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China-Africa relations: Exaggerations and minimisations

AFRICAN Society general secretary Ahmed Haggag (left) is chief executive officer of Radio Misr Mahem Abdelaziz. PICTURE: CHAMBO NG’UNI

CHAMBO NG’UNI, Cairo, Egypt
DEVELOPING countries in Africa, among them Zambia, are looking to China to support infrastructure development and economic growth in their countries.
While international financial institutions attach stringent borrowing conditions, China’s loan financing model is less tedious.
Currently, China is the largest single bilateral financier to Africa. The bulk of the funding to the resource-rich but poor continent goes towards infrastructure development.
This goodwill has, however, attracted scepticism. Critics accuse China of pushing a neo-colonialism agenda by trapping African countries through loan and aid assistance to exploit their natural resources.
However, African governments appreciate the precarious financial situation of their countries, and the need to address economic challenges, development stagnation and lift their people out of poverty.
“Is China doing anything for Africa? Are they trapping Africa into debt by giving a lot of money or is China taking advantage of Africa?” African Society general-secretary Ahmed Haggag asked African journalists last week.
Giving a lecture on the theme: ‘Chinese-Africa relations between exaggerations and minimisation’ at the Union of Africa Journalists 52rd training for young African journalists in Cairo, Ambassador Haggag backed China’s financial support to Africa.
He told journalists from different African countries that the loan repayment conditions by China are favourable and attract “very nominal interest rates”.
The former Assistant Secretary-General of the Organisation of African Unity, forerunner of the African Union, notes that China’s presence in Africa dates back to the pre-independence era.
“China is a newcomer to Africa although it supported liberation movements in Africa before but it’s a newcomer,” Mr Haggag said.
“It’s either they (Chinese) are admired or criticised or even vilified in the Western press. They don’t know what to do with Chinese presence in Africa.”
Mr Haggag noted that during the 2018 Forum on China-Africa Cooperation (FOCAC) Beijing Summit, Chinese President Xi Jinping pledged US$60 billion (£42bn) in the form of loans and investments.
At the 2015 FOCAC Johannesburg Summit, President Xi pledged US$60 billion in loans and grants to Africa for development.
Mr Haggag , who noted that China’s benevolence is commendable, said this is why African leaders value their relationship with the Asian economic giant.
According to China’s Ministry of Commerce, over the years, China’s direct investments to Africa have slowed slightly in recent years, from a peak of US$3.4 billion in 2013 to US$3.1 billion last year.
Africa’s total external debt is estimated at US$417 billion and 20 percent of this is owed to China.
President Xi defends China’s financial support to Zambia and other countries, stressing that it is aimed at addressing bottlenecks to development in Africa.
At different forums, President Xi has reiterated that financial support to Africa is not towards any vanity projects but to critical areas of need like infrastructure development and investments.
Over the next three years, China is expected to undertake eight major initiatives with Africa in industrial promotion, infrastructure connectivity, trade facilitation and green promotion.
Between Zambia and China, trade has over the years grown to US$3.8 billion.
The relations between the two countries has also seen an accumulation in amounts of investments to over US$3 billion and over 500 Chinese companies operating in Zambia.
Given Zambia’s backlog of underdevelopment, Government is contracting loans from China for upgrading infrastructure and to build a firm economic base to uplift the living conditions of the people.
Addressing the 3rd Session of the 12th National Assembly in September, President Edgar Lungu said the relationship between China and Zambia is not that of “a horse and rider”.
“I want to emphasise that all forms of bilateral cooperation with China are, and will always be, informed by this noble focus on the need to build a supporting infrastructure to enable our people to build sound and sustainable livelihoods,” President Lungu said.
President Lungu maintains that the two countries have enjoyed cordial relations for many years, therefore assertions that Zambia’s natural resources and key assets are being mortgaged to China are false.
“Our friendship with China is mutual, and no amount of reckless propaganda will deter us from entrenching this relationship for the common good of our people. We are proud of our friendship with China, Europe, America and India,” President Lungu said.
However, in a recent statement, the International Monetary Fund (IMF) warned that Africa is heading towards a new debt crises with the number of countries at high risk of doubling their debt.
The World Bank has classified 18 African countries as at high risk of debt distress where debt to GDP ratio surpasses 50 percent.
But some African leaders argue that their partnership with China is mutually beneficial to the continent and the Asian giant.
At the Beijing FOCAC, Rwanda’s President Paul Kagame and his South African counterpart Cyril Ramaphosa and other presidents lauded China for cooperation with their countries.
President Kagame said the relationship is a win-win partnership aimed at growing economies of China and Africa.
“Africa is not a zero-sum game. Our growing ties with China do not come at anyone’s expense. Indeed, the gains are enjoyed by everyone who does business on our continent,” Mr Kagame said.
Traditionally, China has had a pattern of doubling or tripling FOCAC pledges: from US$5 billion in 2006 to US$10 billion in 2009, to US$20 billion in 2012, and to US$60 billion in 2015, according to Yun Sun, a non-resident follow at Global Economy and Development, Africa Growth Initiative.
Ms Yun emphasised that China is committed to setting up a US$10-billion special fund for development financing, reflecting China’s changing model of financial engagement in Africa.
“Evolving away from the previous “resources for infrastructure” model, China has been increasingly keen on utilising financing provided by Chinese development finance institutions, such as China Development Bank and China-Africa Development Fund, to support Chinese companies’ equity investment in Africa,” Ms Yun noted.
Mr Haggag says China has financed more than 3,000 largely critical infrastructure projects in Africa.
Between 2000 and 2014, the Asian economic giant extended more than US$86 billion in commerce loans to African governments and state-owned entities.
Ambassador Haggag urged African countries that contract loans from China to use the money in productive areas such as education, health and for propelling industrialisation.
“All this money is not lost; nobody gives money free of charge. It is a loan, we have to pay back,” he stated.
“Even Egypt concluded a huge agreement (financing) with China, but we have to pay back.”

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