Why Is China Investing Billions in Africa? | NowThis World - YouTube

China has invested billions of dollars into the continent of Africa to build massive infrastructure projects. Much of this infrastructure is part of China’s Belt and Road

Initiative, an estimated 1 trillion dollar plan to connect the country to trade routes all over the world. African leaders like Kenya’s Uhuru Kenyatta have favorably compared China’s

investments to earlier projects built by colonial powers.

While the old railway was built by force and violence against the wishes of those whose land it divided, the new railway is built by consent and partnership both between

ourselves and China and between the governments which will prosper and profit by it.

But is China’s investment in the continent actually a “win-win” as some African and Chinese leaders have said? Or just a new form of colonialism on a continent that’s

experienced so much of it?

In this episode, we’re examining China’s Belt and Road Initiative and what it might mean for Africa.

While China’s Belt and Road Initiative was only proposed in 2013, the country’s first infrastructure project on the African continent was built decades ago. The Tazara railway,

completed in 1976, was built to connect copper mines in Zambia to Dar Es Salaam, Tanzania’s former capital. The Tazara railway was the first infrastructure project built on a

pan-African scale. China’s Belt and Road projects will be designed with this scale in mind, creating new trade routes within and between African countries. In 2017, a Chinese firm

opened a railway network in Kenya, connecting its capital Nairobi to the port city of Mombasa. There are already plans to extend this network into South Sudan, Uganda,

Rwanda and Burundi. China, through its public and private sectors, has already loaned about $132 billion to African countries from 2006 to 2017. Many observers worry that

African countries won’t be able to pay back these debts, placing them in what’s been called a quote “debt trap.”

The Jubilee Debt Campaign, which campaigns for poor countries’ debts to be canceled, estimates that about 20% of debt held by African governments is owed to China, making it

the single largest lending nation. For comparison, 35% of African debt is owed to multilateral, global institutions like the World Bank.

Earlier waves of Chinese firms that invested in Africa made mistakes that caused problems for those countries’ governments. Starting in 2005, tens of thousands of workers from

China poured into the west African country of Ghana to take advantage of a gold rush. This eventually provoked a local backlash due to accusations of illegal mining, inflaming

tensions between Chinese miners and the local government. Many observers have pointed to projects like this as examples of China exploiting Africa for its natural resources through

quote “neo-colonialist behavior.” However, other observers contend that the majority of investment from China has largely avoided creating the problems seen in Ghana’s gold

mines, precisely because resource extraction has not been the main focus of other investments. In fact, the number one industry for Chinese investment has been the service

industry, according to IMF economist Wenjie Cheng. She also points out that the countries where China’s investment has been largest include those without abundant natural

resources, such as Ethiopia and Kenya, in addition to resource-rich countries like Nigeria.

Ultimately, African governments may feel that the risk of accumulating debt is outweighed by the benefits of new infrastructure. The China Africa Research Initiative found that

roughly 40% of China’s loans between 2000 and 2015 went towards paying for energy projects and another 30% went toward modernizing transportation on the continent.

These loans were set at relatively low interest rates and with longer periods of time to pay them back. The Center for Global Development crunched the numbers on debt to China

as a result of the Belt and Road Initiative, and found that eight of the 71 countries involved in the project were particularly vulnerable to getting caught in a debt trap. Of these eight

countries, only one was in Africa: Djibouti, a port country that’s also become a military strategic point for China. The other seven countries are in Europe and Asia.

Nevertheless, China has denied engaging in “debt trap” diplomacy.

In an attempt at thisto strengthen this collaboration, China has also promised to align its goals for the Belt and Road Initiative with the African Union’s own development goals

of greater interconnectivity on the continent. However, these promises have yet to be outlined.

Ultimately, China’s push in Africa may be seeking to increase the country’s influence, rather than reap financial gains. Its investments are already strengthening China’s alliances

with African governments, to China’s benefit. Every African country but eSwatini, formerly known as Swaziland, has cut ties with Taiwan, a prerequisite for diplomatic relations with

mainland China. Some observers think that as African countries rise economically, they could actually have the upper hand by the time they negotiate payments back to China.

This explains why African leaders have been so confident in calling Chinese investment a “win-win,” but only time will tell if their long game pans out.

So do you think China’s investments in Africa will be a boon to the continent, or are they a form of neocolonialism?

Let us know in the comments below. Thanks for watching NowThis World, don’t forget to like and subscribe.