China’s Belt and Road Initiative- BRI (Courtesy of dailysabah.com)
February12, 2022
Lawrence Freeman
The Council on Foreign Relations (CFR) March 2021 report: China’s Belt and Road: Implications for the United States, would be humorous, if it was not so pitiful. In the course of almost 200 pages, the CFR, the premiere think tank of the U.S. Establishment, maligns China’s Belt and Road Initiative (BRI), but admits that the success of the BRI is the result of a failure of U.S. policy. The entire analysis is inherently flawed from the beginning because it proceeds from the axioms of the diseased doctrine of geo-politics, which views the world as a zero-sum game. Rather than understanding that the world is composed of human beings and sovereign nations who share a common interest, Anglo-American devotees of geopolitics only see two sides. In this case, China, and the U.S., where “an advantage to one side is a loss to the other.”
The CFR report is replete with a compilation of:
Contradictions
Speculation that BRI nations debt to China “might” or “could” lead to economic distress
China is not playing by the international rules imposed by Western international financial institutions
Recommendations that do not address the reasons for the success of the BRI, but instead propose new forms of political-economic warfare to undermine China.
The report’s Executive Summary bluntly states:
“U.S. inaction as much as Chinese assertiveness is responsible for the economic and strategic predicament in which the United States finds itself. U.S. withdrawal helped create the vacuum that China filled with BRI…it [the U.S.] has not met the inherent needs of the region.” (emphasis added)
US Infrastructure Investment?
US stopped loaning money to Africa for infrastructure for several decades
It is well known that beginning in the 1970s, the U.S. moved away from investing in hard infrastructure. Hard infrastructure is essential to the growth of the physical economy. It is irreplaceable in providing a platform that is the foundation of a healthy economy. The U.S. abandoned the needs of the majority of the nations of the world and foolishly sabotaged the U.S. economy as well.
According to estimates by the World Bank sited in this report:
“…$97 trillion needs to be spent on infrastructure globally by 2040 in order to maintain economic growth and to meet the UN Sustainable Development Goals, but an $18 trillion gap exists.”
The report acknowledges that Western financial institutions and governments do not fund hard infrastructure.
Should BRI nations be punished for trying to improve the lives of their population by accepting China’s financing help? The African continent, which has the largest infrastructure deficit in the world, encounters a gap upwards of $100 billion a year for essential infrastructure investment.
The report itself admits the global benefits of the BRI:
“Since BRI’s launch in 2013, Chinese banks and companies have financed and built everything from power plants, railways, highways, and ports to telecommunications infrastructure, fiber-optic cables, and smart cities around the world…BRI has the potential to meet long-standing developing country needs and spur global economic growth.” (emphasis added)
Geopolitics Governs Western Thinking
If the CFR were genuinely concerned about addressing the huge lack of hard infrastructure that is keeping nations underdeveloped and forcing billions of people around the world to live in poverty, they would propose the U.S. collaborate with the BRI. However, they are more concerned in trying to maintain U.S. unipolar dominance.
For those of you who do not know, the Council on Foreign Relations is a 100 year old arm of the Anglo-American establishment. Founded in 1921 as the American branch of the British Royal Institute for International Affairs, otherwise known as Chatham House, which was createdtwo years earlier. Chatham House was created by Lord Alfred Milner, then acting as Secretary of State for the British Empire’s colonies, through a vast trust funded by the estate of race-patriot Cecil Rhodes.
(Courtesy of slideshare.net)
The CFR report makes clear their fear of China usurping the U.S. as the one and only world superpower when they write that the BRI will “enable China to lock countries into Chinese ecosystems…“The report attacks China for the crime of violating the so called free-trade system by subsidizing “state-owned and non–market oriented Chinese companies” and that the BRI is “undermining world macroeconomic stability.”
Nevertheless, the report states: “The United States, even if not formally part of BRI, would likely benefit in some ways if BRI builds infrastructure that accelerates global economic growth.” (emphasis added)
The actual threat for the Western financial system, overburdened with quadrillions of dollars of derivatives and unpayable debts, is that it will be outperformed by China, dislodging the U.S. from its perch as the sole economic superpower.
No Debt Trap, Debt Crisis Instead
The CFR report is forced to admit there is no Chinese debt-trap, and no asset seizure.
“Although not setting explicit debt traps, China’s lending practices contribute to debt crisis along BRI.” However, “there has yet to be a case in which China has taken control of other countries’ infrastructure.”
Revealing their real concern, the report speculates, “the risk is clear that countries unable to repay their debts to China could become clients of China, deferring to it on political or strategic issues.”
The CFR report, while explicitly acknowledging multiple times that there is no debt-trap, argues that Chinese BRI loans are driving the “emerging debt crisis,” threatening todisruptthe global financial system. They write: “When these emerging debt crises in BRI countries materialize, they will undermine global economic growth and macroeconomic stability…”
They also allege that: “BRI participants [will be forced] to choose between meeting debt-service requirements to China or funding local economic recovery and critical medical services at a moment of historic crisis.” Isn’t that precisely what the World Bank and International Monetary Fund have been demanding of developing nations for the last several decades?
