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

Some Western media and politicians have recently created the phrase “debtbook diplomacy” to accuse China of “miring nations in debt” and “undercutting their sovereignty.”

According to CNN, a new report presented to the US State Department claims the “Chinese government is leveraging billions of dollars in debt to gain political leverage with developing countries.”

“This phrase ‘debtbook diplomacy’ shows the West is nervous of China-Africa cooperation. ‘Debtbook diplomacy’ is what they did to Africa for decades, but now China is actually helping African nations rid themselves of ‘the debt trap’ set by the West,” said Wang Yiwei, director of the Institute of International Affairs at Renmin University of China in Beijing.

The West left African countries with a heavy debt on projects and failed to support their sustainable development, or to increase productivity and help them realize self-reliance, Wang noted. “Western countries wanted Africa to become their raw materials supplier while maintaining their post-colonial influence over the continent. This prevented African countries from realizing their own industrialization, Wang said.

China, on the other hand, is helping the nations move toward self-reliance and industrialization. The West doesn’t like that and this is why it is attempting to slander China, Wang added.

Xu Weizhong, deputy director of the China Institutes of Contemporary International Relations’ Institute of West Asian and African Studies, said that “Africa needs a lot of investment to build infrastructure, and China’s loans, which have increased African countries’ debt, are necessary for their development.”

China’s assistance to Africa differs from what the West offers. China has a “crucial principle,” which is to respect African countries’ will and conditions. China has never forced African countries to accept loans on large infrastructure projects beyond their ability to pay, Wang said.

“China and Africa have walked an extraordinary path in developing relations and cooperation, and our peoples have benefited greatly from it,” Assistant Foreign Minister Chen Xiaodong said at the opening ceremony of the Seventh China-Africa Think Tank Forum in Beijing on July 4.

“A minority of Westerners are blinded by their ‘pride and prejudice’ and choose not to see this… maybe that is what they call ‘sour grapes’?” Chen said.

West is largest debt holder

Data shows that Western countries and West-led organizations are the largest owners of African debt, not China, Shen Shiwei, a research fellow at the Charhar Institute and former government relations and business consultant for Chinese enterprises in Africa, said in an article published on CGTN’s website.

Research from SAIS and the China Africa Research Initiative at Johns Hopkins University shows that China has provided loans worth $114.4 billion to Africa from 2000-2016, which accounts for 1.8 percent of Africa’s total external debt. 

“The IMF and World Bank own 36 percent of African debt. These multilateral financial institutions and other giant investors in Europe and the US have far stronger leverage [than China],” Shen noted in his article.

“For historical reasons, the West has many interests in Africa. Those that are reasonable should be respected when we cooperate with Africa. But for those that are unreasonable, should China and African countries continue to respect them? Before accusing China, the West should think about this carefully,” Xu said                   (emphasis added)

 

China and US Should Jointly Partner with Africa to Transform the Continent

It has been my firm belief for several years that, if China and the US jointly partnered with African nations, we can eliminate poverty and hunger across the continent. Development of Africa is not a “zero sum game.” Africa’s infrastructure deficit is estimated in the trillions of dollars for energy, rail, ports, roads, new waterways, and much more. There is no part of Africa that could not be developed, if the two largest economies worked with African nations. China’s Belt and Road Initiative is an excellent vehicle for such collaboration between Presidents Xi, and Trump. Below is a useful article reporting on US and Chines companies working together in Africa

AFRICA IN FOCUS

“American companies and Chinese Belt and Road in Africa”

Yun Sun 

“When it comes to Africa, it is no secret that the United States and China have very different philosophies. China adopts a more state-led approach, with state-owned enterprises and policy banks spearheading Africa’s infrastructure development. The U.S. is more willing to let private companies and the market take the lead on commercial development, while the U.S. government itself puts more emphasis on the continent’s capacity building and governance challenges…

