived as a result of those increases,” commented Robert Anderson, chief of the Mortality Statistics Branch at the National Center for Health Statistics.

This situation is not going to be reversed by special programs to stop addiction and suicides. It’s going to take a sweeping change in the approach we citizens take toward our obligation to society and the future. Fortunately, there are models within our own American history for success. When will we start to heed them

Nigeria and Sub-Saharan Africa Should NOT Have the Majority of Poor People.

This  is absolutely unacceptable. There is no objective reason for Nigeria and Sub-Saharan Africa to have the highest percentage of poor people in the world, with all its natural resources and people. This is the result of failed policies that began with the so called “Washington Consensus” beginning in the 1980s. Under the International Monetary Fund’s diktats and Structural Adjustment Programs(SAPs), the economies of African nations were destroyed and many have still not recovered.  African nations are beginning to follow a different model in collaboration with China’s Belt and Road Initiative. The IMF and World Bank models which measure statistical monetary aggregates ignore the most essential ingredient necessary to create economic growth: technologically advanced infrastructure platforms, integrating rail, energy, water, and roads. Only in the last ten years is infrastructure finally being built, after it was outlawed under colonialism and neo-colonialism, (except for roads and rail for resource to port and transporting colonial soldiers).  For example, the Sudanese people are suffering terribly from a lack of economic growth, because Sudan has been threatened not to deviate from IMF dictated macro-economic parameters. The Sudanese people will rebel, if Sudan continues to adhere to the murderous policies of the so called “free market.”

It is time for African nations to over throw the old model and break free from the monetarist grip of the IMF and WB. Inclusive growth, as it is called, will only happen when there is improvement in the real-physical economy. 

It is projected that by 2050 Nigeria will have 400 million people and Africa as a whole 2.4 billion. Despite the hysteria of the “zero-growthers,” Nigeria and Africa are not suffering from over population, but underdevelopment of its vast wealth. Each new human born can be a new source of wealth, if their creative potential is nurtured and developed. Thus, the Africa continent  with its projected large population, should become the center development (not poverty) of world economy, if we act now to massively expand infrastructure across the continent.

Nigeria to host 90% of extremely poor by 2030, says World Bank

A Brief Response: Marshall Plan for Africa or “Debt Trap?”

Lawrence Freeman

September 20, 2018

The world is witnessing an increase in attacks on Africa’s relationships with China in various articles, as well as low-level, unthoughtful, messages on Twitter, Facebook, and YouTube. Not only does that content intend to demonize China as the new colonial empire of Africa, but it also includes vulgar demeaning caricatures of African Heads of State.

Could the reason for the uptick of these kinds of diatribes be related to the successful September 3-4, Forum on China Africa Cooperation (FOCAC) summit in Beijing, attended by leaders from almost every African nation? China has reached out to Arica and formed a special relationship which is being embraced by African Heads of State. It should be clear to any intelligent historian, that China is not acting as an Imperialist manner towards Africa.

However, what has been conspicuously, egregiously omitted from this unsubstantiated vilification of China, is the history of Western nations and institutions, which have acted as an Imperialist power towards Africa. The latest accusation is that China is deliberately entrapping African nations into unpayable debt. However, this is precisely what the IMF, World Bank, Paris Club, along with their allies in the City of London and Wall Street did to Africa immediately following the “Winds of Change.”

The motivation for this propaganda barrage is that China via FOCAC and the Belt & Road Initiative is offering African nations a pathway toward growth uncontrolled by the financial predators in the City of London and Wall Street. Contrary to the myth that China is stealing African resources; which the Western powers did first under slavery, then under colonialism, and have continued under neo-colonialism, China is actually providing credit for physical infrastructure; the sin qua non to spur economic growth.

Debt and Credit for What?  

A pervasive and quite serious problem affecting well-intentioned individuals from all corners of the globe is the lack of understanding of what actually creates economic growth. Neither money, nor financial transactions, nor derivatives, nor speculation, nor rising stock markets, nor the market place are the cause of growth or synonymous with real economic growth.