China dwarfs the West in infrastructure investment
Gyude More, the former Minister of Infrastructure in Liberia, has on multiple occasions pointed out the fallacies of claiming that China is causing debt distress in African nations. He estimates that Africa’s debt to China is between 20-23%, with a handful of African nations responsible for the majority of the debt. Approximately 80% of the continent’s debt is owed to multilateral Western financial institutions, the private sector, and hedge funds.
Moore cogently points out that prior to China’s involvement in the continent, African nations were forced to pay debt service and arrears on unpayable Western loans. Africans also received no benefit from multi-billion dollar Western extractive mining interests that looted Africa’s resources, contributing little or nothing to improving the conditions of life for Africans. With China there is a new “win-win” model. Moore explains that natural resources are instead used to secure loans from China to actually build vitally needed infrastructure that benefits the lives of Africans. Why should African nations reject this arrangement, which also comes with no demands for political of financial reform of the host nation? The West “doth protest too much, methinks.”
CFR Proposals: Impotent or Geopolitical?
The recommendations of the CFR report are a combination of impotency and geopolitical idiocy, arrogantly displaying no respect for the sovereignty of BRI nations. However, the report itself affirms that China’s BRI is a reality across the globe, and it is here to stay. All of the recommendations in this report avoid addressing what the BRI is providing; government subsidized credit for the construction of hard infrastructure. Instead, they recommend for the U.S. to menacingly wage geopolitical propaganda war against China and the BRI. Their suggestions include for the U.S. to; raise awareness of BRI risks, fund investigative journalism in BRI countries, champion anticorruption, work with IMF and World Bank to assess debt sustainability for BRI nations, and prepare for a conflict with BRI countries.
Notice the glaring absence of a positive development policy that promotes real economic growth around the world, demonstrating the bankruptcy of U.S. foreign policy, as well as the CFR.
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. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton.
Positive Developments for Nigeria : Railway Infrastructure and Value Addition in Agriculture
Bellow is a very informative article by my colleague, PD Lawton, creator of the website AfricanAfenda.net, on Nigeria’s expansion of its railroad network and its policy to become food self sufficient.
11 July 2021
Under the visionary leadership of President Muhammadu Buhari, Nigeria has become a key African partner in the Belt and Road Initiative. The benefits of Nigeria`s participation in the BRI are outlined in this article:
President Buhari has said that Nigeria cannot be seen as an island, that the country will never have peace and prosperity while its neighbours live in poverty.
In saying that, he expressed the spirit of the New Silk Road, the Belt and Road Initiative, and the ethos of a shared future for mankind.
It is for that reason that President Buhari has championed extension of the railway into Niger.The Nigerian Railway Modernization Project will revolutionize national and regional trade.
The railway network will be extended to Maradi in Niger which is one of the landlocked neighbours along with Burkina Faso and Chad who currently only have road access to sea ports in Accra in Ghana, Cotonou in Benin and Lome in Togo. In September 2020, the Nigerian government announced the funding of $1.9 billion to construct the 250km line from Kano to Maradin, a village in Niger. In Maradin, warehouses will be built for cargo.
As of the 12 January 2021 the contract for the $1.9 bn line from Kano -Maradi has been signed with Portuguese construction firm Mota- Engil.
For centuries the trans-Saharan trade route went from Maradi to Kano and was prosperous until colonialism and more recently destabilizing forces changed such fortunes. The original city of Maradi is ancient , dating back thousands of years to the time of the Silk Road.
The remaining section from Maradin to Maradi will be financed and built by Niger.The contractor for the Nigerian line is a Portuguese company (Mota-Engil). The line is being financed by two European banks.
The government has been heavily criticized for extending the rail network beyond its borders.The Kano-Maradi line goes from the northern capital, Kano, across the border into Niger to the town of Maradi which has a population of 267,000.
The critics say that Niger has nothing to offer. There are cities in Nigeria that have a higher income than the entire Niger State, which is geographically larger than Nigeria but mostly desert and desperately poor.The critics say why help Nigeriens when Nigerians are suffering ? The government is being accused internationally of trying to capture the trade that currently goes to the port of Cotonou in Benin and of favouring the Muslim north of Nigeria to garner popularity for President Buhari`s APC ( All Progressives Congress) party. So why extend the line to Niger?
Because Africa must unite.
Apart from gold deposits, Niger is considered to have only one asset, uranium.Since 1968, Areva, an 80% French state-owned corporation has obviously been the main beneficiary in a partnership which is definitely not `win-win`. Niger is the 4th largest uranium producer globally. It has high grade deposits. Areva ( now called Orano)pays 5.5% tax and royalties to the Nigerien government. When asked to raise this pathetic ammount, the extraction plant ceased service for a number of weeks and the tax rate remained unchanged.
Image : African arguments. Resident of Arlit sells the daily ration of water.
