MBALE – So many years ago, some European Powers sat down in the comfort of their offices and hatched a plan to own Africa, they succeeded with their mission.
On their arrival, they had a bible in one hand and a gun in another; those who refused to be humbled by the bible were silenced by gun powder.
Historians argue that the rushed imperial conquest of the African continent by the European powers started with King Leopold II of Belgium when he involved European powers to gain recognition in Belgium.
The Scramble for Africa took place during the New Imperialism between 1881 and 1914 and never stopped, we are still their subjects.
Even after their physical presence in Africa, we continued to experience laced decades of colonial exploitation, which together with developmental assistance programmes such as the International Monetary Fund’s structural adjustment initiatives of the 1980s and 1990s, has had debilitating consequences.
To date, many African Countries still borrow in order to settle pressing debts which are always on the increase. In my own country Uganda, the footprints of colonialism continue to influence how things are done.
At one time, they asked us to privatize all Government parastatals which we did, they also hatched a plan to destroy industrialization, cooperative societies and indigenous banks, these decisions were later regretted by our leaders.
Before our tears could dry off, another Leopard in a sheep’s skin was cunningly raising its head ready to pounce, am talking about the Chinese and their long-term plan to take over from where former colonial masters stopped.
Unlike the Europeans who came with the bible and the gun, the Chinese came with cash in their hands and promised to perform and offer something better than European colonial masters, we bought the idea and in doing so jumped from the frying pan into a blast furnace made of coal.
Scholars who view China’s involvement in Africa as negative have generally described such relations in terms of power asymmetry between the economic giant and the politically vulnerable African governments.
The concepts of neo-colonialism or neo-imperialism have been often used to describe Chinese interest in Africa and the renewed engagement of China with African states and their growing assertiveness on the global stage has spurred a polarising debate on the conceptualisation of China’s involvement in Africa.
Indeed, the African policy, as part of the Chinese Communist Party’s foreign policy of the “Going Global Strategy”, poses some serious questions about the role of China as a rising power and its impacts on the current international system order- as a status quo or revisionist power.
China is today the second-largest economy in the world (International Monetary Fund World Economic, 2017). Ever since Deng Xiaoping ?s reforms of China’s economic system in 1978 and onwards, the country has led itself towards market liberation and has undergone great economic growth since then. As the Cold War ended in 1991, China became more and more interested in the African continent.
They had the desire of becoming Africa’s leading developmental partner by firming up investments and trade with and within different countries in Africa. Since 1991, there have almost been 900 Chinese companies that have invested in oil wells, farms, factories and retail shops in different parts of Africa.
In addition, China decided to create a number of development and aid programs in different parts of Africa. Their foreign policy towards the African continent consists of having an approach that embraces aspects such as mutual partnership, cooperation and mutual benefit. This type of attitude could indicate a win-win situation for both sides, giving them the effect of gaining enormously from this improved interaction but beneath the table, a sinister motive lies.
In 2013 Chinese President Xi Jinping launched an international investment program that became known as the Belt and Road Initiative (BRI). Under a new mantra to connect the global economy, China began investing heavily in foreign infrastructure projects in over 60 countries that account for 60 percent of the world population and 30 percent of global gross domestic product.
From 2013 to 2018 China made an estimated nearly $614 billion worth of investments in countries participating in BRI. It is predicted that China’s overall expense from BRI could reach $1.3 trillion over the next decade.
Traditionally, China’s presence in Africa has been viewed by African Presidents as a development partner and an economic competitor but I think their strategy being the monies they are pumping in is a precursor to colonialism. This marriage of convenience will certainly end in tears.
In 2015 China promised $60 billion in grants and commercial loans to finance economic development projects in Africa. African leaders were eager to accept the financial assistance and as a result, China holds 14 percent of sub-Saharan Africa’s total debt stock and is the largest owner of public debt in Africa. Public financing programs can often be a useful tool for local governments to build projects that generate economic growth. But an over-reliance on Chinese financing is saddling Africa with greater debt, leaving the continent at a strategic disadvantage in the future.
Fast-forward to the millennium period and China’s strategic interests in Africa become more pronounced, they have a presence in almost all African Countries.
The Asian superpower is in search of resources like oil, gas and metals to meet its energy imports and construction demand, and to sustain its manufacturing industry.
More recently, China has branched into non-resource investments like building infrastructure through the Road, airports, railway lines and Belt initiative, not to mention industries that assemble already manufactured items like televisions.
