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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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

 

 

Chinese Engagement, Investment and Trade With Africa

China’s New Silk Road–Belt and Road Imitative is providing indispensable investment and construction of infrastructure in Africa. Infrastructure development in energy, railways, roads, airports, and water management are critical for African nations to develop their agricultural and manufacturing sectors. Below are excerpts from the report: “The Belt and Road” in Africa 

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“China’s close engagement with Africa continued through the succeeding decade and accelerated toward the end of the 1990s and into the 2000s. By 2008, China’s Export-Import Bank was funding more than 300 projects in 36 countries across Africa. The value of bilateral trade increased from US$6.5 billion in 1999 to US$73.3 billion in 2007 (Figure 1). According to the China-Africa Research Institute at Johns Hopkins University, by 2008 it exceeded US$100 billion, and it peaked at more than US$200 million in 2014, before slipping back in 2015 and 2016 in response to poorer global economic conditions. In 2009, China overtook the United States as Africa’s major trading partner. The largest African exporter to China from Africa in 2015 was South Africa, followed by Angola and Sudan. In the same year, South Africa was the largest African market for Chinese goods, followed by Nigeria and then Egypt.”

“In 2015, China investments into African infrastructure projects were three times the sum of those of France, Japan, Germany and India combined (Figure 7). The bulk of Chinese funding has been in the form of government-to-government loans, used then by the borrowing African governments either to develop the project itself, or to leverage it with private capital through a public-private partnership (PPP). As of the date of writing (late 2017), at least 76 PPP projects appear to be in the pipeline in African countries associated with BRI. Not all have values ascribed, but the 14 that do imply a cumulative investment of nearly US$6 billion for them alone. Sixty percent of these projects are in the transport sector.”

 

Nigeria Wisely Collaborating with China in Railway Development

This report by the United States Institute of Peace provides a useful overview of current and future rail projects for Nigeria. Hard infrastructure in rail, energy, and water management provide an essential platform for real economic growth. China understands this principle as demonstrated in the expansion of the New Silk Road across the globe. It is a credit to President Buhari that has taken leadership in collaborating with China to build a modern rail system in Nigeria that will connect the entire nation.

“China’s Role in Nigerian Railway Development and Implications for Security and Development”

April 18, 2018

“The Economic Benefits of Railway Investment”
    “Railway development has been featured in China’s wider Belt and Road Initiative across Eurasia and East Africa. In Eurasia, as in Africa, Beijing emphasizes the contribution of the BRI to peace by promoting the development and prosperity that come from economic connectivity. Railways are an integral part of this formula. The intrinsic advantages of railways over road networks lie in their economies of scale: railways need less  frequent maintenance and have higher speed and efficiency over long-distance routes, making them a highly advantageous low-cost option for freight traffic and offering huge potential for trade promotion.
     “Railway development also has positive spillover effects for complementary industries in upstream manufacturing supply chains, such as steel and construction materials, and generates demand for retail and services, all of which promote employment. A central trunk corridor would open up agricultural and mining industries in the middle-belt and plateau states. Likewise, the development of the western Lagos-Kano corridor would benefit northern  cattle and leather industries, which are currently disadvantaged against cheap imports given the costs of transport.”  (excerpted from USIP report)                              ‘

Read entire report

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Great News! Nigeria Expanding Vitally Needed Rail and Road Infrastructure

Nigeria Getting Back On Track With Rail Revolution

May 18, 2018-ThisDayLive
Israel Ibeleme

Just days before President Buhari met with President Trump at the White House, history was made in Washington, DC, with the signing of a landmark infrastructure agreement between the Nigerian Government and a consortium of multinational firms led by the American digital industrial giant, General Electric (GE). The implementation of that agreement, worth US$45 million in the first phase, will ensure that within the next 12 months, passenger travel by rail from Lagos to Kano will be faster and safer, while for the first time in over a decade, contracted
and scheduled freight rail services can once again be offered.