Mining in Africa is dominated by the City of London extractive interests. The level of tax and royalties paid to government is consistently low. Glencore Xstrata is one of the main culprits
Uranium is mined near the towns of Arlit and Akokan, 1200 km northeast of the capital, Niamey, on the western range of the Air mountains. The mined ore is transported by truck 1600 km to Parakou in Benin, from where it is transported by rail, 400 km to Cotonou Port and then exported.
Between them, Niger and Namibia, two of Africa`s most arid and impoverished countries, could be supplying all of Africa`s uranium, not if, but when, the continent turns to nuclear power. However, uranium should not be regarded as Niger`s primary asset. Instead we should regard the 23 million Nigeriens as the source of true wealth because it is they, given the creative freedom from absolute poverty, who have the potential to transform the economy of their country.
The African Development Bank is funding a program to strengthen Niger`s rural economy. Food shortages, malnutrition and outright starvation are a permanent situation for the majority of Niger`s rural population. In 2013, only 8% of the population had access to electricity. 82% had no access to sanitation. As of 2020, 15% of people have electricity. According to World Data, Niger has an annual energy consumption of 1.07 billion kWh which is 46kWh per person per year. Life expectancy is around 60. There are no railways at present.
If China has elliminated absolute poverty in one of its poorest and dryest regions, the Uygur Region, there is no reason at all why it cannot be done in a country like Niger, provided that Africa as a whole, adopts the Chinese methods of developing the physical economy. Niger is a partner in the BRI. On a State visit to Beijing in 2019, President Mahamadou Issoufou and President Xi Jinping agreed to strengthen ties within the framework of the Belt and Road Initiative,stressing the importance of carrying out key projects in infrastructure, people’s livelihood, energy and agriculture. China has also committed to assisting Niger with technology and skills transfer in all fields including building a modernized health care system.
To the critics of the Kano-Maradi railway we can say that maybe `today` Niger has little to offer but `tomorrow` it will be the Sahelian Region`s largest energy exporter and it will be Niger that powers industry from Mauritania to Sudan!
In 2015, as part of the Niger Renaissance Programme, the government hosted a conference in Niamey, capital of Niger, to initiate a national nuclear power program under the umbrella of the West African Integrated Nuclear Power Group (WAINPG) to study the feasibility of regional nuclear power capability.
The Nigerien High Authority for Atomic Energy (Haute Autorité Nigérienne à l’Energie Atomique (HANEA) have submitted Phase 1 of the feasability study to the IAEA. This was done in 2018. Japan has assisted in the funding of the proposal.
Niger, despite being arid. does have plentiful rainful around the Niger Delta but the rain is torrential for a period of weeks often leading to flooding. The government have built dykes but even these failed recently under the volume of water. Not only did this cause loss of life, homes and livelihoods for thousands, but many rice fields and granaries were ruined further contributing to food shortages.
NIGER AND BEYOND
The African Integrated High Speed Rail Network ( AIHSRN) includes a link from Lagos to Algiers which will directly link the Gulf of Guinea to the Mediterranean. The route traverses Niger which will be of immeasurable value to the economy of Nigeria, Niger and Algeria and will contribute greatly to the stability of the Sahel region.
Nigeria’s Minister of Transportation, Rt Hon Chibuike Rotimi Amaechi, conducted many interviews with the Nigerian press during the this year`s 60th Independence Anniversary in which he said:
“Last week, we awarded the contract for Kano to Maradi and people were screaming why are we taking it to Niger Republic. It’s important to take it to Niger because of economic reasons. Most coastal territories in Africa are competing better than us in terms of cargoes coming from not the hinterland, the landlocked countries. “We decided to join the market and compete so that we can make our seaports very viable. We decided to introduce the Kano-Maradi rail so that we can convey their goods from Maradi (a boundary village) to our ports with ease. I don’t know why people are screaming about it. It’s about economics, not politics.
You should know that railway generates employment and that as you move from Kano to Maradi you’re going to to go to Kano, Dutse, Kazaure, Daura, Katsina, Jibia before you get to Maradi, imagine the number of persons that you’ll create jobs for just at the beginning of the construction. “At the end of construction, imagine the number of businesses that you can site along with that area just because there is transportation. So when you talk about timing, poverty doesn’t have timing, unemployment is causing insecurity and banditry is a product of poverty, not just lack of education. So you have to find an alternative to those who participate in banditry. “So what we are trying to create is a source of growing the economy of Nigeria and creating opportunities for those who want to do real business, so they’ll be able to move their manufactured goods and reduce the cost of production around that area. That’s what we are trying to do.”
NIGERIA`S NATIONAL MODERNIZED RAILWAY NETWORK
The Nigerian Railway Modernization Project, will connect Lagos in the south west to Kano in the far north, by standard gauge railway.The modernized national rail network is around 3000 kilometers in length and of standard gauge. It will connect all major cities and link to the ports. The network will link to Niger.