African leaders have embraced economic engagement with China, which is perceived as a welcome alternative to the continent’s long-standing Euro-American ties that often came with demanding conditions.
Africa’s relationship with China has offered significant benefits, particularly in bridging the continent’s infrastructure deficit but at a futuristic cost that we are bound to regret when they start setting conditions for paying back. Owing to the ‘no conditionality’ policy, many African countries have turned to China as the partner of choice.
However, the relationship is increasingly showing some characteristics evident during colonialism, raising questions about the true cost of the benefits Africa is getting from China. Only as recently as 2015 did China start visibly focusing on the commercial and viability aspects of their investments due to a general public outcry from stakeholders.
The Africa-China cost-benefit conundrum partly lies in the terms for collateral on loans. China has effectively mastered the intricacies of long-term collateralisation of assets and resources. It takes the form of a barter system: in return for investment capital and infrastructure, some countries grant China resource concessions, allow it to take an ownership stake in the infrastructure projects, or secure loans against their natural resources and assets as collateral.
The number of African countries indebted to China and subsequently handing over their assets or resources are in no short supply. Zambia, Angola, the Democratic Republic of the Congo, Mozambique, Ethiopia, Sudan, Kenya and Djibouti are just some of the countries who resources are at stake.
In Zambia, reports indicate that China is already in control of the country’s broadcasting company, and the state is preparing to offer its national electricity company to China as security against a loan.
China has proposed taking over the Kenneth Kaunda airport in Lusaka if Zambia cannot meet its loan repayment commitments. The same threat was echoed in Uganda but the Government and some Chinese officials poured cold water on it with well-packaged lies.
The extent of Zambia’s debt is unclear and without exact figures. China also has direct equity interests in copper, coal and manganese reserves. Similarly, Madagascar pledged a huge portion of its land as collateral for loans.
In the DRC, in return for the US$9 billion loan to upgrade road and rail systems that connect routes to extractive industries, China gained rights to extract up to 10 million tons of copper and 420 000 tons of cobalt over 15 years. In Djibouti, by the end of 2016, 82% of external debt was owed to China and the country handed over control of its port which sits in a strategic location that acts as a main access point for American, French, Italian and Japanese bases in the country. China might get a 99-year lease with a 70% stake.
The Lamu port in Kenya could also be under threat. Kenya is expected to default on its loan repayment terms and be forced to hand over the adjoining towns and the biggest port in East Africa to China for 99 years.
China could also take over some of the country’s mineral assets if Kenya defaults on payments for the acclaimed standard gauge railway from Mombasa to Nairobi. Most of the projects undertaken by China are capital-intensive ventures like ports, railway lines, roads and even airports. Rarely does it invest in more basic amenities like sanitation programmes. China then reclaims and runs the assets for profit when countries default.
The loans are big and the terms leave sub-Saharan Africa with little revenue of their own from commodity production while increasing their debt levels. Multilateral organisations like the African Development Bank, the World Bank and last-resort lenders like the IMF generally give loans at lower-than-market rates.
However, the China Africa Research Initiative, which tracks Chinese financing, indicates that the sources of loans range from China’s ministry of commerce to policy banks like the Export-Import Bank of China, private/commercial banks and state-owned enterprises.
The World Bank classifies 18 sub-Saharan countries as being at high risk of debt distress, i.e. having debt-GDP ratio above 50%.
Currently, 20% of Africa’s external debt is owed to China, making it the largest single creditor nation. China has established a clear footprint in sub-Saharan Africa and continues to make inroads among countries with relatively weak governance structures and a lack of transparency and accountability.
There is nothing inherently wrong about Africa engaging with China. Every country acts in their best interests. China has just become more efficient in exploiting the continent than the West.
Every country should do its due diligence when entering into a loan agreement with any entity. The feasibility of projects needs to be assessed, and the best possible terms for loans negotiated. States must ensure funds are used efficiently and for the projects they were intended. If a loan cannot guarantee return on investment, it is probably not wise to take it in the first place. It is on this score that Africa’s political leaders are failing the continent by allowing the continued plunder of its assets and resources.
Almost all the money that China lends Africa goes back twice as much yet the loan remains and continues to attract interest. Writing off these loans usually involves very secretive deals with African leaders and the contracts so signed hidden from public scrutiny.
Soon the Chinese will demand that our children be subjected to compulsory learning of Chinese language and who knows, we may abandon English and resort to Chinese as our national language of choice.
David Mafabi is a veteran journalist and PML Daily senior writer
