Given the pattern of growth achieved so far, economic growth in Africa has become a source of concern. But one would wonder if the trajectory achieved so far is debt or organically driven. Many Africa leaders claim have always been centered on the need to build infrastructure. But, there has never been a question from Africa seats of power about how China did it? They are quick at unending search for crumbs from structurally developed economies. Can Africa grow her economic and infrastructure base organically? That is the right question to ask about the new trend in Africa debt loving leaders. There is need to know if the continent is actually blessed with resources enough for capital formation. The easy way out has proven to be very expensive, talking about continental positioning, Africa is well laced with resources, compared with China. Then, surely, something must be wrong. Getting it right must be about vision. It is about selfless understanding of people needs.
The burden of debt is heavy. Too heavy. It insubordinate the borrowers to their creditors in some circumstances and context. Nigeria, in five years spent N7.8 trillion servicing debts. That’s heavy and the tempo is getting high daily. It doesn’t have to come from the Chinese, debt is debt, and some are more expensive compare with the China’s offering. Unfortunately, China credits to Africa is a tool to take over Africa economy and subject her people to new style of colonization that is budding – Economic colonization.
On the other hand, other school of thoughts would say, don’t demonise China, Africa needs all the support she can get from developed economies, actually, Western support has not only declined, it has well failed the continent. With West, it is purely commercial. By estimate, African Development Bank, AfdB, hinted that infrastructural finance deficit will gulp as much as about $200 billion annually and this has to come from somewhere.
China-Africa Research Initiative in 2017 reported that the Chinese government, Banks and Contractors has extended total sum of $143 billion in loans to Africa governments and their states owned enterprises and nobody
blinked. Instead, Africa is asking for more year after year. Ordinarily, one would have thought Nigeria is leading the pack of the indebted nation, but Angola is on top the list with $42.8 billion disbursed over 17 years.
What about Chinese-Africa trade position? The value of China Africa trade was $126 billion in 2016, down from a high of $215 billion in 2014. The largest exporter to China from Africa was not Nigeria but Angola, followed by South Africa and then the republic of Congo. Who buys more from China? Report from China Africa initiative shows that in 2016, South Africa was the largest buyer of Chinese goods followed by Egypt and Nigeria.
Apparently, level of indebtedness in Africa is heavy, scary and intimidating. On the other side, loans from foreign countries is fast becoming the new weapon of economic colonization or perhaps recolonization
strategy that will ravage Africa, maybe again. And China has started building momentum.
The question is why Africa? Why is Africa resource-filled but economically a powerless continent – also her political innuendo never add up. It is either African leaders are on the lookout for grants and aid or loans or all at the same time from structurally balanced nations or begging for loans forgiveness! It has already started, with Nigeria owing as much as about $10 billion to supporting projects. Federal Government borrowing is already hitting the roof top.
As at 2017, the whole of Sub-Saharan Africa has total debt exposure that settled at about $19 billion. Of the sum, Kenya and Nigeria accounted for about half of the sum. At the moment, China owns about 20 per cent of Africa’s total debt exposure. To that extent, it means Africans may have
mortgaged their rights in the same fraction to Chinese. Probably when next Africa descendants see a Chinese on the street, they should know, provided that alarm has not blown; that China is their new economic colonial master.
The Zambian government contracted the Chinese, lazy-thought and glossed over details thinking they were granting consent to genuine terms but the whole thing just morphed into modern day colonialism.
China is now proposing to take over the Kenneth Kaunda International Airport should Zambia Government fail to pay back its huge foreign debt on time.
The issue of whether Zambia possesses the required economic muscle to repay that debt is in contention considering the amount involved. It’s typical of the Chinese
That, moreover, is not the only thing Zambian suffered from China; the Chinese already own 60% shares of the Zambian National Broadcasting Corporation which means, Chinese have an influence over what should or should not be premiered on their sets.
Ghana is equally toeing the same line as its leaders have started signing contracts already; Chinese owned company, STARTIME is gradually gaining grounds over our major institutions, the biggest mining companies will soon be “taken” over by a Chinese company and many others.
The Center for Global Development, a non-profit research organization, analyzed debt to China that will be incurred by nations participating in the current Belt and Road investment plan. Eight nations will find themselves vulnerable to above-average debt: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan.