It is replacing and expanding on the old colonial era narrow gauge system which was slow, inefficient and by 2013 all but collapsed with only the Lagos to Kano ( south to north) line operational. The average speed was 45km/h and the journey took 31 hours. With the completion of the Lagos-Ibadan line, that leg of the journey now takes less than 2 hours!
In 2006 an agreement was signed with the China Civil Engineering Construction Company for $8.3 billion. The entire project will cost $36 – $40 billion.The CCEC has, over the last years, constructed the Abuja-Kaduna Railway , Abuja Mass Transit Railway, Itapke-Warri Railway and now the Lagos-Ibadan line. The project, which is funded by China`s Exim Bank and the Nigerian government, is being built in segments to spread the cost over time.
The new metro light rail system in Abuja will be connected to the National Rail Network. Abuja Airport is also connected to the new metro network and the city centre (Abuja’s Central Business District). The Abuja Metro is the first light rail system in West Africa. The metro relieves traffic congestion, is reliable, fast and safe, and cheaper than local taxis.The metro will link Abuja with the towns of Nyanya, Kubwa, Mararaba and Lugbe in the near future.
Expansion is planned for the ports at Lekki and Bonny to make them deep water harbours of between 17 -18 metres deep. A new river port will be built at Warri and Ibom.
Lekki Port expansion is under construction. It will be Nigeria`s deepest sea port and is situated in the Lagos Free Trade Zone. It will be one of the most modern in West Africa. Minister of Transport, Chibuike Rotimi Amaechi, has tasked the project managers with commencement of commercial activities by 2022.
The Port Harcourt-Maiduguri rail line will link the north eastern region to the eastern sea port of Bonny which has been approved already, work will commence soon. From Bonny the line will go to Port Harcourt – Aba- Umuahia – Enugu – Makurdi – Lafia – Jos – Kafanchan – Bauchi – Gombe – Damaturu, and Maiduguri, with a spur from Port Harcourt to Owerri.
According to the Transport Minister Amaechi :
“Where we have about two seaports or river ports in Port Harcourt, you’ll be able to transport a lot of Iron Ore deposits from the North East through the Port Harcourt – Maiduguri rail. The completion of this project which we hope that if it doesn’t start this year, will start the first quarter of next year, the completion, will move cargo, create employment, create industrial development and it will grow the economy.”
Transport Minister Amaechi explained that ports and rail work together:
“Currently, Nigerians move about 30 million cargoes between Lagos and Kano in a year. The capacity of the Nigerian Railway Corporation as of today is about 200,000 cargoes per year. That’s appalling. So, if you want to make the factors of production to be cheap and make our goods competitive, then you must provide logistics, either the road, by air or by railway. But the cheapest form of transport in this regard is the railway because it’s subsidised by the government. So the idea of complying with the instruction by the president that all railways must terminate at the seaport is because you want to move your cargo. The moment you begin to move cargo, you’ll see the transformation. The movement of cargo will improve the industrial development of Nigeria.”
The Lagos to Calabar line will run along the coast. It will be 1,400 km and will link all the key sea and river ports.It will run from Calabar – Uyo – Aba – Port Harcourt – Yenogua – Otuoke – Ughelli – Warri – Sapele – Benin – Ore – Ijebu-Ode – Lagos.
The Abuja to Kaduna rail line is completed and in service since 2016. It is 186km long. Itakpe-Warri line is completed which is 326 kilometres long.
The Lagos-Ibadan line is the first double-track standard gauge modern railway in West Africa.It is 156km long. Track-laying of the high speed standard gauge railway from Lagos to Ibadan was constructed by the China Civil Engineering Construction Corporation (CCECC). The project was started in March 2017. The line is now in service and has 10 stations.
The main station is in Lagos and will act as the operations centre as well as a passenger terminus. Initially 3 pairs of trains will run each day. The maximum capacity that the project is designed to accommodate is an incredible 15 pairs (inward and outward bound) per day!
The building which is still under construction, will be a colossal 11,200 square meters. It will be the largest railway station in West Africa with a capacity for 6000 passengers. It was hoped that the building will be completed by the end of 2020.
Investment in infrastructure leads to the growth of ancillary industries. In the case of the Nigerian Railway Modernization Project, a new factory in Kajola, Ogun Province is just one example. The factory will bring an initial 5000 jobs and will be manufacturing the rolling stock for the new, modernized railways. It will then proceed to supplying the rest of West Africa and beyond!
In 2015, Nigeria initiated the Value Chain Development Program that is improving cassava and rice value chains for small farmers in targeted districts The program aims at increasing productivity in the staple sector, increasing food production and thereby reducing poverty.70% of Nigerians live in rural areas and are small farmers who produce 90% of the nation`s agricultural products. Dire poverty in Nigeria is mostly in rural, agriculture-based communities and it is these communities that the government are targeting.
“The Economic Recovery and Growth Plan (ERGP) is a Medium Term Plan for 2017 – 2020, developed by the Administration of President Muhammadu Buhari for the purpose of restoring economic growth while leveraging the ingenuity and resilience of the Nigerian people – the nation’s most priceless assets.”
