Introduction

The ongoing COVID-19 pandemic has not only created a global public health crisis but is also threatening to accelerate a global economic slowdown and trigger conflicts between nations over access to resources. Almost every nation has been impacted negatively – either by the outbreak of the virus, or by the sudden disruption of global trade flows, or by rising bilateral tensions. More than 50 percent^[1] of the international community has demanded an investigation into the origin and spread of the virus, putting the spotlight firmly on China.

Several questions have been raised regarding China’s strategic intentions, its claims of a “peaceful” global rise, and the objectives of its flagship global initiatives such as the Belt and Road Initiative (BRI).^[2] ,^[3] Is the BRI a purely economic construct to enhance international cooperation as China claims, or a geopolitical tool to enhance global strategic influence as its strategic competitors suspect? Does the BRI genuinely benefit participating local countries or only serve to enhance China’s economic benefits? Is China pursuing it unilaterally or co-opting other countries into the initiative?

To answer these questions, this brief takes up the BRI in Africa as a case study, since China’s presence has grown rapidly across the continent. China is an emerging global power, with claims of a “peaceful” outlook in a continent with over 50 countries possessing rich natural resources but relatively poor governance track record and low standards of living overall. How this initiative plays out can provide critical insight into the country’s true intentions. Will China be hard-nosed or more accommodating with its strategy in Africa?

China’s Presence in Africa

With its involvement in the infrastructure sector beginning in the 1960s, China has established an active presence across the African continent. Trade between China and Africa has surged drastically from US$1 billion in 1980 to US$128 billion in 2016. Since 2000, it has provided cumulative loans of US$143 billion in Africa, with half of them given over the last four years alone, making it Africa’s largest bilateral creditor.^[4] At the 2018 Forum for China–Africa Cooperation in Beijing, China offered Africa US$60 billion for development financing until 2021.^[5]

Financing from western countries or institutions is usually accompanied by strict conditionalities, an inconvenience for poorer African countries. Comparatively, China’s financing strategy—through a combination of grants, aid, and loans (free or at low interest rates) with a generous schedule of return particularly on infrastructure projects—is an attractive option for African countries. Moreover, while the financial crises in the US and the European Union have limited their investments in Africa, China is committed to investing more in the continent. It has also adopted a practical approach, not a value-based one, while dealing with political regimes across the continent. Unlike Western countries, which prefer dealing with transparent and accountable democracies, China has an “all-inclusive” approach and deals with regimes without any pre-set conditions. Since the country has not taken any political sides, Chinese companies have managed to maintain a low profile and avoid becoming a target of opposing local factions. Additionally, China is engaged in peace and security projects in Africa. It participates in five UN peacekeeping missions in Africa and is the second-largest financial contributor to UN peacekeeping missions, which includes contributing to the African Union Mission in Somalia (AMISOM) and the IGAD South Sudan mediation.^[6] Economically, China has a history of fast and successful economic growth, which presents an attractive template for African countries to replicate. It has invested significantly in big infrastructure, industrial and connectivity projects, which are critical requirements for governments across Africa and importantly provide quick delivery, widespread visibility of progress and active governance to the local population, unlike more low-key and less-visible projects such as in training, education or healthcare.^[7]

Belt and Road Initiative

China has made significant inroads into Africa under the BRI. At a bilateral level, it has invested in 52 out of the 54 African countries and is poised to enter the 53 rd market in Sao Tome and Principe. According to China’s official statistics, 49 of the 54 countries (i.e. over 90 percent) have already signed MoUs.^[8] Geographically, 22 of the 49 countries (nearly 50 percent) are located in West Africa, with East Africa (12 countries), North Africa (nine) and Southern Africa (six) comprising the other 50 percent.^[9] The African Union has also signed a Memorandum of Understanding (MoU) on BRI cooperation with China. While MoUs are not legally binding, they formalise Chinese investments in the country, with due acknowledgement from the local government. This smoothens the investment process for Chinese companies in those countries. Moreover, signed MoUs can pave the way for a legally binding agreement.