This milestone project is the outcome of President Buhari’s single-minded determination to develop, upgrade and modernise Nigeria’s transport infrastructure, as well as the relentless push by the Minister of Transportation, Rotimi Amaechi, to fully deliver on the President’s vision.

Since Mr. Amaechi took office in November 2015, as Minister of Transportation, there has been a renaissance in Nigeria’s rail industry, in line with the President’s oft-stated vision. This planned revamp of the Narrow-Gauge Rail Network by the international consortium comprising General Electric, Transnet of South Africa, Sino Hydro of China and APM Terminals (part of the Danish Maersk Group) – after two years of meticulous planning, negotiating and contracting, President Buhari in one of the coaches when he commissioned the Abuja-Kaduna train services offers strong proof of the seriousness with which the Buhari Administration is taking its railway
modernisation ambitions.

Nigeria’s Narrow-Gauge Rail System was conceived in the 1890s and built between 1898 and 1926, with a total length of 3,500 kilometres. It consists of two primary lines – Lagos to Nguru and Port Harcourt to Maiduguri– with spur lines to Eleme, Baro, Kaura Namoda and other places.

The Buhari administration, as part of its infrastructure development vision, has now finally taken the long overdue bold steps to modernise the rail network. On August 18, 2017, the Federal Executive Council, following a competitive procurement process, approved the concession of the Narrow-Gauge Rail System to the GE-led Consortium. The Government is advised by a multidisciplinary consortium led by the Africa Finance Corporation.

The initiation of that concession agreement is what has now finally taken effect following the signing in Washington DC yesterday, ahead of President Buhari’s bilateral meeting with U.S. President Donald Trump on Monday…

The benefits of this intervention are immense: increased economic productivity, job creation, private sector investment, human capacity development and much-needed world class expertise. Worldwide, rail infrastructure has been proven to reduce costs and wastage of goods; increase economic trade between farmers/miners and industry and between traders and consumers; and grow business competitiveness and increase operational efficiency.

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Nigeria Signs Rail Project with China

May 16, 2018–Nigeria has awarded a $6.68 billion contract to the China Civil Engineering Construction Corp. (CCECC) for work on a major segment of a railway linking the country’s commercial hub Lagos, in the southwest, and Kano in the north, Xinhua reported May 15.

“The signing of the segment contract agreement today [May 15] concludes all outstanding segments of he Lagos-Kano rail line,” Xinhua quoted Nigeria’s Transport Ministry as saying. The work is expected to take two or three years. CCECC, a subsidiary of China Railway Construction Corp., has been involved in other parts of the Lagos-Kano rail project, which started in 2006 and was broken into segments for implementation.

In 2016, Nigeria awarded work on a segment between the northern states of Kano and Kaduna with a contract sum of $1.685 billion. The railway line already receives funding from China Exim Bank which in April approved a $1.231 billion loan for network modernization programs. Nigeria is also negotiating with Russia, on projects within the ambitious national rail development program which requires investments totaling $46 billion.

China Civil Engineering Construction Corporation lands $6.68bn Nigeria rail project

May 16, 2018-Global Construction

By Tom Wadlow

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Construction of new highway read: Lagos Ota-Abeokuta Expressway

 

 

China Helps Ethiopia Build ‘Industrial Belt’

Ethiopian attendants walk along a train at the Lebu station in Addis Ababa, capital of Ethiopia, Jan. 1, 2018. (Xinhua/Michael Tewelde)

“Ethiopia takes inspiration from China’s success for own development”

Ethiopian attendants walk along a train at the Lebu station in Addis Ababa, capital of Ethiopia, Jan. 1, 2018. (Xinhua/Michael Tewelde)

ADDIS ABABA, May 10, 2018 (Xinhua) — Ahmed Shide, Minister of Ethiopia Government Communications Affairs Office (GCAO), told Xinhua that China hasn’t only become Ethiopia’s top economic partner but a model for Ethiopia’s economic ambitions.