The program aims to put the oil-based economy on an entirely different trajectory to transform the economy and thereby alleviate poverty.Key components are the Nigerian Railway Modernization Project which is part of the Nigeria Integrated Infrastructure Master Plan which includes the construction of new, or modernization of existing, ports, bridges and road networks.
According to the Statehouse website:
“This Plan will use science, technology and innovation to drive growth. It also provides a blueprint for laying the foundation for future generations by focusing on building the capabilities of the youths of Nigeria to be able to take the country into the future.”
“Using agriculture to achieve food security, create jobs and save foreign exchange for food imports. Plans are already in place for national self-sufficiency in rice by 2018 and wheat by 2019/2020. Successful harvests will contribute in reducing inflation and promoting economic diversification.”
The Nigerian Agricultural Transformation Agenda was initiated in 2013. It is a program to alleviate rural poverty and increase production.Since the discovery of crude oil, IMF`s globalist policy has been to advise on oil export and food import which over the years harmed the country`s agricultural industry with cheap foreign imports having a negative effect on domestic production.
Rice self-sufficiency had reached 84% by start of 2019. Government and private sector initiatives have provided support,credit,training and seed, along with even distribution of rice milling (polishing) plants across all regions.
Mechanization solutions and the case for small modular processing plants are some of the innovative ideas being pushed by Richard Ogundele, CEO of JMSF Agribusiness Nigeria, a key player in the agricultural transformation program. According to him:
“Another thing that we could see working here, is SME (Small and Medium Enterprises) branding. The farmers who grow them and the processors at that lower level, need to understand quality assurance from the start to the market end. And that`s where branding comes in, packaging, handling,storage and distribution. So opportunity for logistics is also there. Logistics in agriculture is still a challenge across Nigeria, storage, transportation, packaging, handling. We need improvements in this value chain service provision area. So if anyone is interested in this sector, we can always guide them and talk it through. And of course there will be the multiplying effect on the economy because more jobs will be created along the value chain for those who will be offering services to the core operations within the sector.”
Infrastructure, including water infrastructure, is having an immensely positive effect on production.
Nigeria is currently the largest rice producing country in Africa.
This is largely the result of conscientious efforts by the current administration to place more emphasis on agrarian production. The move was aimed at reducing the nation’s over reliance on oil which has in the past year proved economically devastating as oil prices plummeted on the global market.
The government is also keen on improving the country’s self-sufficiency and reducing the commodity’s import burden that currently runs into almost $400 million annually. Rice farming in the country has received a boost from the local central bank through the Anchor Borrowers Program that avails loans and distributes requisite tools to farmers to boost production. By the end of 2017, the Federal Ministry of Agriculture director claimed that the country had indeed reached self-sufficiency in the commodity. According to a report from the ministry, the country’s production capacity had reached 15 million metric tons. This would translate to major savings as the country would no longer need to import the commodity. The country in fact consumes about 8 million tons, a figure that rises by about 6% annually. It is therefore projected that with around 34 states involved in rice cultivation the country would have a surplus for export by the year 2019. The country is taking steps to control the rampant smuggling that has had a negative impact on local market prices.
Rice is the Nigerian staple. Local Nigerian varieties of rice are found to be of a higher nutritional value than imported rice.The local rice is not as highly polished which increases nutritional value and it consumed fresher compared to imported rice which can be many years old.
Nigeria`s self-sufficiency policy has caused `rice wars` with international exporters flooding the market with super cheap, low-quality produce. This has resulted in a series of protests from within the country as people demand cheap rice. It has been difficult for the government to convince the nation that by supporting the domestic market, they will have a better product which will become cheaper over time as production increases.
The black-market for rice is a continuing problem as Nigeria`s expansive borders are porous and rice is routinely smuggled across from Benin.
In September 2020 the government stopped tomato imports and has adopted a similar tactic to boost tomato production by value adding and processing into puree, thereby supporting domestic tomato growers and to encourage job creation.
The Nigerian government recently announced the release of funding for 300,000 new affordable homes which are to be built with 90% local materials, further supporting the national economy.
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. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton
Watch the video interview below with Olawale A-Rasheed, CEO of Abuja, Nigeria-based African Railway Consulting Ltd, who provides an excellent discussion of Africa’s needs for massive railroad construction.