Credits issued for infrastructure; water, energy, rail, roads, healthcare, and education, identifying the most vital categories, if properly organized, leads to an increase in the productivity i.e. the economic power of the society. This is measured by the ability of society to increase its physical output from one production cycle to the next. By utilizing advanced technologies embedded in new capital equipment, including infrastructure, farmers and workers can produce more efficiently. Simply providing abundant energy, high-speed railroads, and water inputs to an African nation would lead to a jump in economic output.  Shortly after the death of President Kennedy, the US ceased its commitment to assist Africa nations in expanding their infrastructure.

China is committed to lending, issuing credit-yes creating a debt to fund long-term investment in infrastructure. Credit directed in this way is good debt. With non-usurious interest rates over 15-20 years, the loan can be retired from the profit it generates to society. This form of debt is not equivalent to the hundreds of billions of dollars African nations were forced to pay to the financial capitals of the world for loans to cover rigged terms of trade, and currency devaluations.

If you study the American System of Political Economy with its cornerstone; Alexander Hamilton’s national credit policy, you will realize that China is emulating the best of America’s past. For example, President Franklin Roosevelt, who successfully applied Hamilton’s principle  to rebuild the Depression riddled US with state issued credits, would have little trouble understanding the principles of President Xi Jinping’s Belt & Road.

Economics and the Common Good

There is a deeper level to comprehending economic growth. Every human being is united by a universal principle often expressed as the “common good of mankind.” Yes, all human beings regardless of religion, color, ethnicity, or place of birth, share a “common interest.” We are all created with the power of creativity. Not logic, not deduction, not induction, but the power to hypothesis new ideas. The power of discovery, to discern new principles of the universe that we previously did not know but were there waiting to be revealed to the human mind. These scientific discoveries spawn new technologies which are the primary source of economic growth. Thus, it is the responsibility, nay the obligation of every society to nurture and develop that creative potential innate in all its citizens from birth to death.

For all citizens to realize their potential, live productive lives, and raise their families without fear of hunger and security, a nation must have the economic means to expand the total physical wealth of society over succeeding generations.  An advanced industrialized nation requires a healthy manufacturing sector, which is also an essential component of a productive agriculture sector.  The absence of robust agro-manufacturing economies in Africa is crime along with its huge deficit in infrastructure.

Sadly, the West does not have the vision to assist African nations in overcoming these deficiencies. China in all, but name has launched the equivalent of a Marshall Plan for Africa.

Among the eight major initiatives that President Xi laid out at the Africa-China Summit, China will:

1.Promote industrialization; 2. Support agricultural assistance programs; 3. Work with the African Union (Agenda 2063) to formulate a China-Africa infrastructure cooperation program; 4. Increase its imports from Africa, in particular non-resources products; 5. Train 1,000 high-caliber Africans for training in innovation sectors; provide Africa with 50,000 government scholarships; and sponsor seminar and workshop opportunities for 50,000 Africans and invite 2,000 African students to visit China for exchanges.

China has come to understand that it is the common interest of its own country, and in the fact all nations, is to help Africa develop productive industrialized societies not dependent on revenue from one resource or one crop. Under these improved conditions, hunger and poverty, the underlying causes for conflict, can be eliminated. Great progress can be accomplished in Africa and the world, if the US and Europe acquire the wisdom to join China’s Spirit of the Belt & Road

Below are three articles with excerpts that provide useful background to understanding Africa’s productive relationship with China.

“The recently concluded China-Africa Summit offers a new deal for Africa’s recovery. The Forum for China-Africa Cooperation (FOCAC) has the making of a 21st century equivalent of the Marshall Plan, America’s massive economic rescue programe that President Harry Truman unveiled for Europe on April 3, 1948.

