China & Russia-Africa Leads to Economic Growth; Not Debt Trap

Below you will read about the success of the second segment of Kenya’s Standard Gauge Railroad, and President President Cyril Ramaphosa’s firm refutation of allegations that a number of countries in Africa are being led into a debt trap by China and Russia

“Proponents of the New Paradigm in Africa have a new milestone to celebrate, with the opening of a new segment of the Mombasa-Kisumu Standard Gauge Rail (SGR) line in Kenya. On October 16, Kenyan President Uhuru Kenyatta led a celebration to open Segment 2A, a 120 kilometer (75 mile) extension from the capital (and current terminus) of Nairobi, to Naivasha, a large town northwest of the capital. Opening of this—admittedly rather short—segment nonetheless brings the SGR project one step closer to its planned destination: Kampala, the capital city of neighboring, landlocked Uganda.”

Stunning Progress

Kenya’s SGR project, the most advanced in Sub-Saharan Africa, began in 2014, when the country began construction of a modern, standard gauge (1.435 meter) rail line from the port of Mombasa on the Indian Ocean, northwest to the nation’s capital of Nairobi, a distance of 450 km (275 mi). Opened in 2017, on Madaraka Day—Kenyan Independence Day, when the people took political control of their destiny from the British Empire on June 1, 1963— the rail line has been a huge success, cutting transport and delivery time significantly for both goods and people. Exceeding expectations, the railway transported two million passengers within its first 17 months; and in 2018, its first full year of operation, carried over 5 million tons of freight.

The Mombasa-Nairobi line was initiated in 2009 discussion between the China Road and Bridge Corporation and the Kenyan government, as reported by P.D. Lawson in the April 27, 2018 EIR. China’s Exim Bank extended credit for 90% of the project. By May 2016, initial track laying was completed in just over 1 year. Passenger service was opened May 31, 2017, eighteen months ahead of schedule. Freight services commenced in January 2018. Plans are now underway to electrify the segment from Mombasa to Nairobi, which will greatly lower operating costs.

Benefits of the new, faster technology now extend far beyond mere transport, where the railway has taken hundreds of trucks (and buses) off the notoriously congested highways, making them safer and more useable for the population.

With the increased capacity and speed of freight transport, Kenya’s exports to the East African Community (including neighboring states Uganda, Tanzania and South Sudan) have hit a three-year high in the first eight months of 2019. Not only have government earnings from domestically produced goods increased 6% compared to 2018, but Kenya’s domestic consumption of electricity—certainly not a nation known for its over consumption of this resource—has increased 3.2% in the first 8 months of 2019.

Uhuru Kenyatta, President of the Republic of Kenya.
President Kenyatta has launched additional infrastructure projects, building on the Kenya Vision 2030 plan. In addition to the opening of SGR Section 2A on October 16, he has announced plans for construction of an inland container depot (ICD) at Naivasha (to store or transfer goods from rail to truck, or from SGR to the old meter gauge rail, MGR); a new 23 km expressway in Nairobi; and a water project in rural Kimuku (stemming from a natural spring accidentally discovered during construction of the rail line!). He wants to create a Special Economic Zone—to include the port of Mombasa—to further speed up freight delivery.

EIR magazine, Nov. 1, 2019: “Kenyan Standard Gauge Successful in Looking Beyond the Here and Now

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NEWS October 28, 2019

Russia-Africa Summit: African countries not being led into debt trap —South Africa’s Ramaphosa

President Cyril Ramaphosa on Monday refuted allegations that a number of countries in Africa are being led into a debt trap as they take up loans to fund a number of projects.

Ramaphosa said this during his weekly address from the Desk of the President in Cape Town, after returning from the Russia-Africa Summit held in Sochi last week.

“One need only look at initiatives such as the Forum on China-Africa Cooperation, which was last held in Beijing in 2018, to see that the focus is now on partnership for mutual benefit, on development, trade and investment cooperation and integration,” Ramaphosa said.

He lambasted remarks which label initiatives like the recent Russia-Africa Summit as an attempt by world powers to expand their geopolitical influence. African countries had taken part in the  summit to discuss ways of how to increase trade and cooperation between Russia and Africa. He said the summit was a sign of the growing economic importance of Africa on the world stage.

