Is Africa back from FOCAC with new focus?

ESWATINI, THAT TINY COUNTRY in the Southern African region was the only country not represented in Beijing last week during the ninth triennial summit on China-Africa relations. The summit, which is generally referred to as the Forum on China-Africa Cooperation (FOCAC), has turned Beijing visits by African heads of state to some sort of pilgrimage. And the 2024 summit was no different. What was different was that China has adopted a style of alternating the hosting between China and Africa. The eighth summit was held in Dakar, Senegal in 2021.

The weaknesses of Africa are becoming more amplified as it is now becoming customary for China to make superlative announcements of money the country intends to commit to Africa. Often nebulous in details, such money is usually said to be for Africa’s infrastructural development. And most African countries appear upbeat about it. However, the Eswatini’s position of recognising Taiwan’s sovereignty as a nation is a principled stance which irks China. Thus, in that circumstance, Eswatini has no diplomatic ties with China. The remaining 53 African countries are unprepared for that as they court China and curry its favour. Clearly, African countries falling heads over heels on China have failed to realise that it is even China that reaps most of the benefits of its relationship with Africa. This has to do with Africa’s lack of a strategy for engagement with China, whereas China keeps an eagle eye vigilance on Africa. 

Although the figures emanating from China-Africa trade relations sound great, the stories behind such figures have yet to be curiously critiqued by any serious African leader. While China-Africa trade reportedly reached a record high of $282.1 billion in 2023, up 1.5 percent year on year, what is often missed is the trade asymmetry between the country and Africa in which case the balance of trade is more in favour of China than Africa. Specifically, Africa perennially experiences a deficit in its trade relations with China, with African countries spending hugely in importing products of technology while exporting low end raw commodities to China. In 2023, for instance, China’s imports involved mainly African nuts, vegetables, flowers and fruits which attract little value and low revenues.

China’s interests in Africa’s timber, minerals and petroleum are remarkable. Apart from questions raised about human rights violations in China’s operations in some countries, there are allegations about environmental impacts of China’s exploits in the extractive industries, namely mining and logging. Moreover, there are widespread complaints about China’s practice of importing its citizens into Africa to do menial jobs that Africans can do, thereby robbing Africans of the benefits of seasonal or project-related job opportunities. It is no longer news that China’s mostly State-Owned Enterprises are the handlers of projects funded with Chinese loans to African countries, which casts some doubts on the level of transparency involved in such projects as well as the loans from China. In particular, approval of loans for projects that failed feasibility study tests have been alleged in the past, leaving people bewildered on how much they can possibly trust China on loans. The Hambantota port project in Sri Lanka remains a reference case in point. 

Fears of legal footnotes and fine prints in bilateral agreements that could jeopardise the interests of borrower countries are among the concerns often raised about borrowing from China, in which case China goes for the debtor nations’ jugular while asking for repayment. Seizing nations’ strategic sovereign assets in return for loan default can be humiliating, can hurt national pride and can lower its esteem. But that is irrelevant to China. The Hambantota port project was reportedly not well thought-out at the onset, plunging Sri Lanka into a conundrum and a vulnerability to China’s own term, which led to China’s takeover of the said port for 99 years from 2018 in lieu of loan repayment. In essence, Hambantota port was built by China for China on Sri Lankan soil, occupying 15,000 acres of land. It may well be that China was well ahead of Sri Lanka in scenario thinking and permutations on the project before staking its funds to it. The transfer gave China control of a vast territory just a few hundred miles away from  India’s shores, and provided a strategic foothold along a critical commercial and military waterway. China’s loan to Sri Lanka could therefore be safely assumed to have been for a purpose entirely different from what Sri Lanka originally believed as it now becomes a place for China to exert its influence over a rival nation from a different geographical location. 

The Hambantota port project also gave away China’s proclivity for ambitious use of loans and aid to gain influence around the world. It also opens China up for criticisms on its willingness to play hardball to collect back its loan in cash or in kind. China’s renewed Belt and Road Initiative (BRI) under President Xi Jinping is also suspect as it tends to elicit accusations that the global investment and lending programme amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behaviour in struggling democracies.

The periodic rituals of announcing huge sums of money for Africa would look superficially well-intentioned. But, to what real endgame are such announcements? In 2018, China announced $60 billion of such money for Africa. It dipped by one-third to $40 billion in 2021 and has just been increased this year to $50.7 billion. What for? 

