Will Africa Emulate China in Eliminating Poverty with BRI? More Electrical Power Needed

March 7, 2019

Rwanda Acknowledges Partnership With China Is Beneficial for Both Nations

President Xi Jinping left and President Paul Kegame-right (East African)

Answering a media query in Kigali on March 5, Rwandan Foreign Minister Richard Sezibera said that the Belt and Road Initiative is a partnership that is mutually beneficial for Rwanda and China, and addresses Rwanda’s development challenges, Xinhua reported. China is an important partner for Rwanda at all levels, and Rwanda welcomes the growing partnership with China, he said, adding that Rwanda and China have important relationships in infrastructure development, party-to-party and people-to-people exchanges, and at the political level.

Last August, {China Daily} reported Rwandan Ambassador to China Charles Kayonga telling the newspaper, through e-mail, that in Rwanda, “we have had financing for a number of roads, and we have seen direct investment by Chinese companies in a number of businesses rise.” 

 Africa is in need of infrastructure, among other things, to achieve sustainable economic transformation, he said, adding that cooperation with China will help finance the infrastructure projects to help spur the continent’s industrial development, which will, in turn, favor China in its vision of going global.

Prescient Xi: China is Eliminating Poverty

Speaking today with deputies from Gansu Province, President Xi Jinping underlined the importance of reaching the goal of eliminating poverty by 2020.

“There should be no retreat until a complete victory is won,” Xi said. “Decisive progress has been achieved in the country’s tough fight against poverty over the past years, marking a new chapter in the poverty reduction history of mankind.” Xi stressed, that the goal to eradicate extreme poverty must be achieved on time. He warned that the tasks ahead remain arduous and hard, as those still in poverty are the worst stricken. He also warned that, “the practices of ‘formalities for formalities’ sake and bureaucratism hamper the effective advancement of poverty reduction.” He also warned against the tendency to celebrate short-term gains when it comes to addressing the problem of poverty. He insisted that claims of success should be grounded in reality, and that the results of poverty alleviation work must be able to stand the test of time.

 Also today, a comprehensive briefing was given on the success of poverty reduction over the last few years by Liu Yongfu, Director of the State Council Leading Group Office of Poverty Alleviation and Development. He held a press conference outlining the progress of the poverty-alleviation campaign. Liu noted that between 2012 and 2018, some 80 million people had been brought out of poverty at an average of 13 million people a year. Of the nine eastern provinces, eight were now free of poverty. He said there are 832 counties still enmired in poverty. In 2016, there were 28 counties that had been lifted out of poverty, and in 2017, some 125 counties, and in 2018, an estimated 280 counties. In 2013 there were 128,000 villages in poverty, while in 2018 there were 20,000. Poverty has been reduced during that period by 85%, Liu said, and the goal this year is to bring 10 million more people out of poverty. In 2019 the government will increase the funds devoted to poverty alleviation by 18.9%


African Development Bank Funding New Power Transmission Line For East Africa

In an article on its website, the African Development Bank (AfDB), pointing to regular power cuts in the East African countries from Kenya to Tanzania, from Uganda to Ethiopia, said this is about to change with the upcoming commissioning of a power transmission line to interconnect Kenya and Ethiopia. This project falls under one of the AfDB’s ‘High 5 priorities’ to ‘Light up and Power Africa.’ Working with
institutional partners, the Bank has mobilized resources to ensure the success of this project. At a cost of $1.26 billion, the project was co-funded by the African Development Bank ($338 million), the World Bank ($684 million), the Government of Kenya ($88 million), and the Government of Ethiopia ($32 million), the article noted.

The interconnection will function by means of a 1,068-km, 500-kilovolt high-voltage direct current transmission line, 437 km in Ethiopia and 631 km in Kenya with related facilities at Wolayta-Sodo (Ethiopia) and Suswa (Kenya). By December 2020, it will have a transmission capacity of 2,000 MW. This will make Ethiopia the energy giant of East Africa, while Kenya will become the epicenter of electricity trading in this part of the continent.

“The project will initially be able to transfer 400 MW from Ethiopia to Kenya, but negotiations are under way to better match the capacity of the line to Kenyan demand,” said Joseph Njogore, first secretary at the Kenyan Ministry of Energy, at an energy forum held in Nairobi in August 2018, the website noted.

 

Final Call: IMF and World Bank real culprits in Africa’s debt crisis

This article debunks the myth of China colonizing Africa through a “debt trap” policy. It also has quotes from me on this subject. You can read more comments from me with this link to my post: A Brief Response: Marshall Plan for Africa or “Debt Trap?”

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FINAL CALL: IMF-and-World-Bank-real-culprits-in-Africa-debt-crisis.

BY JEHRON MUHAMMAD |  SEP 12, 2018 

Many Western press outlets, including CNN, have repeated a recent claim presented to the U.S. State Department that the “Chinese government is leveraging billions of dollars in debt to gain political leverage with developing countries.”