“As China expands its Belt and Road Initiative (BRI) in Africa, government-level U.S.-China cooperation in Africa continues to be scarce. However, this trend contrasts sharply with the growing collaboration between Chinese and American companies in infrastructure projects on the continent. Indeed, although the Chinese projects and financing have the tradition of favoring Chinese contractors and providers, the technical advantages of some American companies have made them the beneficiary of the Chinese BRI campaign…”

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Europe Must Address Poverty in Africa to Deal With Migration Crisis


Illustration: Luo Xuan/GT

The just-concluded EU Summit on migration has come up with measures like securing centers for migrants to process asylum claims, strengthening external border controls, and boosting financing for Turkey and countries in North Africa. But these are old solutions to old problems.

Since 2015, the EU has been working at full capacity to overcome the migration crisis. EU member states received over 1.2 million first-time asylum applications in 2015, more than double that of the previous year. But it seems that the European continent is still working in the same old way to try to prevent the entry of immigrants and not to address the causes of migration. Even if we assume these measures bring success in reducing immigration for some time, the EU will later be surprised when migrants use other means and methods to migrate, because the causes of migration still exist.

The root of migration is poverty. The African continent has suffered occupation and war for many decades. Many African countries have not yet been able to achieve the path of reform and development. This has put the people of these countries under unbearable pressure from poverty, ignorance and disease. They have pushed themselves into the abyss and tried to cross the border to reach Europe. They have faced danger and horror, believing a chance at a better future is worth dying for, if necessary.

With the emergence of the new system of globalization, the world became a small village and Africans opened their eyes to the luxury and good life enjoyed by Europeans, which inspired them to move to these countries. The majority of people from African countries continue to blame European countries for their backwardness and believe they should shoulder their responsibilities toward Africa. As a result of the failure of European countries to play the role that the African people were waiting for, these masses migrated to Europe to try to gain these rights. Europe, when dealing with refugees, looks at them from a perspective of human logic or empathy and does not view migration as a symptom of a disease. European countries must change their thinking and strategy to deal with the disease in order to make the causes of migration disappear.

It is time for Europe to look at the Chinese experience in Africa. The Chinese policy has  always focused on development. Economic relations between Africa and China have grown enormously, especially since 2006. The African continent is playing an important role in the Belt and Road initiative. China provides infrastructure funding and a workforce, and this infrastructure allows Africa to increase its production and exports, improving the quality of life and improving the conditions of millions of Africans.

Hope is the solution. The people of the African continent need hope. At least this last summit has come out with some words about more investment in Africa to help the continent achieve a substantial socio-economic transformation. China has been focusing on African development for a long time and has seen the results. The EU should work closely with China to push for the B&R to fight poverty in Africa and promote development. (emphasis added)

He Wenping is a senior research fellow at the Charhar Institute in China, and Hisham Abu Bakr Metwally is the first economist researcher at the Central Department for Export & Import Policy under the Egyptian Ministry of Foreign Trade and Industry. bizopinion@globaltimes.com.cn

 

Transaqua: Pan-African Project “Necessary to Restore Peace and Security in the Lake Chad”

“China’s deal with Italian firms will rescue Lake Chad”

What is Transaqua?

Last June, in Hangzhou in Zhejiang Province, Chinese construction giant PowerChina and the Italian firm, Bonifica SpA signed a deal about a regeneration project of Lake Chad.

The agreement includes carrying out feasibility studies on transferring water from River Congo in the Democratic Republic of Congo to replenish Lake Chad.

Due to less rainfall and increased irrigation, the Lake’s area has shrunk from 20,000 square kilometres to just 2,000 square kilometres. Other factors, include an influx of refugees fleeing the atrocities of the Boko Haram, have contributed to increased demand.

The proposed major water diversion scheme would involve channeling a small percentage of water from River Congo towards the north via a navigable canal.

Mohammed Bila of the Lake Chad Basin Commission explained that the Pan-African project is “necessary to restore peace and security in the Lake Chad region and for the promotion of navigation, industrial and economic development in the whole Congo basin.”