Learning from Chinese economic growth experience, Ethiopia will have about 15 industrial parks by June, most of them built with Chinese money and expertise.

Ethiopia has also heavily invested with Chinese assistance in road, rail and air infrastructures to alleviate transportation problems for Ethiopia’s exports.

Shide said landlocked Ethiopia has seen China’s success in having an efficient and effective infrastructure to facilitate exports from industrial parks and as such is building a “development belt” to copy the Chinese success story.

The “development belt” will see Ethiopia build industrial parks located along the path of existing or under-construction rail lines to speedily transport products made in industrial parks to ports in neighboring Djibouti.

After reaching Djibouti, the products are then loaded and shipped to their final export destinations including China.

About half of the 15 industrial parks Ethiopia is constructing or has constructed are located along the 756kms Ethio-Djibouti electrified rail line built with Chinese expertise and finances at a cost of 4 billion U.S. dollars.

The rail line which recently started commercial operations has cut transportation time for Ethiopian goods to Djibouti ports from two days to 10 hours, giving a leg up for Ethiopia’s economic dreams of becoming a light manufacturing hub in Africa and middle-income economy by 2025.

Shide said Ethiopia is also looking to further boost ties with China on air infrastructure, as the Asian economic powerhouse is the single largest market for its national carrier Ethiopian Airlines (ET).

ET currently flies to five destinations in China — Beijing, Shanghai, Chengdu, Hong Kong and Guangzhou, and plans to add Shenzhen as its sixth destination in June.

With China working on being an airplane manufacturing center, Shide adds he foresees ET will soon be a customer of fully developed Chinese airplanes.

LEARN MORE FROM CHINA

With Ethiopia utilizing Chinese hard infrastructure expertise and money to support its ambitious economic plans, Gedion Jalata, CEO at Center of Excellence International Consult, an Ethiopian consulting firm, told Xinhua Ethiopia should also be learning from Chinese success in creating a meritocratic bureaucracy.

“China succeeded in bringing out of poverty 700 million people in 30 years not just because it built physical infrastructure, but it worked on its human capital helping create an efficient state bureaucracy, that’s a soft infrastructure Ethiopia should build,” Jalata said.

He said there are simple things the new Ethiopian administration of Prime Minister Abiy Ahmed can do if Ethiopia is to effectively learn from China’s remarkable economic development.

“Ethiopian leadership, just like Chinese leadership, should have the political will, determination and commitment to meet the country’s economic ambitions,” Jalata added

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“China committed to strengthen relations with Ethiopia”

Chairman of the National People’s Congress of China (NPC) and speaker of the congress, Li Zhanshu, confirmed that his country is determined to strengthen its diplomatic relations and continue its multi-faceted development support for Ethiopia.

On an official state visit in Ethiopia since Wednesday, the chairman met and conferred with different officials of the Ethiopian government including the president, the prime minister and speakers of both the House of People’s Representatives (HPR) and House of Federation (HoF) over bilateral and mutual interest.

Apart from this, the chairman has also signed an agreement of loan and humanitarian assistance.

In this regard, the chairman met with President Mulatu Teshome (PhD) on Thursday to discuss bilateral and regional issues. According to Meles Alem, spokesperson of the Ministry of Foreign Affairs (MoFA), the chairman confirmed that China gives priority to the bilateral ties with Ethiopia and needs Ethiopia to continue its pivotal role in Sino-Africa partnership.

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Africa Advancing With Kenya’s New Mega Infrastructure RR

Kenya`s New Mega Infrastructure, the Mombasa-Nairobi Railway

 

Below is my current course at Frederick Community College and the Community College of Baltimore County. I also teach a course, “Africa the Sleeping Giant” and will be teaching another course in the Fall, “The Legacy of 500 years of Slavery and Colonialism in Africa.”