AFRICA’S INDUSTRIALISATION

On its part, China is taking a Pan-African approach targeting projects with regional impact such as Kenya’s standard gauge railway.   Like the Marshall Plan that prioritized the reindustrialization of Europe after the war, China is laudably giving a pride of place to Africa’s industrialisation.

Industrialization was top on the list of President Xi Jinping’s eight-point plan to guide Chinese aid to Africa in the next three years. Recipients of Marshall Plan had to invest 60 percent of these funds in industry. The funds also involved Technical Assistance Programes to create a skilled labor force to drive industrialization.”       Read: China’s Marshall Plan for Africa-Debt or New Deal ?

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“Speaking as the Chairman of the African Union, President Paul Kagame of Rwanda, expressed the will of Africa very clearly: “Africa wishes to be a full and integral part of the Belt and Road Initiative.” And in spite of the myriad attacks in the Western media regarding the Belt and Road’s alleged “debt trap”—and its description of China’s extensive involvement in Africa as a “new colonialism”—this “fake news” has not blurred the vision of Africa’s leaders, who have stayed focused on the future of the continent.

Ramaphosa also praised the work of China’s Belt and Road Initiative: “Why do we support the Belt and Road Initiative?” “Because we are confident that this initiative, which effectively complements the work of FOCAC, will reduce the costs and increase the volume of trade between Africa and China.  It will encourage the development of Africa’s infrastructure, a critical requirement for meaningful regional and continental integration.” Read: FOCAC Summit: Turning Point in History

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“It can be said that this sentiment is near universal among the African nations now participating in the BRI. Indeed the president of the African Development Bank (AfDB), Dr. Akinwumi Adesina, told Xinhua on the sidelines of the summit, “Let me be very clear that Africa has absolutely no debt crisis; African countries are desperate for infrastructure. The population is rising, urbanization is there, and fiscal space is very small.” The AfDB president added, “They are taking on a lot more debt, but in the right way.” Read: Changes Underway as FOCAC Convenes

West Uses “Debt Trap” to Thwart Alliance of China & Africa for Economic Development

September 8, 2018

“The term “debtbook diplomacy”—with the meaning that China builds influence over other nations by deliberately causing them to take on more debt than they can handle—was coined in a report commissioned by (and custom designed for) the U.S. State Department and written in May 2018 by Sam Parker of the Harvard Kennedy School’s Belfer Center for Science and International Affairs. This report was then used by the U.S. State Department to ring alarm bells all over the world about the potential impact of China’s Belt and Road Initiative. But the report’s author, Sam Parker, is not known to have any expertise in economics or to have written anything about the economies of China or other developing countries.

“Historically, the British Empire was, and still is, the master of debt traps. Its methods have been copied in the post-1971, post-Bretton Woods era by such United States- and British-controlled institutions as the International Monetary Fund and World Bank to shackle nations with unpayable debt, in order to loot them, destroy their physical economic productive capabilities and finally force them to give up their national sovereignty. Under the 19th century, British-dominated, imperialist world order, as in the case of the post Bretton Woods system, money is treated as a “global” commodity controlled by private interests, rather than a political tool controlled by sovereign governments which issuance is intended to promote the productivity of society and the general welfare of its citizens.”` (Schiller Institute’s “Why China’s Debtbook Diplomacy is a Hoax”)

African Development Bank President, Adesina, Denies Debt Crisis in Africa

Speaking to the reporters on the sidelines of the Forum on China-Africa Cooperation (FOCAC) Beijing Summit on Sept 5, and addressing the western propaganda that China is drowning Africa with debt, President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, said: “Let me be very clear that Africa has absolutely no debt crisis; African countries are desperate for infrastructure.” “The population is rising, urbanization is there, and fiscal space is very small,” the AfDB president added. “They are taking on a lot more debt, but in the right way,” Adesina said, Xinhua reported on Sept 5.