There are only five African countries—Eritrea, Benin, Mali, Sao Tome, and Principe and Eswatini (Swaziland)—that have neither signed an MoU nor expressed support. However, China continues to push its presence in these countries undeterred. Recently, it started investing in Eritrea’s Koka gold mine. Benin’s President has asked local firm Petrolin and French giant Bollore to “withdraw” from a major rail infrastructure project linking Benin to Niger, to make way for China.^[10] Further, China has signed agreements worth US$11 billion with Mali, to finance two cross-country railway projects intended to link the landlocked country to the coast. Meanwhile, Sao Tome and Principe switched allegiance in May 2017, going from recognising Taiwan to accepting the “one-China policy.” On 1 April 2019, it reached an agreement with China for fast-tracking the execution of projects to be funded by China, including direct support for the 2019 General Budget. It is expected that increased Chinese investments will gradually lead some of these countries to sign MoUs or express official support in the future.^[11] 

In recent years, as China’s presence in Africa has grown, nations have one after another, turned their backs on Taiwan. Eswatini is the only African country that has resisted China’s push and continues to disallow Chinese investments. It continues to remain the only ally of Taiwan in Africa and has not attended recent FOCAC forums. 

Overarching Trends

Five significant trends emerge from China’s BRI projects in Africa. First, China is investing in ports and port areas along the coastline from the Gulf of Aden through the Suez Canal towards the Mediterranean Sea. Of the 49 countries that China claims have signed MoUs or officially expressed support for the BRI, 34 (nearly 70 percent) are located along the coast of Africa—16 in the West, eight each in the North and the East, and two in the South. These include Djibouti Port (Djibouti), Port Sudan (Sudan), Port Said-Port Tewfik (Egypt), Port Ain Sokhna (Egypt), Zarzis Port (Tunisia) and El Hamdania Port (Algeria). The People’s Liberation Army (PLA) Navy has built its first overseas military base in Djibouti, which has been in use since 2017. To serve its strategic interests, China could use its influence over these ports for economic (transport of raw materials, finished goods and labour) and military (surveillance and blockade of overseas and deep-sea maritime traffic) purposes in the future.^[12]

Second, China is using its connectivity projects (20 percent of all its projects in Africa including rail and road lines), to link its industrial (10 percent of all its projects including minerals processing) and energy projects (15 percent of all its projects including oil and renewables) in the hinterland of Africa to the infrastructure (nearly 45 percent of all its projects including ports) projects along the African coastline.^[13] Together, these four sectors make up nearly 90 percent of its major projects in the 49 countries. For instance, an oil refinery in the north of Sudan is located close to the railway line connecting Port Sudan and Dakar Port (Senegal). Gabes, a hub for petrochemical and phosphate transformation industries in Tunisia, has been connected by a railway line to the Zarzis Port. Belinga Iron Ore is located close to the railway line connecting hinterland Gabon to Santa Clara port in the coastline. An industrial park in Ethiopia is located near the Addis Ababa-Adama Highway, which connects with the Addis-Djibouti railway line connected to the Djibouti port. This enables China to use the maritime route to transport raw materials such as Phosphate, copper, cobalt, gold, iron ore, cocoa, bauxite, coal, lithium, steel, granite and marble back to the mainland, and finished goods and Chinese labour to Africa.^[14]

Third, China’s claims that its investments are being tuned to local necessities, in line with its leadership’s oft-repeated “win-win model of cooperation” is only partially accurate. The African Development Bank (ADB) has estimated that Africa’s infrastructure deficit amounts to US$ 93 billion annually until 2021.^[15]While the majority of China’s projects in Africa are in the infrastructure sector, it is also beneficial to Chinese companies that are dealing with overcapacity in key sectors such as steel, iron and cement.^[16] Moreover, despite China’s projects being executed in consultation with the local governments,^[17] the bidding processes for these projects are opaque and bribes are often paid to local officials. Consequently, the local population only occasionally benefits (e.g. access to connectivity projects, jobs in industrial and infrastructure projects) and only after the projects are completed. Many of these projects (particularly energy and industrial ones) require access to key natural resources, requiring them to be located at proximity to these resources. As a result, residents often need to be relocated, causing discontentment amongst the local population.^[18] Further, connectivity projects, largely due to their nature of covering geographical distance, invariably result in environmental alterations or encroachment upon already existing human habitation (resettlement). As of now, only around three percent of Chinese projects, in healthcare and education, provide direct benefits to the local population. The country has undertaken such projects only in three African countries: Seychelles, Ghana and Comoros.^[19] 

Fourth, China has been successful in building transnational projects in Africa only where there is either a deficit or vacuum in strong governance across countries. For instance, it seems to have made significant progress on the Mali-Guinea cross-country railway project; Chad-Cameroon oil pipeline; Sudan (Port Sudan)–Chad–Niger–Mali-Senegal (Dakar Port) railway line; and Central African Republic–Chad water diversion project (Project Transaqua).^[20] Comparatively, China has not achieved as much success on its BRI projects in nations where regional compulsions backed by strong regimes have created limitations on transnational projects, such as in neighbouring West Asia, where there are tensions between Qatar and its neighbouring countries; Israel and its Arab neighbours; and Saudi Arabia and Iran.^[21]

Fifth, China has achieved little success in working with third-partner countries on specific projects in Africa. For instance, of all its projects in the continent, it has only entered into a trade agreement worth US$14 billion with Spain, for investments in the Democratic Republic of Congo, and is working with Italy on a water diversion project in Chad and on Puntland Airport construction project in Somalia.^[22] 

Resistance Against China’s BRI

Underlying tensions amongst the local population and African governments are occasionally triggered into full-blown conflict by some of the emerging trends in China’s BRI in Africa.

