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

September 8, 2018

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

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

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

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

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

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

Nigerian President Buhari Debunks the “Debt Trap” Hoax

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

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

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

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

“Debt Trap” Hoax Exposed by Chinese Spokesperson

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

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

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

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

China Africa Research Initiative Refutes “Death Trap” Propaganda

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

Read complete CARI  briefing paper

 

Read:

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

 

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.

read article

 

Save Lake Chad With Transaqua: Franklin Roosevelt and Kwame Nkrumah Would Concur

In 1943, after having flown over the Sahara Desert on his way to a Casablanca conference with Winston Churchill, President Franklin Roosevelt remarked to his son Elliott, that with the recreation of a lake in the depressed flats in North Africa, “The Sahara would bloom for hundreds of miles.” He also reminded his son of the rivers which arise in Atlas Mountains and disappear under the Desert. “Divert this water flow for irrigation purposes?  It’d make the Imperial Valley in California look like a cabbage patch!”

Later in the trip, FDR made Winston Churchill apoplectic by discussing plans for anti-imperialist development with the Sultan of Morocco, including mooting American aid in providing the resources to train indigenous scientists and engineers to develop the nation.

FDR’s American System vision for African development was not taken up in the post-war era, but his outlook was echoed by at least two prominent statesmen of the next generation from very different backgrounds—Kwame Nkrumah and President John F. Kennedy. It was no mere coincidence that twenty years later, when Ghanaian President Nkrumah addressed the Organization of African Unity, he would also speak about the “possibility for the Sahara to bloom.” Nkrumah’s vision also would be temporarily crushed.

But today, finally, FDR’s and Nkrumah’s dream is beginning to be realized. A giant step toward greening the desert, and defeating the miserable living conditions which go with it, was taken this February, when a meeting of several African heads of state decided to go ahead with a massive project of water engineering called Transaqua. Although proceeding without American government backing, this project is truly in the spirit of American System development, a long-term investment in transforming the physical environment for the benefit of the general welfare.

It is with that in mind that we present this report by an American who does understand the American System, and has worked persistently for several decades to bring its benefits to Africa.—Nancy Spannaus

The Abuja Conference

After two months, the deliberations from the “International Conference on Saving Lake Chad” held in Abuja, Nigeria from February 26-28, 2018 are still reverberating, and will continue to do so. This historic conference, the first of its kind to be convened on the African continent, was initiated and sponsored by the Nigerian government in conjunction with the Lake Chad Basin Commission (LCBC), and supported by the United Nations. It has already begun to change the thinking of what is possible for Africa’s future.

From across the globe, hundreds of water experts, hydrologists, scientists, political leaders, advocates for Lake Chad, the African Union, the Africa Development Bank, and the World Bank, joined the heads of state of the Lake Chad Basin nations for three days of deliberation on the best policy to recharge the contracting Lake Chad.

Having served as an advisor to the LCBC and participated in several discussions with the Nigerian government on the necessity for an inter-basin water transfer project to recharge Lake Chad, this author was given a prominent role throughout the entire proceeding, addressing the gathering several times in various capacities. (Written remarks by me were also circulated at the conference and to the press.)

Read entire the article: Save Lake Chad With Transaqua: Presidents Roosevelt and Nkrumah Would Concur

 

Learning About Africa: How History Effects the Present

Here is the announcement for my newest college course on Africa. Also listed is the course outline a class I am currently teaching; “Africa:The Sleeping Giant.”  I will be preparing a third course on “The Effects of British Colonialism on Africa” in the near future.  These courses are 15 hours long, taught over 7-10 weeks in Maryland. 

“Eight Nations Vital to the Development of Sub-Sahara Africa”

By Lawrence Freeman

The African continent encompasses 54 nations and is more than three times the size of the United States. The northern portion of the continent is dominated by the Sahara Desert, equal in area to that of United States. It is the driest, hottest place on earth, relatively barren, and thinly populated. The African nations below this vast desert are designated as “Sub-Saharan Africa” where approximately one billion live, and is expected to double in population by 2050.

All but two of the 48 nations of Sub-Sahara Africa suffered the brutalities of colonialism following centuries of slavery. As a result, Sub-Sahara Africa is the poorest and most underdeveloped region in the world. Unfortunately, following their liberation from colonialism beginning in 1956, these nations did not achieve economic sovereignty. However, now, for the first time since colonial powers occupied Africa, there are signs of progress with the building of new railroads, expanded ports, roads, and new hydro-electric power projects. This has created the potential to transform the continent.

This course will focus on eight Sub-Saharan nations; each unique in their history, development, and their contribution to the growth of Africa. Their combined population of 550 million comprise almost 30% of the land area of Africa.

Join us in examining the following nations from their birth to the present day: Ghana, Nigeria, Sudan, Ethiopia, Kenya, the Democratic Republic of the Congo, Zimbabwe, and South Africa. Over three decades, I have studied the history and developed an in-depth knowledge of Africa as a researcher, analyst, writer, and consultant. Sadly, most Americans know little about Africa, due to a limited number educational courses, and a reliance on the media. I hope to increase your understanding by sharing my accumulated knowledge with you.

 

 

“Africa The Sleeping Giant” Course Outline:

1-Discovering the Africa Continent

2-Africa: Home to Mankind

3-Man Is Not a Monkey

4-The Great Bantu Migration

5-Early Civilizations

6-Europe Discovers Africa

7-Slavery Rips the Soul of the Continent

8-Colonialism, Exploitation, and Genocide

9-Economic Sovereignty and the Nation State

10-Africa’s Future is Development