The Silent Revolution in African Rail
2 June 2021
In this new podcast of the Belt and Road Institute in Sweden (BRIX), host Hussein Askary discusses with our guest Olawale A-Rasheed, CEO of Abuja, Nigeria-based African Railway Consulting Ltd, the current situation and future plans for railway connectivity in the African continent. We try to answer the following questions: – What is the status of transport sector in Africa, West Africa, and Nigeria? – What projects are completed, under construction? Who is building them? – What are the plans to develop this sector? Trans-African High-speed rail? – What is the role of China and the BRI in this process, and what can the U.S. and Europe contribute to it? Why they should learn from China in focusing on building the hard infrastructure in Africa? – There are many initiatives proposed by the U.S., the UK, and the EU to “rival” the BRI and China in Africa. Are these realistic? Wouldn’t it be better if the West and China join hands with Africa to reach the development goals? Mr. Rasheed is also the Director of the African Rail Roundtable and editor of the specialized magazine Rail Business (http://railbus.com.ng/)
“The real friends of Africa now are those trying to bridge the infrastructure deficit…..China has done it. It has pumped billions of dollars into the Belt and Road Initiative. Now, whatever critisism they have on that initiative, it has helped Africa. It has opened up Africa and it has challenged the world, that to be a friend of Africa, come and help us to build roads, bridges, have vision, high cities, power, and all those. So it is a clarion call to all friends of Africa in the West, East, Asia that HARD INFRASTRUCTURE IS WHAT WE NEED TO GET OUT OF POVERTY.”
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. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton
The Truth: It is good that China Is Investing in Africa’s Energy and Transportation Infrastructure
Lawrence Freeman
April 8, 2021
Below are two articles examining China’s investment policy in Africa that should be read to learn the truth about China’s lending to the continent. One, is a briefing paper from China Africa Research Initiative (CARI) entitled, Twenty Years of Data on China’s Africa Lending. The second is entitled, “Why Substantial Chinese FDI is Flowing into Africa, by Shirly Yu. Combined, both papers provide a thorough analysis of the positive contribution of Chinese investment in Africa, surpassing the United States in all categories. As many African leaders know, without China’s contribution to Africa’s development, especially in infrastructure, Africa would be worse off. There is absolutely no indication that the U.S. and the West would fill that void.
It is undeniable that China has invested heavily in the development of Africa over the last two decades. Ignore the claptrap allegations of a deliberate Chinese debt-trap policy to seize control over Africa’s resources. It is nonsense and has not happened; not once, not in a single African nation.
According to CARI’s data base, from 2000-2019, China has made $157 billion in loans to Africa. Of these 1,077 loans, 85% have been in categories of infrastructure, of which 65% have been in energy and transportation. According to CARI, only 13% of Africa’s debt is owed to China. The largest portion of Africa’s debt is owed to multilateral institutions at 32%, followed by loans from private bond holders. Outside of Angola, only 8% of Chinese lending was for resource backed loans. 90% of the contractors in Africa from China are private Chinese companies, not state owned enterprises (SOEs). Also, 90 % of Foreign Direct Investment (FDI) is from private Chinese companies, although SOEs are the largest investors in Africa in total value.
President Biden has recently suggested that the U.S. and Europe should lead a western version of China’s Belt and Road (BRI). If it were to be as productive as China[‘s (BRI), African nations would benefit greatly, especially in this challenging economic period.
Excerpts from Shirly Yu:
“Make no mistake, Chinese state-owned enterprises (SOEs) are still the largest investors in Africa by value and continue to dominate the energy, transportation and resources sectors due to the strategic nature and long-haul return of these investments. For instance, one third of Africa’s power grid and energy infrastructure has been financed and constructed by state-owned Chinese companies since 2010. China is the most significant foreign contributor through SOEs and state-owned banks to Africa’s energy development.
“By 2034, Africa’s labour force is forecast to surpass that of China and India combined. By 2050, the African population is expected to be 2.5 billion, while China’s population will decline to below 1 billion. With these figures in mind, Africa’s young labour force is exactly what China’s labour-intensive manufacturers seek today.”
IN 2000, WE RECORDED ONLY three Chinese lenders, financing 14 projects, with an average value of just US$ 10 million. Over the next 19 years, over 30 Chinese lenders would commit loans to African governments and state owned enterprises. Since 2010, Chinese financiers have financed an average of 71 projects per year, at an average value of US$ 180 million.
The four biggest Chinese banks involved with lending to African countries are China Eximbank, CDB, ICBC, and BOC. China Eximbank–which is China’s official export credit agency, and also the only bank offering government
subsidized foreign aid concessional loans–is the largest and since 2000 accounts for 56 percent of all loans.
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. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton
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.
Deborah Brautigam, an expert on China-Africa relations, exposes the fraud of China’s debt-trap diplomacy in her report: A Critical look at Chinese ‘debt-trap diplomacy’ Brautigam, who is director of the Johns Hopkins Center for China-Africa Research Initiative, writes unequivocally that there is no evidence of an intentional effort to trap African nations into owing debt to China. China is not manipulating African nations in an attempt to control their resources. Ironically this is what the Western institutions did to African nations following their independence from colonialism. Whether out of ignorance and/or prejudice, Africans and Westerners have been repeating unfounded propaganda that China is the new colonizer of Africa. It is time to finally end this malicious mantra.
Excerpts:
“The Johns Hopkins School of Advanced International Studies curates a database on Chinese lending to Africa (Brautigam & Hwang, 2016). It has information on about more than 1000 loans and, so far, in Africa, 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’. Angola, for example, has borrowed a huge amount from China. Of course, many of these loans are backed by Angola’s oil exports, but this is a commercial transaction. China is not getting huge strategic advantage in that relationship. Similarly, others have examined Chinese lending elsewhere in the world – some 3000 cases – and while some projects have been cancelled or renegotiated, none, aside from the single port in Sri Lanka, has been used to support the idea that the Chinese are seizing strategic assets when countries run into trouble with loan repayment (Kratz, Feng, & Wright, 2019).