First, there have been instances of “push back” amongst African countries on Chinese projects in recent times, including at least a dozen incidents of kidnapping and harassment of Chinese workers working on projects across Africa. Recently, there has been an increase in local protests against Chinese projects.^[23] In Nigeria, local protests erupted in April 2017 over the lack of compensation for buildings demolished for the construction of the Lagos–Ibadan Railway Line. In Uganda, local traders protested the presence of Chinese traders in the capital city, Kampala, in April 2017, accusing them of setting up small trade businesses instead of becoming serious investors for which they had moved to Uganda. In Tanzania, over 2,000 people were forced to relocate, leading to protests that resulted in the suspension of the Bagamoyo Port and an attached industrial zone by the Tanzanian government in July 2016. In Madagascar, local protests began in October 2016 after their land was affected, and the demolition of a church and a school was proposed to accommodate mining activities by a Chinese enterprise Jiuxing Mines.^[24] Currently, local fishermen are protesting against China’s US$2.7 billion investment in the country’s blue economy.

In Kenya, local protests erupted in fall 2016 in the area around Voi, over a 6-km elevated section of the planned Mombasa–Nairobi Standard Gauge Railway Line that was supposed to cross Nairobi national park; consequently, the Kenyan government paused its construction. A coal power plant in Lamu Island announced in 2015, to be financed with a US$ 900 million loan from Industrial and Commercial Bank of China has been halted, despite vocal support from the Kenyan government, due to local protests over environmental and economic viability concerns. An investigation by The Standard, one of Kenya’s largest news organisations, has concluded that Chinese nationals have created a small kingdom in which Kenyan workers are being discriminated against. This has led to Kenya railways launching an investigation into claims of mistreatment.^[25] In Cameroon, local protests erupted in February 2015 over the demolition of houses for constructing the Kribi Deep-sea Port and a lack of guaranteed employment. In Chad, residents have protested against Chinese presence, which is accompanied by few jobs, low pay and harsh working conditions. Ghana’s Environmental Justice Foundation has launched an investigation over claims by the Ghanaian fishing community that 90 percent of its fleet is now owned by Chinese entities, who operate using Ghanaian entities as fronts to get around a local law that forbids foreign companies from operating in Ghana’s fishing industry.^[26]

Second, there are growing concerns amongst African countries over a rising debt trap. The public debt in Sub-Saharan Africa has risen from 34 percent in 2013 to 53 percent in 2017. China owns 72 percent of Kenya’s external debt, which stands at US$50 billion. Over the next three years, Kenya is expected to pay US$60 billion to the China Exim Bank alone. In a recent report, Kenya’s auditor general has warned that the country risks losing control of Mombasa port if it defaults on loans from the China Exim Bank. The terms for a US$2.3 billion loan for Kenya Railways Corporation specify that the port’s assets are collateral, and they are not protected by Kenya’s sovereign immunity due to a waiver in the contract.^[27] Despite being one of the most rapidly growing economies in the world, ensuring it remains within prudent borrowing limits in the near future, China has provided 30 percent of Ethiopia’s total new public external debt over the past five years and 90 percent of new bilateral debt. In just two years, Djibouti’s public external debt has increased from 50 percent to 85 percent of its GDP, which is the highest for any low-income country. Much of this debt consists of government-guaranteed public enterprise debt and is owed to the China Exim Bank.^[28]

China is estimated to have provided nearly US$1.4 billion in funds for Djibouti’s major investment projects, equivalent to 75 percent of its GDP. There are several projects lined up for implementation in the near future with no indication, despite a warning issued by the International Monetary Forum (IMF), that new borrowings will be limited to projects that generate sufficient revenues to meet debt-service requirements. In 2015, Reuters reported that Angola’s people have expressed distrust in their country’s ties with China, in part because oil repayments by Angola for loans from China leaves it with little crude in world markets, one of the reasons for the country’s liquidity crisis. Angola’s debt to China, at US$ 21.5 billion in 2017, is half of its external debt. The Niger government has adopted a law that abrogates the ratification of the funding agreement signed in September 2018 with the China Exim Bank, for the executive of various developmental projects at a cost of CFA 480b. The agreement could not be enforced as cumulative conditions were not fulfilled—regarding the signing of the contract for the sale of crude to Chinese operator and of a convention for the priority projects to be funded. The Ivory Coast Government has expressed concerns over increasing Chinese influence and created a task force to monitor the development of 14 infrastructure projects. There is also growing concerns over rising debt in Lesotho around China’s Mpiti to Sehlaba–Thebe Road Project.^[29]