“What we are witnessing is a dramatic re-balancing of the relationship between the world’s advanced economies and the African continent,” he said.

African countries have consistently affirmed that Africa no longer wants to be passive recipients of foreign aid, said Ramaphosa. The president said African countries are developing and their economies are increasingly in need of foreign direct investment.

“We are ever mindful of our colonial history, where the economies of Europe were able to industrialize and develop by extracting resources from Africa, all the while leaving the colonies underdeveloped,” said Ramaphosa.

Even now, African countries are still trying to stop the extraction of its resources, this time in the form of illicit financial flows through commercial transactions, tax evasion, transfer pricing and illegal activities that cost the continent more than 50 billion dollars a year, according to Ramaphosa. The age where “development” was imposed from outside without taking into account the material conditions and respective requirements of our countries is now past, the president said.

“China, Russia, Organisation for Economic Cooperation and Development countries and other large economies are eager to forge greater economic ties with African countries. “This is because they want to harness the current climate of reform, the deepening of good governance, macro-economic stability and the opening up of economies across the continent for mutual benefit,” the president said.

 

China Helps Ghana Industrialize. First Ever Russia-Africa Summit

June 23, 2019

You will read below the continued cooperation of Russia and China with Africa in promoting economic growth on the continent. In this respect, the US is largely absent in Africa. President Trump would be wise to correct this flawed US policy, and join Russia and China in engaging in the development of African nations. 

Ghanaweb.com

Help Ghana industrialize – Business Development Minister tells China

 

Ibrahim Mohammed Awal 750x406
Ghana’s Minister for Business Development, Dr Ibrahim Mohammed Awal

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Minister for Business Development, Dr Ibrahim Mohammed Awal, has appealed to China not to be a mere trading partner but to also support Ghana’s efforts to become a manufacturing hub in West Africa.

He said while Ghana appreciated and looked forward to growth in the trade relations between the two countries, it was critical for China to prioritize manufacturing in Ghana as well.

Opening the third China Trade Week in Accra yesterday, Dr Awal said his appeal was premised on the government’s industrialization drive as one of the major pillars to Ghana’s accelerated, all-inclusive and sustainable development.

The three-day event was organised by MIE Events, a global event organizer, as a business to business trade show featuring over 100 Chinese manufacturers looking to develop direct trading partnerships and links with local businesses.

It was also a platform for the local business community to explore business opportunities in China to enhance trade cooperation between the two countries.

It is a platform for both Ghanaian and Chinese businesses and brands to increase their visibility, find vendor partners and distributors in each other’s country.

Organizing for First-Ever Russia-Africa Summit in October Underway

The Kremlin announced officially on May 28 that the first-ever Russia-Africa Summit will be held on Oct. 24, 2019, in Sochi. It will be co-chaired by President Vladimir Putin and current chair of the African Union, Egyptian President Abdel Fattah el-Sisi. All the heads of state of Africa are invited to attend, as well as leaders of major sub-regional associations and organizations. An economic forum will be held for Russian and African officials and businessmen the day before (Oct. 23), which some 3,000 African businessmen are expected to attend.

President Putin first proposed the idea of such a summit at the 2018 BRICS summit in South Africa, and his aide, Yury Ushakov, is now chairing the summit Organizing Committee. Russian organizers describe the summit as “of unprecedented scale” for Russia, whose intent is to provide “a strategically important step towards creating the most favorable conditions to develop trade and economic relations and diversity the forms and areas of Russian-African cooperation.”

Preparatory meetings are already being held, including a Russia-Africa Business Dialogue organized as part of the St. Petersburg Forum; a Russia-Africa Economic Forum being held in Moscow yesterday and today, along with the 26th annual shareholders meeting of the African Export-Import Bank, which is being held in Moscow for the first time; and a Russia-Africa Parliamentary Conference on July 1-3. Work started in April on drafting a document to be titled “Russia-Africa: Shared Vision 2030,” involving people from the African continent and Russians.