Map showing Lake Chad and River Congo.

Courtesy of Schiller Institute. The Transaqua project aims to move water from River Congo to Lake Chad. Schiller Institute. Schiller Institute Schiller Institute

He also highlighted that the movement of the water could feasibly be used to create hydro-electricity, as well as boosting regional trade, creating new economic infrastructure like river ports, and making new agro-industrial zones.

How is China involved?

PowerChina, a large state-owned enterprise in China that built the Three Gorges Dam, has committed US$1.8 million to finance to research studies for the initial stages of Transaqua.

The canal will effectively create a New Silk Road to Lake Chad and there are plans to have a service road and eventually a rail line run alongside the waterway, creating more infrastructure and access.

This is in keeping with the values of China’s Belt and Road initiative. Wang Hao, from the Chinese Embassy in Germany speaking at the Schiller Institute’s Development of Nations Conference, explained China’s decision to put forward the Belt and Road initiative.

He spoke of how China has learned from its own experience how important transport facilities are for the development of the economy. He quoted the Chinese saying: “To get rich, you must build a road first.” This is at the core of the Belt and Road initiative – infrastructure supports economy recovery and strength.

He highlighted that China accounts for two-thirds of the world’s total high-speed railway, with 25,000 kilometres. This infrastructure laid “a solid foundation for the rapid development of China’s economy”.

Facilities connectivity is one of the priorities of the Belt and Road initiative as China believes proper infrastructure is at the basis of economic development. This in part illuminates the reason behind China’s investment into Transaqua.

Mohammed Bila of the Lake Chad Basin Commission said Africa can become the next China if it invests in the Transaqua infrastructure with the support and partnership of China and Europe.

With investment so far of US$1.8 million from China and US$2.5 million from Italy, this project could “launch Africa on the road to economic growth, human security, industrialisation, peace, development and the attainment of the dreams of Pan-African leaders” such as Dr Kwame Nkrumah, former president of Ghana, who first proposed the project in 1964.

Kenya Advocating Nuclear Technology and Science For Africa

Kenya Needs a National Atomic Energy Commission, Says Education Cabinet Secretary

June 27, 2018–“It is highly regrettable that we have not effectively harnessed nuclear technology for the benefit of our people,” said Education Cabinet Secretary, Ambassador Amina Mohamed, opening the meeting of Vice Chancellors and Representatives of regional institutions involved on human resources development in nuclear science in Africa yesterday. She has called for the creation of a central government nuclear Commission, to put under one umbrella, all of the country’s nuclear activities. “We in Kenya,” she said, “realize that we must establish a National Atomic Energy Commission for our country to coordinate all the work we are doing in different  institutions and offices.”

“The application of nuclear science and technology avails enormous benefits,” she said, “including mitigating climate change, enhancing generation of energy, improving human and animal health, and increasing food production.”

Secretary Mohamed is a passionate supporter of science and technology for Kenya and for Africa. On June 16 she praised China’s role in supporting science in Africa, through a new joint center in Kenya. Her commitment is reminiscent to that of Naledi Pandor, Science and Technology Minister of South Africa, also an African woman who is an outspoken promoter of science and education for Africa.

China’s Global Times Highlights Flaws of US and Europe Policy Towards Africa

By Mark Kapchanga
June 26, 2018

Illustration: Liu Rui/GT

On June 18 in Michigan, US Secretary of State Mike Pompeo addressed a meeting under the umbrella of the Detroit Economic Club. In a question that seemed to have made him a tad uncomfortable, the secretary of state was informed that Africa appeared to be evolving and transforming rapidly, and further, China was asserting itself in the continent.

He rightly confirmed that Africa is facing two issues. One is extremist groups threatening to tear apart the continent’s fabric of unity. But the second issue is the opportunities that lie in Africa. It is here that Pompeo seems to have stained his otherwise well researched address to the people of Michigan. With obvious jealousy that is always expected from Western countries against China’s foray into Africa, Pompeo downgraded Africa’s growth potential that is underpinned by significant Chinese investments and trade by saying that Africa will see actual growth with a Westernized model of development.