Third, African governments have recently announced the cancellation or postponement of major projects. In February 2018, the Zambian government revoked a Chinese company’s licence to operate coal mines due to poor safety and environmental compliance. The Opposition in Zambia has also raised concerns over China’s debt trap as well as the Zambian government’s ability to service its existing debt, considering the slump in the price of its leading export, copper.^[30]The Niger government is revising a contract against State-owned China National Petroleum Corporation (CNPC) on bloated costs and unfair charges. The Chad government shut down operations of CNPC in mid-August 2018, after discovering that the organisation was not only dumping excess crude oil but also making Chadian workers remove it unprotected. The Gabon government has withdrawn the permit for a significant oil field from Addax, a subsidiary of China-owned Sinopec, and has further threatened to cancel permits to other fields, citing environmental missteps and irregularities in paperwork. Politicians in Nigeria were recently forced to discuss the implications of a loan offered by the China Exim Bank, on the condition that its construction companies will undertake rail projects by employing Chinese workers, on jobs for locals.^[31] The Ugandan government has postponed the construction of the Kampala–Entebbe Expressway after the Opposition party raised concerns over the rising debt trap. The Sierra Leone government has cancelled the US$318-million Mamamah International Airport Project under the BRI.^[32] Talks have been put on hold regarding China Fortune’s US$20 billion investment in Egypt for land development in the new administrative capital (in the desert east of Cairo), due to a disagreement on revenue-sharing between Egyptian authorities and the Chinese company. Finally, the launch of the new “Tech City Project” in Morocco by Chinese Haite Group has been delayed.^[33] 

Conclusion

An assessment of developments related to the BRI in Africa reveals that economic factors weigh significantly in China’s decision-making regarding investments overseas. The country is primarily driven by its need to find new emerging markets for its industrial overcapacity amidst a slowing domestic economy. However, there is also a growing concern amongst China’s strategic competitors and some host African countries that China is using the BRI to mask its geopolitical and geostrategic objectives. The Chinese investments in ports along the East coast and the first Chinese military base in Djibouti have fuelled these concerns.

China claims to have adopted a pragmatic approach—what it calls a “win-win cooperation” model, in its economic investments abroad. However, in most cases, particularly in Africa, it appears to be benefiting more from its investments compared to the host countries. While most of the projects that China is pursuing in Africa under the BRI do help create infrastructure, industry and connectivity across the continent, they are immensely beneficial for Chinese companies in utilising its overcapacity and bringing labour and materials into Africa. The skilled labour in industrial projects is mostly from China, with a few African locals taking up low-end employment.

To be sure, China defends the use of its labour and materials, citing better skills and more quality that enables cost-cutting. However, it has undertaken only a few projects that benefit entirely the African population, such as building local capacity in healthcare, skills training, or education. There are also various instances of protests and cancellation or postponement of Chinese projects over lack of local employment opportunities, rising debt concerns, and violation of quality standards or incidents of malpractice on the ground. So far, the BRI remains a largely unilateral Chinese exercise, with only a few instances of collaboration with third-party countries in Africa.

About the Author

Dr L. Venkateswaran is a Global Fellow with the Asia Programme at the Woodrow Wilson Centre for International Scholars, Washington DC. He writes on issues of India’s national security, including its architecture and strategy; emerging threats in India’s neighbourhood; and security relations with the US and China in the South Asian context. 

Endnotes

^[1] World Health Assembly, “COVID-19 response, Draft resolution”, Agenda item 3, 18 May 2020, SEVENTY-THIRD WORLD HEALTH ASSEMBLY A73/CONF./1 Rev.1.

^[2] Barry Buzan, “The Logic and Contradictions of ‘Peaceful Rise/Development’ as China’s Grand Strategy”, The Chinese Journal of International Politics, Volume 7, Issue 4, Winter (2014) : 381–420.

^[3] C. Raja Mohan, “Debating China’s Peaceful Rise: The Rhyme of the Ancient Mariner”, Economic and Political Weekly, August 14, 2004.

