It has become almost the norm, and every time China meets its African “friends”, it commits itself to amounts that, at first glance, are perceived as important. This time again President Xi Jinping announced a financial availability of $ 60 billion, re-explained his One Belt One Road ambition and promised to expand cooperation to sectors such as health, education and culture. This level of commitment represents exactly the same amount that was taken three years ago at the penultimate FOCAC in Johannesburg, South Africa.
These commitments may seem like a windfall, given the decline in the volume of capital from the traditional partners of Africa that are Western countries, both in terms of official development assistance and in terms of foreign direct investment. But in reality and the details of the figures and facts, the big announcements of the China-Africa Cooperation Forum, face big weaknesses, to the disadvantage of Africans. Three recommendations to rebalance his relationship with the Middle Kingdom:
1) Closely monitor the volume of trade and service contracts where China remains (too) successful
The first point is that, whatever one may say, the financing of cooperation remains weak in light of what China is gaining in Africa. Since the first China-Africa Forum held in 2006, the commitments totaling $ 155 billion have been announced by the Middle Kingdom. If we take into account the fact that the last will spread over the next three years, it is a little more than $ 11 billion made available each year to all African countries under the FOCAC.
Figures collected by the Ecofin Agency from the various central banks in the region show that these major announcements of the FOCAC last 12 years represent on average only 0.5% of the continent’s overall GDP in 2017 ($ 2216 billion ).
But China derives substantial benefits from this leadership position it has towards its partner. Beyond the support on the world political scene, the returns of this cooperation are very positive for her.
According to official data on the activities of Chinese enterprises in the world, the value of contracts for services signed by them in Africa was $ 390 billion over the period from 2006 to 2016. Finally, data published by The Johns Hopkins SAIS China-Africa Research Initiative on the volume of Chinese loans to Africa ($ 126.6 billion), suggest that the continent has paid from its own pocket, a large part of the contracts made by Chinese companies.
The loss effect may become more important for Africa, if we add the fact that the guarantees of some of these loans are backed by reserves of raw materials or agricultural land, thereby depriving the region of a negligible of its resources.
In terms of trade in goods, China has become a net surplus on its partner since 2015 and this situation remains unchanged. In total between 2006 and 2016, the net gain for Xi Jinping’s country was $ 48 billion.
2) Give less echo to the effects of ads and more to concrete results
The other challenge of announcing Chinese commitments is the speed of disbursement. Very often, African heads of state are in a hurry to take stock of their travels in China, and the number of signed agreements often embodies the degree of success of the country’s diplomatic strategy. Many African states took advantage of the event to organize business forums or formalize exchanges on contracts or loans.
However, recent research has focused on the degree of execution of these Chinese commitments to reveal that the bulk of the agreements made, sometimes is not the subject of efficient execution. These announcements with China sometimes take the form of Agreement of Principle on which it is still necessary to work. But we have seen, as is always the case with sub-Saharan administrations, that putting content in these framework commitments can become very complex. The loser in this gap is very often the region.
For example, in Zimbabwe, over the last five years, in particular, a long list of projects has been identified as “bankable” and included in various technical and cooperation agreements signed with the Chinese, for amounts close to $ 33 billion over the last 20 years. Yet of all these amounts, less than $ 2.5 billion has been released to date. But China, at the same time has offered land concessions in the country, which are very profitable.
The other example is Ghana. Over the last two decades, the country has committed more than $ 60 billion. Former President John Atta-Mills, for example, during a state visit to China in September 2010, signed agreements worth more than $ 15 billion. To date, Ghana has effectively received about $ 3.5 billion from China.
3) Balancing responsibilities, before disillusion occurs, as with the West
China, however, should not be blamed alone for this situation. It is generous, but hard to negotiate details and modalities of disbursements. But the fact is that most African bureaucrats and technocrats refuse to devote time and effort to understanding the many factors that influence the release of funds promised in China. Instead, they simply turn to new patterns when elders cannot find their way. In the end, dozens of agreements in principle, sometimes, do not reach the stage of concrete achievements.
DENNY_OW Image taken on a Facebook wall
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