The evidence so far, including the Sri Lankan case, shows that the drumbeat of alarm about Chinese banks’ funding of infrastructure across the BRI and beyond is overblown. In a study we conducted using our data on Chinese lending and African debt distress through 2017, China was a major player in only three low-income African countries that were considered by the IMF to be debt distressed or on the verge of debt distress (Eom, Brautigam, & Benabdallah, 2018). A similar country-by-country analysis that included use of our data shows that the Chinese are, by and large, not the major player in African debt distress (Jubilee Debt Campaign, 2018). Therefore, the role of China in African debt distress was limited when one remembers that there are 54 countries in Africa.”
Celebrating the inauguration of the new Addis Ababa to Djibouti railway on October 6, 2016, which I attended
Monday, December 2, 2019
China-Ethiopia dialogue highlights sustainable investment under BRI
BEIJING, Dec. 1 (Xinhua) — Ethiopia is hoping to attract more sustainable investment from Chinese enterprises as fruitful cooperations have been carried out under the Belt and Road Initiative (BRI).
At the China-Ethiopia High-Level Dialogue on Sustainable Investment held in Beijing on Friday, both Chinese and Ethiopian officials expressed their hope to consolidate collaborations to boost the achievements of sustainable development goals (SDGs).
Aschalew Tadesse Mecheso, a senior official with Ethiopian Investment Commission (EIC), said Ethiopia looks forward to more investment in the sectors of information and communication technology and light industries so as to create more jobs for young people who account for around 70 percent of the country’s population.
Aiming to facilitate knowledge exchanges and build networks to promote sustainable investment in Ethiopia, the event attracted over 200 participants from governments, industries, development agencies and think tanks.
Guo Xuejun with the Ministry of Foreign Affairs took the Addis Ababa-Djibouti Railway as an example of the fruitful cooperations between the two countries under the BRI.
Apart from the railway that has significantly shortened the time of transporting goods from Ethiopia to Djibouti, he also mentioned a new economic cluster that is emerging along the railway with the construction and development of several industrial parks.
China looks forward to working with Ethiopia to initiate more connectivity projects that are high-quality, sustainable, resilient, affordable, inclusive, accessible and broadly beneficial, Guo said.
The country is also dedicated to promoting trade and investment liberalization and facilitation, opposes protectionism and aims to make greater contributions to the implementation of the 2030 Agenda for Sustainable Development, he said.
Beate Trankmann, Resident Representative of the United Nations Development Programme (UNDP) in China, said the BRI’s key projects, which focus on connectivity and integration, could help unlock the funding and know-how to fulfill the SDGs, if relevant investments follow sustainability criteria and principles of the SDGs.
At the event, organized by the UNDP and supported by the Ministry of Foreign Affairs, China’s embassy in Ethiopia and the EIC, investors also discussed the opportunities and challenges to invest in Ethiopia
Editor’s Note: Lawrence Freeman is a political-economic analyst for Africa with 30 years of experience in Africa promoting infrastructure development policies. The article reflects the author’s opinions, and not necessarily the views of CGTN.
China’s Belt and Road Initiative (BRI) introduced by President Xi Jinping in 2013 is changing the world economy. China has signed cooperation documents on the BRI with 136 countries and 30 international organizations as of the end of July. Four years later, in May 2017, President Xi personally announced the creation of the China International Import Expo (CIIE) that took place in November 2018.
The global BRI, which now involves the majority of nations in the world, is creating new infrastructure platforms to stimulate economic growth. China’s second CIIE will again be held in Shanghai from November 5 to 10, 2019. Although the CIIE is focused on attracting imports to China’s large domestic market, it complements the BRI, demonstrating China’s emergence as an export-import engine promoting global development.
President Xi and African Heads of State (courtesy of Al Jazeera)
This excellent article, once again refutes the slander that China is imposing a ‘debt-trap’ on African nations. The author, Ehizuelen Michael Mitchell Omoruyi, executive director of the Center for Nigerian Studies at the Institute of African Studies, Zhejiang Normal University, shows how China through the Belt and Road is developing vital infrastructure for Africa.
“Millions of articles have been written on China-Africa engagement that involve the terms “Sino-optimism,” “Sino-pragmatism” and “Sino-pessimism.” With that said, somehow, China has also been mentioned in some Western media in a negative light, including headlines with phrases such as “Can China circumvent the middle-income trap?” “China’s trapped transition,” “The Thucydides Trap” and the “debt trap.”