^[4]Johns Hopkins SAIS China-Africa Research Initiative Database

^[5] Agence France-Presse, “China’s Xi offers Africa $60bn for development, says ‘no strings attached’”, The East African, September 3, 2018.

^[6]Mehari Taddele Maru, “Why Africa loves China”, Al Jazeera, January 6, 2019.

^[7]Garth le Pere, “China’s Belt and Road Initiative: Boosting trade opportunities for Sub-Saharan Africa”, The Commonwealth, issue 143, Trade Law Centre, September 2017.

^[8] Development reimagined, “Countries Along The Belt And Road- What Does It All Mean?”, September 26, 2019.

^[9] Pearl Risberg, “The Give-and-Take of BRI in Africa”, Centre for Strategic and International Studies, April 2019.

^[10] Agence France-Presse, “Benin president taps China for controversial railway – dismissing bids by local and French companies”, South China Morning Post, 23 March 2018.

^[11] Abdi Latif Dahi, “These are the African countries not signed to China’s Belt and Road project”, Quartz Africa, September 30, 2019.

^[12] David Dollar, “Understanding China’s Belt and Road infrastructure projects in Africa”, Brookings Institution, Sept 2019.

^[13] Dossou Toyo Amegnonna Marcel, “The impact of China’s one belt one road Initiative in Africa: the Evidence from Kenya”, Munich Personal RePEc Archive, Munich University, 13 December 2018.

^[14] Linda Calabrese, “Making the Belt and Road Initiative work for Africa”, Overseas Development Institute, 15 October 2019.

^[15] Albert Mafusire, et al. “Infrastructure Deficit and Opportunities in Africa”,Economic Brief, The African Development Bank Group ,Volume1, Issue: September, 2010.

^[16] Nancy Muthoni Githaiga, et al.,,“The Belt and Road Initiative Opportunities and Risks for Africa’s Connectivity”, China Quarterly of International Strategic Studies, Vol. 5, No. 1, 117–141, January 2019.

^[17] Lauren A. Johnston, “Greening China’s Belt and Road in Africa”, Mercator Institute for China Studies, December 21, 2018.

^[18] Alexander Demissie, Moritz Weigel and Tang Xiaoyang, “China’s Belt And Road Initiative & Its Implications For Africa”, World Wide Fund Kenya, December 2016.

^[19] Paul Nantulya, “Implications for Africa from China’s One Belt One Road Strategy”, Africa Centre For Strategic Studies, March 22, 2019.

^[20] Tatenda Kunaka, “One Belt One Road Initiative: An African Perspective”, Middlebury Institute of International Studies at Monterey, August 2018.

^[21] Rodgers Mukwaya Andrew Mold, “Modelling the economic impact of the China Belt and Road Initiative on East Africa”, Global Trade Analysis Project, 2018.

^[22] Raphael ZiroMwatela, Zhao Changfeng, “Africa in China’s ‘One Belt, One Road’ Initiative: A Critical Analysis”, IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 21, Issue12, Ver. 1 December 2016: 10-21

^[23] Julia Breuer, “Two Belts, One Road? The role of Africa in China’s Belt & Road initiative,” Blickwechsel, Stiftung Asienhaus, July 2017.

^[24] Laureen Fagan, New China-Africa paper calls on West to tone down the BRI drama, Africa Times, 30 September 2019.

^[25] Nyshka Chandran, “Fears of excessive debt drive more countries to cut down their Belt and Road investments”, CNBC, January 17 2019.

^[26] Mingxin Pei, “China’s expensive bet on Africa has failed Coronavirus crash in commodity prices has wasted $200 billion in investment and loans”, Nikkei Asian Review, May 1, 2020.

^[27] Dahi, “These are the African countries not signed to China’s Belt and Road project”

^[28] Anthony Kleven, “Belt and Road: colonialism with Chinese characteristics”, The Interpreter, Lowy Institute, May 6, 2019.

^[29] Agatha Kratz, Allen Feng, and Logan Wright, “New Data on the “Debt Trap” Question”, Rodium Group, April 29, 2019.

^[30] Bill Ide, Joyce Huang, “Caution, Cancellations, Protests as Concerns Grow on China’s Belt and Road”, Voice of America, October 15, 2018.

^[31] Editorial, “Africa’s experience with Chinese investors. Some parallels with Central Asia,” eurasianet, Oct 31, 2019.

^[32] Dipanjan Roy Chaudhary, “Africa cancels a Belt and Road Project for the First Time”, Economic Times, October 25, 2018.

^[33] Ian Scoones, “The Chinese Belt And Road Initiative: What’s In It For Africa?” Steps Centre, May 13, 2019.

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