He meant that the foundation for growth in Africa is the rule of law and property rights. In his usual way of disparaging China, Pompeo further claimed that Chinese trade and investments are about exercising political influence in Africa.

African countries and their leaders have grown sick and tired of such stereotyped thoughts coming from Western nations. History has proved that America and European countries are behind Africa’s underdevelopment. They not only colonized Africa but also stripped it of resources and displaced people from their lands.

This is described by Walter Rodney in his book How Europe Underdeveloped Africa where he argues that the short period of colonialism and its negative consequences for Africa spring mainly from the fact that the continent lost power. Rodney notes that power is the ultimate determinant in human society, and implies that one should have the ability to defend one’s interests and if necessary impose one’s will by any means available.

There is no doubt that when the question of power emanates, it determines one’s bargaining power, the degree to which a people survive as a physical and cultural entity. But as Rodney vividly says, “when one society finds itself forced to relinquish power entirely to another society, that in itself is a form of underdevelopment.”

Instead of Western powers always complaining about China’s presence in Africa, they should transform and improve their strategies for the continent. The old template they applied to Africa is already stale. Africa cannot be developed through conditionalities that only massage the whims of America and Europe.

Through the International Monetary Fund and the World Bank, Europe and America bullied African countries for more than three decades. Those nations seeking access to the General Account of the Fund had to commit themselves to explicit conditions regarding the conduct of their international policies.

Ultimately, African countries in need of financial support to boost their infrastructure, education and health failed to do so as the conditions were too tough. Globally, economists termed the conditions inefficient and mistargeted.

With the urge for greater development, China filled in the void. Its support to Africa has been less bureaucratic and almost without conditions.

As Pompeo and his fellow Western leaders continue complaining about China and its relations with Africa, youths in the continent are grinning having secured jobs in various projects being pursued by China. In Kenya, for instance, thousands of youths continue to earn an income from the construction of the standard gauge railway whose construction is now being extended from Nairobi to Naivasha.

The enormous investments China is pursuing in Addis Ababa have totally transformed the face of Ethiopia, a country once ranked among the poorest in the world. Today, Ethiopia is the only country in Africa that can manufacture its own leather shoes, thanks to support from China. This is the kind of friendship Africa has been yearning for.

Africa’s development can only be shaped by Africans. Europe and the US can therefore involve African leaders in designing the kind of investments and relations that fit them. If they continue condemning China on its relations with Africa, the continent’s ties with Beijing will only get stronger and thrive all the more.

The author is an economist specializing in China-Africa relations. Twitter: @kapchanga opinion@globaltimes.com.cn

 

 

Why the “Fire and Fury” on China Trade

By William Jones

The world is on tenterhooks waiting for the next moves from the Trump Administration in terms of the draconian tariffs he has threatened to place on China as well as on a number of other countries, including our close neighbors Canada and Mexico. And the question remains for most people: Is he really intent on carrying out the threat (the first tariffs are to take effect on July 6) or is this merely an “in-your-face” negotiating tactic to cut a better deal for the United States? We probably won’t know until the last moment, but a number of things seem to be clear.

Why the “Fire and Fury” on China Trade?

 

Call for EU Summit with Chinese and African Governments to Undertake Crash Pan-African Infrastructure Program

Helga Zepp-LaRouche: ‘History Is Now Written in Asia: Europe Must Follow the Singapore Example’

June 15, 2018—Schiller Institute Founder and Chair Helga Zepp-LaRouche has put forward a bold new agenda for the June 28-29 European Union summit, necessary to further transform the world, in the wake of the Singapore summit of U.S. President Trump and North Korea’s Chairman Kim Jong-un. Her proposal concludes:

“If the Merkel government is still in place when this article appears, there is a very good way by which the present crises can be overcome—from the migrant crisis to the government crisis and the EU crisis. Taking the example set by the Singapore Summit—that real change is possible, and that the past does not determine the future—the German government should ensure that the agenda of the European Union summit on June 28-29 be quickly changed. EU cooperation with China’s New Silk Road initiative for the development of Africa should be made the sole subject on the agenda, and [President] Xi Jinping or [Foreign Minister] Wang Yi should be invited to attend, as well as some African heads of state who are already cooperating with China.