It is no doubt, Africa is suffering from dearth of infrastructure in billions of dollars. Unfortunately, the continent has no will or capacity to exploit her resources optimally, thus has to look elsewhere for bread and butter. China has it, in surplus. It is what it is, market economy. To have taste of infrastructure needed, Africa may need as much $200 billion per annum. The money which the continent has not been able to save in spite of the fact that it account for some two billion of the global populace. Not even the oil region are free from indebtedness. To put succinctly, no Africa countries has creditor status to others.
This makes African, with exception to few, living in poverty, below standard. But it is not okay to quickly forget that Chinese, are predominantly predatory in nature. Africa, are politically and economically ineptitude. Then, both meet at an equilibrium point, Forum for China-Africa Cooperation. That would have been a much needed window for uplifting the face of Africa as United State bilateral economic relationship remains satanic to Africa development in the recent time. Unfortunately, African leaders are bad negotiators, Zambia has felt the sting of participation as her loans defaulted. China ran over Zambia when she defaulted.
Using tying credit strategy, China has been able to woo many Africa countries in the debt net. By that practice, China will only facilitate loans to Africa while Chinese companies are responsible to manage the project each loan pack is tied to. The rush for Chinese loans is due to simplicity of the procedure. But China is not without an objective. To expand into Africa where the West is
shying away from.
According to report from China Africa Research Initiative, latest data which was in 216 indicate that the gross annual revenues of Chinese companies’ engineering and construction projects in Africa totaled $50 billion, a slight decrease from 2015. The top countries according to the report were Algeria, Ethiopia, Kenya, Angola and Nigeria. While these countries accounted for 49% of all Chinese companies’ 2016 construction project gross annual revenues in Africa, Algeria alone accounted for nearly 17%.
Africa is not without opportunities. It may interest you that number of Chinese workers in 2016 was 227,407 according to official Chinese sources. Meanwhile,
Chinese don’t go to where there is economic opportunities or prosperity, albeit untapped by the locals. Algeria has turned to the base where Chinese seeks opportunities, as the country accounted for 40% of Chinese workers in Africa. Angola, Kenya, Ethiopia and Nigeria are their key targets.
On the back of the fact that Many Africa countries have massive need for infrastructural development. From the Northern part to the South, you will hardly visit a country in Africa without seeing need
for some infrastructural assets. Light rail is not common, hospitals not well equipped, good water often scarce, housing not enough and energy not efficiently, effectively and economically generated.
The west, often would like to keep Africa at low end, then ensure they have places to market their goods and services. Africa infrastructure need is expected to gulp some billions to build, and China needs market to sell just like other western countries that see Africa as their markets.
Though, signing economic agreement
among African countries has proven to be herculean task as many fear that their neighbours may have hidden agenda the other economic don’t desire, but preference is given to neo-economic colonialism. And China is leading the war straight down to the Africa soil. Many Africa leaders are quick to signing deals with China without asking what is in it for the Chinese often known as pristine capitalist economy packaged as socialist market economy.
With total loans climbing to $200 billion, Africa countries are highly exposed to Chinese in terms of average total debt in her portfolio. The renewed rush is making Africa debt profile scary. Without recourse to proper assessment of what is in for the Chinese, Africa countries are receiving
China into the continent with open arms, unfortunately on the back of Greek gift that the socialist market economy is offering to the black economy.
Africa, a continent that is blessed with resources is govern by leaders with median age average youth when the youth economies accounts for more than 75% of the combine size of GDP that crossed $3.52 trillion in 2017 and purchasing power that more than double.
It is however suffice to say that; China open arms to financing infrastructure across the continent is a move for an economic enslavement awaiting to burst as the bubble keeps pilling and African leaders smiling at potential economic demise that will soon greet the continent. But China is innocent. African leaders are not. The ascendancy of the economic infiltration is on the back of failure by the west to supporting Africa rising agenda, especially, the satanic political economic trade policies of the west designed to keep Africa at bay.
Unfortunately, many Africa leaders are not seeing this. Penchant for accessing debt is on the rise, and unlike the Paris agreement where debt forgiveness was negotiated, China may not have stomach for that. Instead, the socialist market economy sectarian sovereign will run over Africa, taken the continent assets and becoming key stakeholders in African economic policies directions.
If Chinese loan support to Africa is a ruse to run over the continent, Africa should develop economic bullet proof to withstand the heat, guide herself with much needed economic performance.