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Belt and Road Initiative: An opportunity or risk for Africa?

Ruchita Beri is Senior Research Associate at the Institute for Defence Studies and Analysis, New Delhi. Click here for detail profile.
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  • April 15, 2019

    The forthcoming Belt and Road Initiative (BRI) Forum meeting, scheduled to be held in Beijing in late April, has put the spotlight on the growing engagement of China with African countries. In the last two decades, China’s engagement with African countries has grown by leaps and bounds. The Belt and Road Initiative, launched by China in 2013, with the focus on funding infrastructure development projects, provides an opportunity for African countries to address the infrastructure deficit on the continent. African leaders have in turn prioritised infrastructure development as the main pillar underpinning national as well as regional development. This task requires significant financing and Chinese support in this regard will no doubt help them achieve their infrastructure goals. However, it also leaves these countries open to the risk of unsustainable debt and mounting dependence on China.

    Belt and Road Initiative

    BRI, also known as the One Belt, One Road initiative, was introduced by President Xi Jinping in September 2013.1 It involves China underwriting billions of dollars of investment in infrastructure projects to connect China with rest of the world, on the lines of the ancient Silk Road. It is an ambitious project straddling countries in Asia, Africa, Europe and Latin America. This encompasses investments in infrastructure projects in various fields such as construction, power, transport, communication, and energy. China has proposed “policy coordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bonds,” as the five major goals of cooperation underlying the BRI.2

    Initially, Africa found limited space in the conceptualisation of the BRI. However, over the years, the scheme has become an important part of the continent’s relationship with Africa. In fact, the declaration issued at the end of the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) notes that “Africa, being part of the historical and natural extension of the Belt and Road, has been an important participant in this initiative”.3 South Africa, Ethiopia, Kenya and Egypt were some of the initial countries to sign up to this project. In addition, China managed to get the support of Djibouti by opening its first overseas military support base in the country in 2017. As per the latest count, the African Union and 37 African countries have agreed to join the BRI.4

    Opportunity or Risk?

    There are a large number of BRI projects already being executed on the continent. It is to be noted though that some of these are pre-BRI infrastructure projects financed by China, to build ports, roads and railways all across Africa. A notable example is the Standard Gauge Railway (SGR) project in Kenya. President Uhuru Kenyatta signed the deal during his visit to China in August 2013.5 This connects Mombasa port with Nairobi and will eventually extend to other landlocked countries in East Africa such as Uganda, South Sudan, Burundi and the Democratic Republic of Congo.6

    China’s increasing role in Africa, including its assistance in infrastructure development, is generating competing narratives across the continent. The first considers China as a partner in the progress of the continent. For decades, African countries looked towards traditional donors, such as the USA, France and the UK or multilateral institutions (the World Bank and the IMF) for addressing the huge infrastructure gap. However, the conditional terms of lending and emphasis on good governance have left them wary of continuing to look at these sources for infrastructure funding. In contrast, Chinese approach eschews conditionalities related to good governance or human rights and concentrates solely on the task of infrastructure building, which offers an attractive alternative for these countries.

    African leaders often reiterate that cooperation with China through the Belt and Road Initiative will broaden the continent’s developmental prospects. President Kenyatta, while inaugurating the SGR, a BRI project, noted that this project “is a testament to the comprehensive China-Kenya relationship, which is based on mutual benefits” and “marks a transformative moment for Kenya and for Africa”.7 Moreover, for other land locked countries like Ethiopia, the BRI offers access to new markets such as Europe. Ethiopia has in recent years become a manufacturing hub, with the help of Chinese development assistance. The flagship BRI project in the country, the standard gauge railway line connecting Addis Ababa to a port of Djibouti, facilitates imports and exports.8

    As against the above view, the competing narrative views Chinese involvement in the continent negatively. Voices in countries across Africa from Djibouti to Zambia accuse China of indulging in debt trap diplomacy. They claim that China has laden a number of countries with heavy debt and may exploit the defaulters by appropriating vital strategic assets. There are fears that Djibouti may face the same fate as that of Sri Lanka. In 2015, Sri Lanka ceded control of Hambantota port on a 99 years lease to China as it defaulted on repayment of loans. Djibouti, located in the Horn of Africa, has a debt to Gross Domestic product (GDP) ratio of 88 percent, with China responsible for bulk of the debt. 9 It seems that China is tightening its grip over the Duraleh container terminal in Djibouti. In February 2018, Djibouti government announced that it was suspending its contract with the UAE based firm, DP World, to manage the port.10 The state owned China Merchant Holdings (CMP), the same company that is in control of Hambantota, owns 23.5 percent of the port. Thus speculation is rife that Djibouti government may cede Duraleh to China in the near future.

    Similarly, in December 2018, a leaked report linked to the Kenyan auditor general claimed that the Mombasa port was used as collateral for the $3.2 billion loan from China for development of SGR, a BRI project.11 This leaves the Mombasa port exposed to seizure by the Chinese government in the event of a default. While both the Chinese and the Kenyan governments have denied the report, this development has opened a national debate. Many questions have been raised about the risks involved in borrowing from external powers for large infrastructure projects. China continues be a major bilateral lender, though multilateral institutions and traditional powers also contribute to Kenya’s overall external debt. 12 

    Hence the jury is still out as to whether China’s Belt and Road Initiative is an opportunity or risk for the African countries. It will depend on the African countries negotiating skills to navigate the future relations with the Asian giant to their benefit.

    Views expressed are of the authors and do not necessarily reflect the views of the IDSA or of the Government of India.

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