Advertisement
Advertisement
Advertisement
Advertisement
African leaders in Beijing target significant financial deals and investments

African leaders in Beijing target significant financial deals and investments

African leaders in Beijing target significant financial deals and investments

African leaders in Beijing target significant financial deals and investments

Advertisement
  • China has provided billions in loans to African nations, 
  • Critics accuse Beijing of burdening nations with debt and funding infrastructure projects.
  • African leaders are expected to seek more Chinese investment and more favorable loan terms.
Advertisement

This week, African leaders have descended on China’s capital, seeking funds for major infrastructure projects as they navigate the growing competition among great powers for resources and influence on the continent. Over the past decade, China has strengthened ties with African nations, providing billions in loans that have supported infrastructure development. However, these loans have also sparked controversy by leaving some countries with significant debt burdens.

China has deployed hundreds of thousands of workers to Africa to construct its megaprojects while exploiting the continent’s vast natural resources, including copper, gold, lithium, and rare earth minerals. This week, Beijing has announced that the China-Africa forum will be its largest diplomatic event since the COVID-19 pandemic, with leaders from South Africa, Nigeria, Kenya, and other nations confirmed to attend, and dozens of delegations expected.

Ovigwe Eguegu, a policy analyst at consultancy Development Reimagined, told the news that African countries are “looking to tap the opportunities in China for growth.” As the world’s second-largest economy, China is Africa’s largest trading partner, with bilateral trade reaching $167.8 billion in the first half of this year, according to Chinese state media.

Research by the Chinese Loans to Africa Database revealed that Beijing’s loans to African nations last year were the highest in five years. Angola, Ethiopia, Egypt, Nigeria, and Kenya were the top borrowers. However, analysts noted that China’s economic slowdown has made Beijing more reluctant to disburse large sums. Additionally, China has resisted offering debt relief, even as some African nations struggle to repay their loans and are forced to cut spending on essential public services.

Since the last China-Africa forum six years ago, “the world experienced a lot of changes, including Covid, geopolitical tension and now these economic challenges,” Tang Xiaoyang of Beijing’s Tsinghua University told the news.

He said that the “old model” of loans for “large infrastructure and very rapid industrialization” is no longer feasible.

Advertisement

The continent is a key node in Beijing’s Belt and Road Initiative, a massive infrastructure project and central pillar of Xi Jinping’s strategy to expand China’s influence overseas. The BRI has directed much-needed investment to African countries for projects such as railways, ports, and hydroelectric plants.

Critics accuse Beijing of burdening nations with debt and funding infrastructure projects that harm the environment. One controversial project in Kenya, a $5 billion railway funded by the Exim Bank of China, connects the capital Nairobi with the port city of Mombasa. However, the second phase, intended to extend the line to Uganda, never materialized as both countries struggled to repay their BRI debts.

Last year, Kenya’s President William Ruto requested a $1 billion loan from China and sought to restructure existing debt to complete other stalled BRI projects. The country now owes China over $8 billion.

Alex Vines, head of the Africa Programme at London’s Chatham House, said that recent deadly protests in Kenya were triggered by the government’s need “to service its debt burden to international creditors, including China.” In light of these events, Vines and other analysts expect African leaders at this week’s forum to seek not only more Chinese investment but also more favorable loan terms.

In central Africa, Western and Chinese firms are competing to secure access to rare minerals. The continent boasts rich deposits of manganese, cobalt, nickel, and lithium, which are crucial for renewable energy technology. The Moanda region of Gabon alone holds up to a quarter of the world’s known manganese reserves, while South Africa produces 37 percent of the global output of the metal.

The Democratic Republic of Congo dominates cobalt mining, accounting for 70 percent of the global total, while China leads in processing, handling 50 percent. Mounting geopolitical tensions between the United States and China, which are clashing over issues ranging from Taiwan’s status to trade, also impact Africa. Washington has warned against what it perceives as Beijing’s malign influence.

Advertisement

In 2022, the White House said China sought to “advance its own narrow commercial and geopolitical interests (and) undermine transparency and openness.”

Beijing insists it does not seek a new cold war with Washington but aims for “win-win” cooperation, promoting development while benefiting from increased trade.

“We do not just give aid, give them help,” Tsinghua University’s Tang said.

“We are just partners with you while you are developing. We are also benefiting from it.”

Analysts fear that African nations might be forced to pick sides.

“African countries lack leverage against China,” Development Reimagined’s Eguegu said.

Advertisement

“Some people… think you can use the US to balance China,” he said. “You cannot.”

Also Read

95 Libyans deported by South Africa after being found at military camp
95 Libyans deported by South Africa after being found at military camp

The men were detained since a raid on July 26, when they...

Advertisement
Advertisement
Read More News On

Catch all the International News, Breaking News Event and Latest News Updates on The BOL News


Download The BOL News App to get the Daily News Update & Follow us on Google News.


End of Article
Advertisement
In The Spotlight Popular from Pakistan Entertainment
Advertisement

Next Story