“If the EU summit, the Chinese government representative, and the African representatives then pronounce in a joint declaration the commitment to undertake a joint crash program for a pan-African infrastructure and development program, and promise all the young people of Africa that the continent will overcome poverty in a short time, such a declaration, due to the participation of China, would have all the credibility in the world in Africa, and would change the dynamic in all the countries towards definite hope for the future, and thus would immediately effect a change in the migrant crisis. It would also free the EU from its current crisis of legitimacy, and give the European nations a mission which would place the unity of Europe on a great new level.

“Will the heads of state and government of Europe manage to follow the example of Trump and Kim Jong-un? The prospective of developing Africa together with China, would also give President Trump the urgently needed opportunity to overcome the otherwise looming spiral of trade war, and to balance the [U.S.] trade deficit by increasing trade, primarily through investment in joint ventures in third countries.

“The crisis in Europe, the migrant crisis, the crisis of the German government—they have all assumed such dimensions, that the opportunity for a change of course in policy can absolutely be seized. Needed now, are the people to make it happen.”

Interview With Lawrence Freeman: The Time is Now For TRANSAQUA-to Save Lake Chad and Transform Africa

Transaqua is an inter-basin water project to transfer a sufficient flow of water from the tributaries of the Congo River to restore Lake Chad from its current diminutive size of 1500-2500 square kilometers to its 1963 level of 25,000 square kilometers. The Transaqua design is to create a navigable 2,400-kilometer canal that by gravity will deliver between 50 to 100 billion cubic meters of water to the Chari River in the Central African Republic, which is the primary tributary to Lake Chad. The channel will be created through a series of dams of the tributaries to the right of the Congo River.

Transaqua, the brainchild of Dr. Marcello Vichi of the Italian Bonifica engineering firm, was first proposed almost 40 years ago. Its unique feature lies beyond refurbishing Lake Chad, in restoring economic growth to the poor people living in the Lake Chad Basin This mega-project will create a super economic zone of trade and commerce between all the nations of the Congo river and Lake Chad Basins; potentially affecting one third of the entire African continent. In addition to the generation of desperately needed hydro-electric power, new roads will be built, new manufacturing-agricultural centers will be created, new fisheries will develop, and food production will expand with an additional 40,000 hectares of irrigated land.” Source: Lawrence Freeman

Africanagenda: Hello Mr Freeman, thank you for joining us today to discuss the Transaqua Project.

You are very well informed on this subject and since 2014 have been the Vice Chairman of the Lake Chad Scientific Committee. Earlier this year you spoke in Abuja, Nigeria at the International Conference on Saving Lake Chad. Could you tell us about the sense of optimism that this project is bringing to Africans? I believe this was a dream of Ghana`s President Kwame Nkrumah, that the Sahara Desert could bloom.

 

Heads of State of the Lake Chad Basin nations sign Abuja accord

L. Freeman :The endorsement of the Transaqua inter-basin water transfer project at the International Conference to Save Lake Chad held in Abuja from February 26-28 was a milestone for the entire African continent. Nigerian President, Muhammadu Buhari deserves credit for initiating this conference and his support over many years to recharge Lake Chad. This project would be the largest infrastructure project in Africa connecting a dozen African nations in a super economic zone of development. The Transaqua proposal has been known for several decades, but it was only at the Abuja conference that the Heads of States of the nations of the Lake Chad Basin Commission- (LCBC) officially decided to explore the feasibility of the inter-basin water transfer project. As a result of the conference, approximately $3.6 million will be allocated for the first ever feasibility study of Transaqua to be conducted jointly by PowerChina and Bonifica.

