Africa pays the price as China and Russia muscle in - GulfToday

Africa pays the price as China and Russia muscle in

China needs to offer a workable programme to its African allies to unload a huge debt burden.

China needs to offer a workable programme to its African allies to unload a huge debt burden.

China and Russia are bolstering their presence in Africa to tap its rich natural resources, analysts say, amid grave warnings from UN agencies the world’s poorest countries face accumulating crippling debts. “One out of every three major infrastructure projects in Africa is built by Chinese state-owned enterprises, and one out of every five is financed by a Chinese policy bank,” said Paul Nantulya of the Africa Center for Strategic Studies, an academic institution within the US Department of Defence. Russia, a key arms exporter to Africa, is also making forays into the continent including through mining projects granted to the Wagner private paramilitary group, he said.

At a UN-sponsored summit in Qatar of the Least Developed Countries this month, leaders condemned the treatment of their nations. After Western countries reduced their infrastructure financing, it created a void that China and Russia stepped in to fill. “The Chinese saw the gap and decided to put their money in infrastructure,” Nantulya said.

But it mostly amounts to a “debt trap,” warned Anna Borshchevskaya of the Washington Institute think tank. “China offers loans for expensive infrastructure projects, but they typically fail,” she said. “When the countries can’t pay the loans, China then takes control over strategic assets of a country.” China, the world’s number two economy, rejects practising “debt-trap diplomacy” as an unfair criticism from Western rivals who have themselves burdened nations with huge debts. “Partnerships are built with friendship and good faith,” Chinese Foreign Minister Qin Gang said this month. Projects led by China in Africa include the Standard Gauge Railway linking the Kenyan port city of Mombasa to the Rift Valley, which cost $5 billion and was financed 90 percent by Beijing. It is Kenya’s biggest infrastructure project since independence and was opened in 2017. China is Kenya’s second-largest lender after the World Bank. In December 2022, Tanzania signed a $2.2 billion contract with a Chinese company to build the final section of a railway line aimed at linking the country’s main port with its western neighbours. Some China-funded projects have been profitable and sustainable, but the real benefit is to Beijing, with maintenance contracts that can run up to 99 years, said Nantulya. Chinese-funded projects are “designed to absorb Chinese labour”, he said, which means they don’t do much to reduce unemployment in Africa — although some governments insist on a quota for their own citizens. During a visit to Senegal in January, US Treasury Secretary Janet Yellen sought to tout the benefits of a new “mutually beneficial” US economic strategy towards Africa.

“Countries need to be wary of shiny deals that may be opaque and ultimately fail to actually benefit the people they were purportedly designed to help,” Yellen said, alluding to China. “This can leave countries with a legacy of debt, diverted resources, and environmental destruction.” Debt is not restricted to China and Russia alone, said Tetteh Hormeku of the Ghana-based African Trade Network, noting huge sums are owed to Western nations — including the former colonial powers who once controlled much of the continent.

“About 50 percent of our debt is owed to Western commercial bond markets and multilateral agencies,” he said at the Doha summit. The 1990s debt crisis in Africa was caused by Western countries, not by China or Russia, said Nantulya. However, Chinese investments lack transparency compared with those from the West, which face greater scrutiny at home, he added. Russia too has been expanding its involvement in Africa through mining projects won by Wagner, which is also fighting in Russia’s war in Ukraine.

In January, the United States accused Wagner of “committing widespread human rights abuses and extorting natural resources” in African countries. Last month the European Union announced new sanctions on the group for “human rights abuses” in the Central African Republic, Mali, Sudan and Ukraine. “Wagner is operating in undemocratic and authoritarian environments where corruption is just a way of life... because it knows that it can get away with a lot,” said Nantulya.

Agence France-Presse

Related articles