Africa’s steamy love affair with China, which rattled the West, seems to be cooling off. The two ‘lovers’ are not fighting yet, and, hopefully, they might not, but the cracks in the relationship seem to be developing.
On the one hand, China has been getting rather tightfisted recently. Nice gifts of jewellery in the form of large stadia, big highways and a few skyscrapers are getting less frequent despite the fact that China’s bank account remains fat. Somehow, several requests for money, even loans at commercial interest rates, are not being accepted as fast as they used to be. For instance, loan applications for railway projects in Uganda and Kenya took at least five years to be handled and ended up with a negative response from the Chinese side.
On the other hand, Africa’s attraction to Chinese loans has been cooling in the past five to ten years as African borrowers got wary over the recovery terms of the easy-to-get money, starting with the interest rate. China’s loans fetch a high interest rate (5 per cent annually) in the region, justifiable by the fact that it is (Chinese) commercial banks and not the government that lend the money. In contrast, developmental loans from western multilateral lenders are given at around 1%. Actually, the concessional western loans from the World Bank and IMF that used to cost about one per cent with a great deal of grace period before repayment have become even cheaper and now cost about zero per cent since the Covid-19 pandemic. Additionally, the World Bank loans that used to take at least a year to process are now handled in a matter of months post-Covid. These factors, it seems, are driving the African borrowers quietly back into the Western embrace.
In the southern region of Africa, Zambia recently signed a $ 1.3 billion loan from the IMF and cancelled several loan arrangements (totalling $ 1.6 billion) that had already been fully negotiated with China. The reason given for pulling out of the China deal was that the infrastructural projects for which the money was being borrowed were not set to generate sufficient economic growth.
Moving northwards, Tanzania terminated a $ 10 billion deal for developing the port of Bagamoyo in 2018. The then President John Pombe Magufuli reviewed what his predecessor Jakaya Kikwete had signed in 2015, saying “only mad people” could accept the terms, which included a freezing of investment in Dar es Salaam and other ports. Magufuli’s position was a hard kick in China’s teeth as Bagamoyo was supposed to be a pivotal point in China’s $900 billion Belt Road Initiative which is envisaged to be a game-changing network that links Asia, Europe and Africa.
Around the same time, a rumour was getting rife in Kenya that the country was on the verge of losing the port of Mombasa to the Chinese as a result of unfavourable loan terms. There were strenuous denials by both countries but in the end, the railway deal which was the object of negotiations for additional loans recently fell through.
Moving eastwards to Uganda, the country’s only international airport has for several years been undergoing some expansion and upgrading projects using a relatively small Chinese loan of $200 million. But just over a year ago, a parliament committee followed up on the auditor general’s report on the matter, the result of which alarmed the public regarding how the Chinese lenders had the final say on how Uganda’s Civil Aviation Authority spends its revenue. Fast forward to January 2023, Uganda announced that it was discontinuing a major financing deal with China worth $2.3 billion for constructing a railway linking Kampala City to the Kenya border, and was turning to Turkey instead.
In sum, the growing trend in Africa to turn to China for the financing of development projects, especially physical infrastructure, has begun to plummet. The attraction to China was partly caused by the repellent ‘conditionalities’ by western lenders who tie their loans and grants to values hardly observed in their own countries such as democracy, human rights and environmental protection.
But besides the repulsive loan terms imposed by the West, there was also the attractive pull from China which was seen as having a better, sympathetic understanding of the continent’s problems since it had only recently been in the same boat of underdevelopment and poverty as Africa. In addition, it is believed that China is less interested in interfering in the internal politics of its debtors like the West are wont.
But even as Africans are getting a bit cautious about continuing to accept the Chinese embrace, they shouldn’t be impervious to learning a few things from the relationship. Africa should be able to gain something by way of knowledge and experience from the relationship. And with knowledge and experience, wealth can be generated and accumulated.
What should Africa learn from China?
All the reasons that are affecting China’s relations with Africa may not be easy to decipher. But what matters, after so many candle-lit dinners on sweet and sour pork, is what Africa has learnt from the relationship that dates back hundreds of years when Chinese merchant ships started sailing to Africa. While there may be hundreds of lessons to learn from Africa-China relations, some are too obvious and salient to be ignored.
First, the quality of human life of Chinese people, which fifty years ago wasn’t much higher than in African countries, has now dramatically improved to the extent that extreme poverty in China has been reduced to zero. Here, African leaders should seek to find out what China got right that they are getting wrong with regard to poverty eradication.
Secondly, China has over the years engaged in wholesome planning with strict timelines, leaving no sector behind, especially the most strategic sectors such as agriculture, thereby ensuring food security.
Thirdly, in all aspects of public life, China pursues a policy of zero tolerance for corruption. You cannot develop when your modest resources are wide open to theft.
Fourth and above all, China has equipped its people with skills to the extent that it has overtaken the US in the number of STEM (Science Technology Engineering Mathematics) PhDs produced every year. Moreover, while most STEM doctorates from America are awarded to foreigners, nearly all of China’s are Chinese.
Curiously though, the management of the projects China has financed in Africa does not seem to reflect China’s traditional ways of doing business. After the original grand projects of sports stadia which were solidarity gifts from the people of China to the African ‘brothers’, the modern projects are mostly infrastructural. Why on earth aren’t the railways, for example, built using steel smelted from the local iron ore deposits? There seems to be a frequent disregard for wholesome planning, with projects being designed without much consideration for using as many local inputs as possible, not only to reduce the costs but to also generate more local economic activity while implementing the project. These are mistakes that China would not make.
And why in this day and age are most of the railways planned to use dirty fossil fuels when there is a stupendous capacity in Africa to generate electricity, so that Africans can move goods and passengers using high-speed trains as is the case in China? Why are African decision-makers perpetuating outdated technology and skills while paying no attention to the damage to the health of the population that is subjected to more polluted air from smoky trains? Is there any serious input by the borrowers in the project designs and implementation?
Such questions should be asked by Africans no matter who their governments are borrowing from. At the end of the day, given a choice between satisfying China or the West, Africans should choose Africa instead.