As the news of the success of this conference held in Africa spreads, it will create a wave of optimism across the continent. One reason is that African leaders are thinking big with a vision for the future, having taken it upon themselves to discuss and support such a transformative infrastructure project.

The Sahara Desert, the largest in the world-the size of the continental United States- can bloom if it has water. The loss of lake Chad, the largest body of water in the desert would be a catastrophe not just for those living in the Lake Chad Basin, but for the entire continent, and implicitly the world. Therefore, I am optimistic that the Abuja conference will be a turning point for Africa.

Africanagenda: Transaqua is unique.It is it the largest engineering project ever proposed and as the largest infrastructure project in the world it has the potential to radically transform the economy of the continent`s interior, not just in terms of agriculture but through industry. Could you explain to our readers how transformative Transaqua will be?

L.Freeman: The land area of all the nations that would be affected by Transaqua equals approximately one third of the African continent. The inter-basin water transfer project would create a navigable canal that would facilitate a new level of trade and commerce between the nations of the two basins: Congo River; and Lake Chad. Resulting in an increase in farming, manufacturing, fishing, electrical power, roads, and other related infrastructure.

Thanks in part to China’s New Silk road, African nations are presently engaged in the most intense level of development of infrastructure, most especially in new railways that potentially could cross the continent from Djibouti to Dakar. Plus progress is being made on several East-West highways that would also connect to South-North routes crossing the Sahara Desert.

image: The Schiller Institute

The combined effect of the completion of these infrastructure projects would create an economic renaissance for Africa that portends the elimination of poverty and hunger for hundreds of millions of Africans.

If you look at a map of Africa, you will see that Transaqua will travel northwest from the southeast corner of the Democratic Republic of the Congo through the Central African Republic, thus intersecting the East to West network of new railways and highways. The combined effect of the completion of these infrastructure projects would create an economic renaissance for Africa that portends the elimination of poverty and hunger for hundreds of millions of Africans.

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Good News for Africa! DR Congo Will Get Power From Inga 3

Congo to Start $13.9 Billion Hydropower Project This Year

The Inga 1 dam and Inga Falls on the Congo river.  Photographer: Marc Jourdier/AFP via Getty Images

The Democratic Republic of Congo plans to start work this year on the frequently delayed Inga 3 hydropower project, after receiving a joint bid from two previously competing consortia of investors.

One group led by China Three Gorges Corp. and another including Actividades de Construccion y Servicios SA of Spain submitted a joint bid on June 6 for the project that will produce 11,000 megawatts and is predicted to cost $13.9 billion, Bruno Kapandji, director of the Agency for the Development and Promotion of the Grand Inga Project, said at a conference Wednesday in Lubumbashi in southeast Congo.

“Our aim is to start Inga this year,” Kapandji said. “The two consortia have given us a document in which they committed to creating a single consortium. We are in the process of preparing, discussing and negotiating the exclusive collaboration contract which will allow the single candidate to go to the market to find the financing.”

Africa’s biggest copper producer and the world’s largest source of cobalt has been considering building Inga 3 for more than a decade to address a power shortage that has curbed mining-industry growth. A treaty signed in 2013 provided for the plant to export 2,500 megawatts of power to South Africa. The plant would form part of a larger Grand Inga hydropower complex spanning part of the Congo River and produce as much as 50,000 megawatts when complete, according to the World Bank.

Seven Years

Construction on Inga 3 will take as long as seven years, Kapandji said.

Congo’s government last year asked the competing consortia to work together and submit a joint offer to build and manage Inga 3. Once a concessionaire company has been established, the developers “will commit themselves to mobilizing the funds to complete the project and operate it,” Kapandji said.

The next phase of Grand Inga was initially supposed to produce 4,800 megawatts.

“The project has changed because the demand has changed,” said Kapandji. The mining industry’s energy deficit has increased from about 500 megawatts to 1,300 megawatts in the intervening years since the project was conceived, he said.

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