The phrase they use to accuse China is “debt book diplomacy,” a play on the past usage of the term “gunboat diplomacy” about U.S. policy. They accuse China of miring Africa in debt and “undercutting their sovereignty.”

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Chinese President Xi Jinping (R) meets with African Union Chair Paul Kagame who is President of Rwanda at the Great Hall of the People in Beijing, capital of China, Sept. 4, 2018. (Xinhua/Ju Peng)

Not to be outdone, ABC News chimed in: “China’s commercial presence in Africa has prompted complaints in some countries that the continent gets too little from the relationship. Africa is a major target of Beijing’s ‘Belt and Road’ initiative to build ports, highways and other trade-related infrastructure, but some critics in Tanzania, Kenya and other countries say they leave hosts with too much debt.”Pushing back, China claims to be helping African development, not piling up debt, one top China government official said.

“If we take a closer look at these African countries that are heavily in debt, China is not their main creditor,” its special envoy for Africa Xu Jinghy said, during a news conference. “It’s senseless and baseless to shift the blame onto China for debt problems.”

Claims that China is an “economic predator” in Africa, pillaging natural resources and dragging it into debt crisis are “as false as they are sensational,” the Xinhua official Chinese news agency said in a commentary.

According to African economic and political analyst Lawrence Freeman, “It is more than ironic that the West is complaining about Africa’s debt to China. Since the 1960s, Western nations, the IMF, World Bank, Paris Club, etc., have ‘looted’ Africa of hundreds of billions of dollars in bloated debt payments and through the manipulation of currencies, and terms of trade.

Of note is the fact that the anti- China accusation is fairly recent. An April 18 Financial Times article, headlined “African nations slipping into new debt crises,” did not mention China one time as the source of the continent’s debt crisis.

In fact the FT’s piece is critical of the International Monetary Fund and World Bank. “The increase in debt should have raised all sorts of flags and triggered triage, but it didn’t. Neither the International Monetary Fund nor the World Bank sounded the alarm,” the London-based financial paper reported.

In addition, the FT claimed some African countries were hit because “they borrowed in foreign currencies and were finding debt hard to finance after a significant depreciation.”

In 2017 Quartz Africa reported, again not mentioning China, that “African eurobond debt is growing to risky levels.” A eurobond, also referred to as sovereign bond, is a debt security issued by a national government and is denominated in a foreign currency, usually dollars, rather than the euro that its name implies.

This debt crises have been cyclical. Africa’s debt of the 1980s mushroomed to $270 billion and had many factors, according to Quartz, “depending on which side of the fence you’re on.”

Those events came full circle. Even though Quartz recognized the repeating “hallmarks” of unchecked corruption, poor governance, and political mileage investment, the “single catalytic factor to trigger debt unsustainability in Africa has always been the crash of commodity prices on the global market.”

The news service Reuters reported in May of 2017 that “most sub-Saharan African countries still rely on U.S. dollar-denominated debt to finance their economies. Some investors say this is sowing the seeds of future debt crises if local currencies devalue and make dollar debt repayments more expensive.”

The United Nations trade body UNCTAD estimates that Africa’s external debt rapidly grew to $443 billion by 2013 through bilateral borrowing, syndicated loans and bonds. But since then sharp currency devaluations across the continent have pushed up the cost of servicing this debt pile, which continues to grow, the agency said.

It’s no wonder over 50 African heads of state attended the Sept. 3-4 Forum on China-African Cooperation (FOCAC) in Beijing. During the forum China president Xi Jinping announced a hefty $60 billion package to compliment another $60 billion pledged at the 2015 summit.

This breaks down, according to press reports, to $15 billion in grants and interest free loans, $20 billion in credit lines, a $10 billion fund for development financing, $5 billion to finance imports from Africa and waving the debt of the poorest African nations diplomatically linked to China.

On top of President Jinping letting the numbers speak for themselves he had words for China’s detractors: “Only the people of China and Africa have the right to comment on whether China-Africa cooperation is doing well … . No one should deny the significant achievement of China-Africa cooperation based on their assumptions and speculations.”

The African Union chairman, Rwandan President Paul Kagame, has been heard to call Chinese aid and investment strategy in Africa “deeply transformational” and respectful of the continent’s global position.

He said FOCAC had grown into a powerful engine “of cooperation fully aligned with Africa’s Agenda 2063 and sustainable development goals.”

“Our growing ties with China do not come at anyone’s expense. The gains are enjoyed by all who do business with us. Building the capacity of African institutions to transact and monitor more effectively is what will make the biggest difference,” he said.

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FOCAC Summit: President Xi “China and Africa will walk together towards prosperity.”

