The fact of the matter is that if you want to do anything serious in the region within a tight political business cycle and need financing,
calling Beijing is typically the smart option. This is especially true if you happen to be an incumbent in a competitive electoral democracy like Kenya or Zambia (I hope Washington sees the irony here). According to Nikkei Asia,
. The same dynamics obtain in the private sector. Whether you are looking for machinery or cheap imports (and increasingly markets), China is often the best option. Trends in trade volumes demonstrate this fact. In 2022 Africa-US trade (under $40b) was less than a fifth of Africa-China volumes.
The Biden administration is
to get American companies to invest in Zambia.
It’s hard to beat something with nothing as Nigerian Vice President Yemi Osinbajo explained during his
China is Africa’s largest bilateral trading partner and about $254 billion in trade in 2021. China is the largest provider of foreign direct investment, supporting hundreds of thousands of African jobs. This is roughly double the level of U.S foreign direct investment and China remains by far, the largest lender to African countries.
Chinese companies have also taken the lead in exploiting minerals in Africa, many now in lithium mining in Mali, Ghana, Nigeria, DRC, Zimbabwe and Namibia. Most African countries are in my view, rightly unapologetic about their close ties with China. China shows up where and when the West is reluctant to show up. And many African countries are of the view that the “beware of the Chinese Trojan loans” advice from the West is wise, but probably self-serving.
Africa needs the loans and the infrastructure and China offers them. In any case, the history of loans from Western institutions is not great. The memory of the destructive conditionalities of the Breton Woods loans is still fresh and the debris is everywhere. And the preoccupation of Western governments and media with the so-called China debt trap might well be an overreaction.
The truth is that all the Chinese lending to Africa is only 5% of all outstanding public and publicly guaranteed debt in low- and middle-income countries, compared to 23% held by the World Bank and other multilaterals. Chinese banks provided 63% of the total debt relief while being only owed 30% of the debt service payments due.
In the arguments about the Chinese death traps (as it is called sometimes) and the large amounts of loans to African countries, I think that what is clear is that the Chinese have proven to be quite responsible in the giving out of these loans.