“As for the debt trap, the term refers to the idea that Chinese loans in the continent of Africa are a strategy by the Middle Kingdom to extract concessions and purchase allegiance. I do not concur! China’s involvement with African nations is far beyond building railways, bridges and roads…
China Announces $1 Billion Belt and Road Africa Fund Led by South African
Announced July 3 on the sidelines of the Summer Davos Meeting World Economic Forum in Dalian, China, this $1 billion investment fund also achieves another first–in that it will be not be run by the state government–thus being China’s first “NGO.” It will also notably be led, not by a Chinese, but by a South African.
Intended to be up and running by September, this fund–to be capitalized by wealthy Chinese businessmen and their families–will be headed by Dr. Iqbal Survé, “born and educated in Cape Town” (according to his website). Survé had started his own, Sekunjalo investment fund in 1997, leaving his medical career at the call of Nelson Mandela, who was seeking local investors to lead the development of the economy. Dr. Survé had become “affectionately known as the ‘Struggle Doctor’ because of his provision of medical care towards victims of apartheid brutality,” says his “about” page.
Since then Survé came to serve as chair of the BRICS Business Council for South Africa, and most recently as a member of the Business Council Chairman for the five BRICS countries. A hedge fund operator he definitely is not. Commenting from China, Dr. Survé said, “The discussions that we’ve had with Chinese business people, state-owned enterprises and family offices, have resulted in the establishment of this fund. Africa is ready to grow and is heading towards a $5 trillion economy. The [Africans] have seen how China was able to grow from 1980, when China made up only 2% of the global GDP when compared to today, where China makes up 19% of the global GDP.
This fund is a great boost for the development of Africa.” The fund will be overseen by a Belt and Road Business Council, eventually to grow to 1,000 Chinese and African members.
Everyday, nations around the world are experiencing economic growth by participating in China’s Belt and Road Initiative-BRI. For a truly global transformation, the United States must join this new paradigm of development. The most productive way to enhance relations with China, is for President Trump, at next week’s G-20 meeting, to discuss with President Xi Jinping, the US joining the BRI. This would create an unprecedented level of economic growth throughout the world. It would also be a brilliant flank against those voices in the US, and internationally, who are demonizing China, and trying two divide our two great nations.
{Independent}: Belt and Road Contributing to Prosperity in Africa
A feature today in the South African {Independent Online Business Report} publication reviews the benefits of the Belt and Road Initiative for Africa, saying that Liberia, Morocco, and Tunisia have benefited from African development projects, as has Ethiopia from the Addis Ababa Light Rail, which cut travel time to and from the city. Through the BRI, China has also built a light-rail system in Abuja, Nigeria, the first to be built in Western Africa. Chinese construction companies have further assisted Angola in rebuilding its Benguela Railway, which had been destroyed in the civil war. The country can now transport goods from Angola’s western coastline to the border of the Democratic Republic of Congo.
Chinese-funded projects have also led to the construction of the Isimba and Karuma hydroelectric power stations, two new sources of electricity to Uganda, which will ultimately aid development. In Rwanda, road construction projects have brought young citizens into construction through their employment. This ultimately improved their welfare and provided labor skills. In the spirit of BRI’s trade ambitions, Egypt now looks to make the idea of the Cape-to-Cairo road a reality. Since taking the reins as 2019-2020 chairperson of the African Union, Abdel Fattah el-Sisi of Egypt plans to construct a superhighway through multiple African nations, eventually ending in Cape Town, to open
countries to trading in the Cape’s ports and in Cairo, Egypt’s gateway to the European Union.
German Mittelstand Supports New Silk Road
China’s proposed Belt and Road Initiative (BRI) has been creating opportunities for German enterprises, said Hans von Helldorff, chairman of the board of the Federal Association of German Silk Road Initiative (BVDSI), in an interview with Xinhua on June 17.
“The future markets and the new markets, for example, are in Asia, Africa, as well as Eastern and Southern Europe. They are not so well-connected. China has been providing the connections, thus it will generate great opportunities,” said von Helldorff, stating that new markets are needed by Germany’s Mittelstand firms.
Von Helldorff said that, thanks to the inter-connectivity, businesses have already been on the rise in some German cities, such as Hamburg and Duisburg. Many small and medium-sized companies in Germany got contracts with seaborne and logistics enterprises from China and other countries for local registration, legal, accounting, and tax services, von Helldorff stated.
“The infrastructure projects along the Belt and Road countries also need a lot of know-how. Harbor-related, road-related, train-related, etc. We have to open our eyes and participate in them,” von Helldorff said, declaring that the strengths of German businesses can contribute as an “innovation and investment engine.”
Speaking about prevailing doubts and worries about the BRI, allegations that the initiative might be politically motivated and harm local industries, von Helldorff said that some of them are simply clichés and that some are unfounded.
“The BVDSI sees China as a fast-growing economy that follows a plan. We need to sit and make eye-to-eye contacts and negotiations. Only cooperation in the sense of fair competition is for the benefit of humanity,” von Helldorff said. The BVDSI, founded in March 2019, is a business association serving as a platform for the interests of small- and medium-sized German companies. The BVDSI plans to organize a forum later this year in Germany on the BRI for partners to establish project-related contacts.