Scoffing at the international campaign that the China imposed debt has begun to cripple Africa, Adesina pointed out that Africa’s overall debt-to-GDP went up from 22 percent in 2010 to 37 per cent last year. He stressed that the ratio is markedly lower than the 100 per cent or 150 per cent of many higher-income countries, and over 50 per cent among emerging economies.

Meanwhile, in an interview with the Nikkei of Japan, the foreign minister of Djibouti, Mahmoud Ali Youssouf, said his country intends to help promote China’s Belt and Road Initiative, but is also cautious about over reliance on China in light of Djibouti’s growing debts linked to Chinese investment. “If [the initiative] brings wealth, progress, development, we welcome it,” he said in that interview, Nikkei reported today

Nigerian President Buhari Debunks the “Debt Trap” Hoax

Muhammadu Buhari, the President of Afria’s most populous nation, Nigeria, has emerged from the hugely successful Forum on China-African Cooperation (FOCAC) with a refutation of what he called “insinuations about a so-called Chinese debt trap.”

“Let me use this opportunity to address and dispel insinuations about a so-called Chinese debt trap,” he told the press today. “These vital infrastructure projects being funded are perfectly in line with Nigeria’s Economic Recovery & Growth Plan. Some of the debts, it must be  noted, are self-liquidating. Nigeria is fully able to repay all the loans as and when due, in keeping with our policy of fiscal prudence and sound housekeeping.”

He said: “I am happy to note that Nigeria’s partnership with China through FOCAC has resulted in the execution of critical infrastructure projects valued at more than $5 billion, over the last three years. We have completed West Africa’s first urban rail system, valued at $500 million, in Abuja. Before then was the 180km rail line that connects Abuja and Kaduna, completed and commissioned in 2016, and running efficiently since then,” the President declared.

He said that Nigeria is currently leveraging Chinese funding to execute $3.4 billion worth of projects at various stages of completion. Among these are: upgrading of airport terminals, the Lagos-Kano rail line, the Zungeru hydroelectric power project, and fibre cables for our internet infrastructure. Nigeria signed an agreement for an additional $1 billion loan from China. The money is for additional rolling stock for the newly constructed rail lines, as well as road rehabilitation and water supply projects.

“Debt Trap” Hoax Exposed by Chinese Spokesperson

At a September 4 press conference on the morning of the second day of the FOCAC Summit, Xu Jinghu, the Special Representative of the Chinese Government on African Affairs, was asked by Reuters about whether the $60 billion financing that President Xi Jinping promised in aid for Africa in his keynote address, would create debt problems for Africa.

Xu Jinghu went through the importance of the eight areas outlined by President Xi in order to raise the level of production and productivity of the African economy.  She also made clear that all of the projects are done in close consultation with the African countries in order to meet what they see as their real needs for further industrialization.

She added that Africa is in “the ascending phase” of its development and “faces a gap in the funding for all of their endeavors…”They need capital development and the African and Chinese economy, which is more developed, are therefore complementary.”

Xu commented, “You have to take into consideration the international situation. The  costs of financing for development on the international market has become very expensive and most of the African countries are still dependent on exporting their raw materials. And the price of these have fallen,which has increased the debt of African countries a great deal.  And if you look at the African countries, you will see that China is not the creditor of those African countries with the biggest debt burden.

China Africa Research Initiative Refutes “Death Trap” Propaganda

The China Africa Research Initiative-(CARI) at the Johns Hopkins School of International Studies, Washington DC refuted the “death-trap” narrative that China is subverting African nations by forcing them into debt.  Their The Path Ahead: The 7th Forum on China Africa Cooperation-(Briefing Paper #1, 2018), reports: “Finally, in just three African countries, Chinese loans are currently the most significant contributor to high risk of/actual debt distress” They are;  Djibouti, Republic of Congo, and Zambia.  

Read complete CARI  briefing paper

 

Read:

Who Owns Africa’s Debt: China or Western Nations & Institutions?