Cover Photo: Liberian children hold Chinese flags before the arrival of China’s President Hu Jintao in Monrovia February 1, 2007. Thousands of cheering Liberians lined the streets of the capital Monrovia to greet Hu, hoping for desperately needed investment for their war-scarred nation. REUTERS/Christopher Herwig
Volume 9, Number 1: November 2022 | Essay
No other nation has come close to the scale of China’s engagement in Africa over the last 20 years. Becoming their largest trading partner and a crucial source of investment, the Sino-African relationship has been cemented through the building of railways, expansion of airports and hefty sums of money deposited into the accounts of Africa leading families. However, as infrastructure investment slows to just $1.9 Billion in 2020, the lowest number since 2004, the true long-term prosperity of the partnership will begin to show. This essay will argue that Chinese lending into Africa provided developing nations with the most effective option for infrastructure development and economic growth, and that criticisms of its ineffectiveness are mostly unfounded.
Starting in the early 2000s, China’s investment scheme into Africa saw the loan and investment of over $180 Billion into the continent. During this time, the West and its institutions also significantly invested into the continent, but rather through the form of foreign aid. While their support was widespread covering a range of needs and industries, nearly 2/3 of Chinese investments and loans went towards infrastructure development. The narrative that China was the main foreign body trapping these nations into a cycle of unpayable debt is disproven when noting that they only account for 17% of public debt in Sub-Saharan Africa, while the world bank accounts for 19% and commercial bondholders account for 30%. Similarly, they account for more than a quarter of public debt in only seven of 22 countries classified by the IMF as suffering “debt distress”.
The opening of a 27km expressway through Nairobi, Kenya signals a shift in the dynamics of Chinese investment into Africa. Constructed by the China Road and Bridge Corporation and towering above the congested streets of the nation’s capital, the expressway has received a wide array of criticism but an equal amount of acclaim. While contracts for projects like this usually saw the inclusion of harsh repayment terms, and in the case of Angola and the Congo the rights to extract valuable natural resources with little to no taxation. The contract for the expressway utilises the tolls generated from the expressway to repay the loan used to construct it, thus making repayment feasible within 27 years at current usage rates.
Since the growth of Chinese investment into Africa, many nations have also seen an unrelated shift towards a more democratic model of governance and away from the dictatorships that plagued their past. This subsequently meant that leaders had to demonstrate to the voting population what they were bringing to the table each election round, and the easiest way to do this was through infrastructure development funded by China.
The impact of these infrastructure projects on the development of African nations has also been effective at increasing economic and social growth. In a report by Aidata they state that the average Chinese project raised growth by 0.41-1.49 percentage points after two years – a significant boost. It also found that in areas around a project night-time light (a sign of economic activity) increased by 8%. Often the most effective projects are the unglamorous ones, such as a road linking Nairobi to nearby Thika. China is also set on a demand driven approach when deciding what projects to join: doing what African leaders want rather than what is deemed most necessary by their government. This has led to mining rights being swapped for infrastructure projects by Joseph Kabila in the Congo. In Ethiopia China was the main supporter for Meles Zenawi’s push for industrialisation. In Kenya China supported Uhuru Kenyatta’s “Vision 2030”, notably via the construction of a national standard-gauge railway, the largest infrastructure project since independence.
African leaders also say that the Chinese work at a pace that is effective at meeting their needs. The former president of Senegal Abdoulaye Wade claims that “A contract that would take five years to discuss, negotiate and sign with the World Bank takes three months when we have dealt with Chinese authorities.” The average infrastructure project lead by the Belt and Road Initiative, a global Chinese infrastructure development strategy of which 43 African countries are partners, takes 2.8 years, roughly a third of the time needed by the World Bank or the African Development Bank.
While Chinese influence on the continent has not been as villainous as the West made it out to be, it has been far from idyllic. The ruthless self-interest of the Chinese government has shown itself in the abuse of African workers and the destruction of ecosystems. But most of all in their willingness to prop up autocracies and siphon money into the pockets of Africa’s ruling families. In a 2018 opinion survey on Chinese projects in Africa, 29 nations were reported to have an increase in corruption, which did not happen on World Bank schemes. This shift in norms when the Chinese are involved fosters growth in the technocratic core of impoverished nations and will have long term implications regarding wealth and power distribution among other things.
Over the last two decades the influence of China within Africa has been enormous. While many argue that it has left the continent worse off, the reality is far from. Various Chinese initiatives have boosted urban growth and provided nations with market rate loans to build vital infrastructure in significantly shorter timeframes than western counterparts could offer. Although these projects did come at the cost of environmental degradation and fostering the growth of an African technocratic class, the other support channels on offer from Western government and their institutions were meagre in comparison. Looking to the future, the current shift away from infrastructure lending and towards trade and investment within the continent gives African nations a chance to build up the strength of their economies and create more stable socio-economic environment for their citizens.
Very interesting article! Josh! Until now, I didn’t realize that China’s engagement in Africa had both bad and good effects. Your argument gave me a new point of view on China’s investment. Of course, these investments may have negative aspects, but the West’s strong criticism of Chinese investments in its struggle for hegemony will hinder the country’s growth. I felt it necessary to take a critical look at such claims and consider what is behind them.