“Eight Nations Vital to sub-Sahara Africa: Past & Present

“Learn about the important histories of eight African nations that helped shape the sub-Sahara continent including; Ghana, Nigeria, Sudan, Ethiopia, Kenya, Democratic Republic of the Congo, Zimbabwe and South Africa, from slavery to the present. Students will learn how their unique history is reflected in today’s political-economic life of these nations.”

 

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

 

East-West Railroad Would Transform African Continent

This is an interesting and useful article. I have stressed for decades the urgent need to construct both an East-West and a South-North Railroad. A high-speed transport grid that Africa should have completed decades ago, is essential for the well-being and economic growth of Africa. Such a transportation network, integrated with several hundreds megawatts of electrical power, would create an infrastructure platform that would be transformative; producing the conditions for African nations to finally eliminate hunger and disease. These projects are possible now with the expansion China’s New Silk Road, initiated by President Xi Jinping, which has changed the strategic geometry of the world. For example. At the February Abuja conference to ‘Save Lake Chad’ at which I participated, the Head of States endorsed the mega Transaqua project; an inter-basin water transfer proposal to recharge Lake Chad. The Transaqua concept had been in circulation for over thirty years, but with no progress until ChinaPower become involved.  As I advised the participants at this conference: now is the time for Africans to think big!   

Can China Realize Africa’s Dream of an East-West Transport Link?

The Jamestown Foundation-Publication: China Brief Volume: 18 Issue: 6

Map of a proposed trans-Africa highway network, ca. 2003 (Credit: Wikipedia Commons)

African development hinges on a maddening paradox: its greatest asset—the sheer size and diversity of its landscape—is also the greatest barrier to its development. Landlocked countries are cut off from ports, and the difficulty of moving goods from country to country weighs down intra-continental trade (only 15% of African trade is within Africa. (African Development Bank, 2017) African consumers bear the brunt of these difficulties. [1]. Costs are driven up by a host of factors: tariffs, border delays, corruption. But the biggest challenge is that no streamlined transport route exists between West and East Africa – only a decaying and underdeveloped road and rail system which pushes up costs and drags down efficiency.

Several ambitious schemes have been proposed to link Africa’s east and west coasts, some of which are closer to full realization than others. Most notable in this respect is a plan to expand the existing Trans-African Highway 5 (TAH5) into a true cross-continental road and rail link, the early stages of which China has helped bring to fruition where Western consortiums failed. Likewise, Chinese investment in African infrastructure through Beijing’s ambitious Belt and Road Initiative (BRI) may help create expanded sub-regional linkages, particularly in East Africa, that could help facilitate the emergence of an eventual, true East-West link in the long term. However, in the short-to-mid-term, the obstacles to a truly robust set of East-West transport links are formidable, and it is unlikely that China’s involvement will be a panacea.

Read entire article: Can China Realize Africa’s Dream of an East-West Transport Link?

Why the West Needs to Stop Complaining and Start Engaging China in Africa

This article makes the essential point that I have made for many years. If the US would collaborate with China and join the One Belt-One Road, great advances would be accomplished in the economic development of Africa.  (see emphasis at end of article)

China is here to stay, and Western and African countries alike should make the most of it.

Pippa Morgn, The Diplomat

March 20, 2018

Ethiopia is one of the world’s poorest states, with an annual per capita GDP of just $707. Yet Addis Ababa is awash with billboards for Chinese construction firms, and China’s presence is palpable all over the country. Is “neo-colonial” China “out for oil” yet again?

In Ethiopia, that explanation just doesn’t add up: the country has virtually no oil, gas, or other precious minerals.

Fortunately, while the media and politicians seem stuck on uninformed accusations of neo-colonialism, some Western investors are starting to make the most of China’s growing presence. In Ethiopia’s Hawassa Industrial Park, the crown jewel of its industrial policy, the largest jobs provider is PVH – the U.S. owner of major global brands such as Calvin Klein, Tommy Hilfiger, and Speedo. Eco-friendly Hawassa was built by a Chinese company, the state-owned China Civil Engineering Corporation (CCECC), in just nine months. And, of course, PVH and other global investors could not run their businesses –and create thousands of coveted manufacturing jobs – without the railways, roads, and power stations that China is constructing all over Ethiopia.

