Unmasking Africa’s predating donor from East Asia – China

9 Min Read

The late Kenyan Scholar  Prof Ali Mazrui’s documentary ‘Africa- A Triple Heritage’, has the best analogy on what China is doing to Africa Nations today.

In the film, Mazrui shows how European colonialism destroyed Africa’s ability to make its own things- a trick he termed as Predatory capitalism.

He gives the example of the Balunda, the Baluba and the Basanga people of what is today the DR Congo, who used clay produced by termites to smelt copper from which they made all manner of farming implements, weaponry and even decorations.

However, the coming of Western imperialism through predatory capitalism and appropriation of resources killed local industries.

“…and then the Europeans came. Did they want to learn from the technology they found here? Oh no! At least the Baluba and the Balunda had consulted the technology of the termites and benefited from it. But European technology was more arrogant more self-confident and less compromising. It abolished the old technological order and in its wake it left new forms of desolation in Africa.”  Mazrui said.

As Africa is now too good to ignore, global economic giants such as China, United States, France and the United Kingdom scramble for its share.

Among the four, China is coming out strong just like the European technology.

A case in point is two months ago when Investors at the Nairobi Securities Exchange incurred a loss of Sh118.7 billion as a result of tension in global trade, sparked by looming trade war between the U.S. and China.

According to Kenyas Central Bank Weekly statistical bulletin,  all indices and market capitalization declined, slowing post dividend growth momentum when the bourse recorded an equity turnover growth of 46.82 percent. 

So how and why, are they doing it?

A story is told in the Financial Times of how China set its foot in Africa way back in the 15th century when shipwrecked sailors from the fleet of Zheng landed in an island off the northern coast of Kenya Pate Island.

The Chinese explorers reached the east coast 500 years ago swapping Chinese treasures with African exotica such as Ivory Ostriches and Zebra’s.

The contact was later consolidated under Mao Zedong with anti-colonial solidarity and the construction of engineering works, notably the 1,860km Tanzam railway linking Zambia with the Tanzanian coast.

Fast forward to today, the Asian economic powerhouse is undertaking the China Belt and Road Initiative to connect Asia, Africa and Europe.

It is a state-backed project for global dominance aimed at connecting China to 65 other countries that account collectively for over 30 percent of global GDP, and  62 percent of the world population.

Monetary-wise, Chinas debt held by Africa stands stands at $143 billion up from $50 billion in 2006 atleast according to Kenyas Standard Media.

This is exclusive of the $60 billion China’s President Xi Jinping pledged to African governments during the recently held Forum on China-Africa Cooperation (FOCAC) summit in Beijing.

The pledge is to be given as $20 billion in new credit lines, $15 billion in foreign aid: grants, interest-free loans and concessional loans, $10 billion for a special fund for development financing and $5 billion for a special fund for financing imports from Africa.

Jinping also urged Chinese private companies to invest not less than $10 billion in Africa in the next three years.

According to data from the China Africa Research Initiative, China has disbursed loans to atleast 48 African countries. Angola is the top recipient of the Chinese loans, with $42.8 billion disbursed over 17 years.

Ethiopia follows in second position with $13.7 billion, Kenya is third at $9.8 billion.

The East African nation currently owes the Asian country $5.5 billion slightly below debt to World Bank that stands at  $5.8 billion.

The two lenders alone now account for about one fifth of Kenya’s total public debt load, which has already crossed the $50 billion mark.

In fourth and fifth position is the Republic of Congo and South Sudan owing the Chinese $7.42 and $6.49 billion respectively.

A majority of the lending is used for infrastructure development.

Sri Lanka Example

It is said that when a deal is too good, we should think twice.

This is exactly where Africa, once labelled a dark continent by the West is. Its sweet-sour position has seen some of its countries surrender its precious assets to repay the debts.

For instance, In December 2017, Sri Lanka formally handed over Hambantota Port to China on a 99-year lease after struggling to pay loans from the Chinese nation.

Reports by the New York Times, noted that Sri Lanka politicians said the Hambantota deal valued at $1.1 billion, was necessary to chip away the debt estimated to be more than $8 billion.

Word on the streets early last month was that China, famous for its iconic great wall would lake over Zambia’s National electricity supplier- ZESCO as a guarantee to its debt.

However the Edgar Lungu led Nation has since denied the rumors.

Even as China continues to play santa clause to desperate African Nations, the United states considered Africa’s largest donor is not becoming uncomfortable.

In August, US Senate raised concern about high infrastructure debt issued to developing countries by China under the Belt and Road Initiative. It termed Chinese funding as ‘predatory’.

A letter dated August 3, posted on Georgia senator David Perdue’s website, the senate raises concern about China’s debt trap diplomacy and negative effects of BRI to developing countries which latter turn to IMF for bailouts.

“We write to express our concern over bailout requests to the International Monetary Fund by countries who have accepted predatory Chinese infrastructure financing. The financial crisis illustrates dangers of China’s debt trap diplomacy to countries and security threats to US,’’ the letter said in part.

According to the letter, 23 out of 68 countries currently hosting BRI funded projects are at risk of debt distress while future BRI related financing in eight of those countries raises concerns about sovereign debt sustainability.

CARI reveals that the US disbursed $12 billion just to Sub-Saharan Africa in 2017, and $250 million to North Africa.

However Deborah Brautigam, CARI director says that “This could change under the Trump administration’s budget cuts.”

On the other hand, in her visit to Africa in August, UK Prime minister Theresa May pledged pledged $5.2 billion in support for African economies, to create jobs for young people.

In addition she pledged a shift  in aid spending to focus on long-term economic and security challenges rather than short-term poverty reduction.

Data from the United Nations Conference on Trade and Development shows that UK direct investment in Africa was $55.51 billion compared with $57.59 billion from the US.

As the scramble continues, the rest of the world can only watch if African Nations and its leaders will resist the easy to get Chinese loans or (just like T’challa in the fiction movie Black panther) it will rally its muscles and release full power of Black Panther to defeat its foes and secure the safety of its people.