FOCAC may indeed be gaining traction in Africa. While the 2015 FOCAC meeting in Johannesburg attracted 13 African heads of state or government, the 2018 FOCAC in Beijing had over 50. The subdued attention in Dakar in 2021 could be attributed to COVID-19 pandemic restrictions in which case, China’s Xi himself delivered his speech virtually to the attendants. Now, this year’s attendance was by all but one country from Africa. But after that jamboree, when and how Africa will operationalise the gains of the pilgrimage are the next set of questions that must be practically, objectively and realistically answered by the attendees. 

The trade relations between China and typical African countries are quite obvious. In 2022, China exported $21.4 billion goods to Nigeria, including $792 million non-knit women’s suits, $566 million rubber footwear and $503 million broadcasting equipment. Although the total trade volume has now risen to $24 billion, Nigeria’s exports to China are mostly petroleum and gas estimated at $451 million, crude petroleum of about $299 million, and $94.6 million of lead ore over the past five years. 

Rather than continuing to appear helpless and desperately in need of external support, Africa will have to figure out how to properly position itself in its relationship with China in ways that will bring trade surplus to Africa on a sustainable basis. One of such steps had been taken in September 2021 by DR Congo’s President Félix Tshisekedi, during his call for a review of the 2008 mining contracts agreement signed with China by his predecessor in office. In Tshisekedi’s opinion, DR Congo deserves a fairer share of its vast mineral wealth. Accordingly, Mr. Tshisekedi announced his intention to see the “technical and financial details of Sino-Congolese contracts” and renegotiate mining contracts, particularly the negotiated highly contentious minerals-for-infrastructure contract with the Chinese in 2008 valued at $9 billion under the former president Joseph Kabila, who held power from 2001 to 2019.

During his period in office, Tanzania’s late president John Magufuli discontinued the age-long mining tradition of processing outside the country. Very much like Magufuli is the present military head of state in Burkina Faso, Captain Ibrahim Traoré. In 2023, he revised the country’s mining code to enable it to take more in royalties in boom times. He suspended all foreign mining licenses, including those held by Russian companies. Lately, Traoré threatened to withdraw mining permits granted to companies from countries that refuse to sell military equipment to Burkina Faso. For other African countries, similar tough decisions need to be made by their leaders such that they do not appear beholden to any country that is profiting at the expense of Africa. 

It is therefore important for Africa to turn the table in the China-Africa trade relations by becoming more self assertive and setting the rules of engagement rather than just taking dictations from China. Looking inwards, African countries can decide to do without the handouts from China that have an appearance of benevolence. Many of those infrastructural development projects upon which African countries take Chinese loans could be financed through alternative means under less stringent and highly demanding conditions. Meanwhile, the Grand Ethiopian Renaissance Dam (GERD) was constructed partly with the money obtained from the bonds raised by the government of Ethiopia from citizens at home and in the diaspora. On remittances to Nigeria, PWC, a consultancy, estimated that migrant remittances could grow to $25.5 billion, $29.8 billion and $34.8 billion in 2019, 2021 and 2023 respectively. These, if managed through formal channels, could help Nigeria greatly in financing major development projects.

The vulnerability of Zambia to China on account of sovereign loans is already well documented. One of the projects for which Zambia obtained China loans was a railway project in Zambia. By 2019, when China came, threatening to recover all, the China Exim Bank clarified that it now has full control over Kenneth Kaunda Airport, Zambia’s main broadcast corporation and ZESCO power plant, the country’s main public electricity utility. The downside of China’s debt diplomacy has enormous implications. Based on this, some countries recently turned down China’s loans on account of terms that have the potential of enslaving them. Malaysia, Pakistan, Nepal, and a host of others could not go ahead with loan agreements with China because of reservations about China’s style. Even a poor Myanmar recently expressed misgivings about falling into what was described as “debt trap” in China’s loan.

And, unlike the multilateral lending agencies such as World Bank and International Monetary Fund (IMF),  China’s loans have been objects of harsh criticisms for their seeming rigidity in terms of repayment. During Olusegun Obasanjo’s presidency, a defaulting Nigeria enjoyed $18 billion debt forgiveness, written off by Paris Club, a cartel of lenders. China loan emphasises none of these. African countries’ political leaders therefore need to understand their bargaining strength and deploy it well in their diplomatic and trade relations with China. They should stop giving an impression that they are beggars who desperately need one country to help them out of financial doldrums. Africa, made up of 54 countries, should stop the mentality of dependency on any single foreign nation. It should rather start attracting them and making them compete for Africa’s attention and approval, no more the other way round.

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