There are also encouraging signs at the local level that, instead of pointing fingers at each other, China and the West can work together to deliver development aid. While the majority of Chinese funds go to hard infrastructure, traditional Western donors prefer social “soft” sectors. This makes them complements, not rivals. Ethiopia is eager for roads and railways, but it also   needs a better-trained, healthier workforce. Take Ethiopia’s new railway academy, designed to educate a fresh, local generation of engineers and workers: China is funding and building the school’s physical infrastructure, while the World Bank and European institutions are helping with curriculum development and business planning.

Turning “Made in China” to “Made in “Ethiopia”

History shows that (without massive oil reserves) industrialization – working up from cheap, lightly manufactured products to technically sophisticated products – is the only way to develop quickly. Factories offer an escape from unproductive and grueling subsistence farming into modern jobs with regular wages. Japan, South Korea, and later China all owe their economic success to this model, and Ethiopia’s government hopes to turn “made in China” to “made in Ethiopia.”

But industrialization needs more than cheap labor (which Ethiopia has in abundance) and the good governance that Western donors strive to instill. Investors desperately need roads, electricity, water, and the internet. With traditional Western partners either unwilling or unable to fund these at scale, and low tax revenues due to the country’s poverty, how else can the Ethiopian government build the basic infrastructure that we take for granted in the developed world? Without Chinese help, Western money for training and other “soft” sectors is sinking money into a black hole, and Ethiopia risks being “too poor to develop” –condemned to survive on subsistence agriculture and international handouts.

Ethiopian officials stress that they take the lead in dealing with China. They lament that Western aid (although well intentioned) is frankly “not enough.” Ethiopia, which has ambitious plans to escape poverty and become a middle-income country by 2025, does not have time to waste.

What’s in it for Beijing?

But is China a trustworthy partner? Beijing claims its aims are “win-win” rather than “neocolonial,” but what is China’s “win”? Like the United States after World War II, China seems to realize that providing global public goods is in its own interests. In Ethiopia, an important African hub for the Belt and Road Initiative (BRI), China secures important diplomatic gains and lucrative business opportunities…

Chinese business interests are also at play. Official loans are tied to the use of Chinese contractors, creating lucrative revenue streams. Fresh from “building China” over the past 40 years, Chinese state-owned enterprises (SOEs) are experts in cheap, fast infrastructure. They’re also eager for new opportunities as domestic growth slows. For example, the multi-billion dollar Addis-Djibouti railway was built by the state-owned China Railway Group and China Civil Engineering Construction Corporation, who later won a multiyear contract to operate the new line.

Why Engagement Not Estrangement is the Key

So is this really “win-win” for everyone? On the one hand, the commercial rates of many Chinese loans make debt sustainability a huge concern. To pay back what it owes, and eventually stand on its own feet, Ethiopia is in serious need of more tax revenue. So, if it fails to grow as quickly as hoped, Western warnings of a mountain of unsustainable debt may prove right. Ethiopia could end up like 1980s Latin America, where countries spiraled into crisis when they could no longer pay their foreign debts.

But, while there’s some dispute over the numbers (IMF estimates are slightly lower than the official figures), Ethiopia’s economy is widely agreed to have been growing at around 10 percent for the past decade – a phenomenal achievement. Given the extraordinarily low starting base, it’s unlikely to slow down soon. Businesses in Ethiopia’s industrial zones cite the continually improving infrastructure as one of the country’s main draws, and both Chinese and international firms plan to expand in future. For Ethiopia’s booming young population, this means yet more coveted industrial jobs…

How much more might be achieved if Beijing and the West proactively worked together across the whole African continent?  Much of the media and political discourse seems unable to accept that China’s role is equaling – or even surpassing – that of the West.,,

Read entire article in The Diplomat