{I have been telling my friends for years that China-Africa cooperation will change the African continent. With investments in vital categories of infrastructure, African nations can industrialize and develop advanced agro-manufacturing sectors. Economic sovereignty is now possible for African nations after 500 years of slavery and colonialism.

This recent FOCAC summit has placed Africa-China relations on center stage in front of the whole world. As Faki Mahamat, Chair of the African Union Commission said at the conference; China-Africa cooperation is a solid foundation for a new international order.(Watch the video of his remarks below)  

I will be writing more on the significance of the new era of China-Africa cooperation, but for now, we can and should rejoice. The world has changed for the better, even though there are dangerous pitfalls ahead. }

 

China To Invest $60 Billion in Africa over the Next Three Years; Xi Says: ‘Explore a New Path of International Relations’

Sept. 3, 2018

Chinese President Xi Jinping in his keynote of the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), announced that China would be investing $60 billion in Africa over the next three years, which would include $15 billion of interest-free and concessional loans, $20 billion of credit lines, a $10 billion special fund for development financing, a $5 billion special fund for financing imports from Africa, and encouraging investment by Chinese companies to the tune of $10 billion in Africa.

In his speech, President Xi said that China-Africa cooperation was based on the following principles;  The Five “No’s”:

No interference in African countries and pursuit of development paths that fit their national conditions;

No interference in African countries’ internal affairs;

No imposition of China’s will on African countries;

No attachment of political strings to assistance to Africa;

No seeking of selfish political gains in investment and financing cooperation with Africa.

“We welcome Africa to the fast train of Chinese development,” Xi said. Central to the cooperation has been the Belt and Road Initiative, which in Africa is in synergy with the African Union’s “Agenda 2063,” which marks the centennial of the official end of colonialism in Africa in 1963.

President Xi laid out the eight major initiatives that China would implement in collaboration with Africa in the coming three years:

1. In industrial promotion, China will set up a China-Africa trade expo in China in order to encourage Chinese investment in Africa.
2. It will also carry out 50 agricultural assistance programs, provide $147 million in food aid to African countries affected by natural disasters and send 500 agricultural experts to Africa.
3. With regard to infrastructure, China together with the African Union will formulate a China-Africa infrastructure cooperation program.
4. With regard to trade, China will increase its imports from Africa, in particular non-resources products.
5. On green development, China will undertake 50 projects focusing on climate change, ocean, desertification prevention and control, and wildlife protection.
6. On capacity building, China will set up 10 workshops in Africa to offer vocational training for young Africans. It will also 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.
7. In health care, China will upgrade 50 medical and health aid programs for Africa. On people-to-people exchanges, China will set up an institute of African studies and enhance exchanges with Africa on civilization.
8. And on peace and security, China will set up a China-Africa peace and security fund and continue providing free military aid to the African Union and will support countries in the Sahel region, and those bordering the Gulf of Aden and the Gulf of Guinea, in upholding security and combating terrorism in their regions.

African Union’s Moussa Faki Mahamat, Addresses FOCAC Conference

Please review this excellent speech by Faki Mahamat, Chair of the African Union Commission, at the Forum on China-Africa Cooperation. In his remarks the AU Chair called forthe urgent reform of the international financial institutions…That China-Africa cooperation is a solid foundation for a new international order…Our partnership [with China] can reshape the world’s geo-political landscape”He went onto say that the AU welcomes the Belt and Road Initiative and its synergy with AU’s “Agenda 2063.”

 

Presidents Ramaphosa and Kegame: Africa Supports the Belt and Road Initiative

In his speech to the FOCAC Summit, South African President Cyril Ramaphosa said, the Belt and Road Initiative was in the interests of the African nations. China-Africa cooperation, he said, was in the interests of the African nations. “In the values that it promotes, in the manner that it operates, and in the impact that it has on African countries. FOCAC refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe...It is premised on the African Union’s Agenda 2063, a vision that has been crafted in Africa, by Africans. It is a vision of an integrated, prosperous and peaceful Africa, driven by its own citizens and representing a dynamic force in the international arena.”

“Why do we support the Belt and Road Initiative?” Ramaphosa asked. “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.”

Ramaphosa was followed by Rwandan President Paul Kagame, the current rotating chairman of the African Union. “Africa wishes to be a full and integral part of the Belt and Road Initiative. The gains will be enjoyed by everyone.” Kagame praised in particular the personal commitment of President Xi to this initiative. “He has visited every region of our continent, including my country Rwanda. China has proven to be a win-win partner and dear friend,” Kagame said. UN Secretary General Antonio Guterres gave support to the message expressed by the African leaders, who said that “it is vital that current and future development cooperation contributes to peace, security and to building a ‘community of shared future for mankind,'” reiterating a concept that lies at the basis of President Xi’s conception of a new form of international relations. Guterres also expressed support for the importance of the strengthening South-South cooperation.