China consolidates itself as an economic and commercial alternative after the last summit with the continent
By Jaume Portell Caño
China hosted its ninth summit with the African continent in early September. This year it was attended by presidents and representatives of all countries except one, Eswatini, which still diplomatically recognizes Taiwan. During the meeting, Chinese President Xi Jinping highlighted what has been done in recent decades, in which his country has granted loans for infrastructure linked to transportation and energy. Some projects that, he said, “have changed the lives and destiny of many people.” Xi Jinping promised financing of $51 billion over three years and the creation of one million jobs. Loans will be granted in yuan.
Nigerian Ovigwe Eguegu, political analyst at Development Reimagined, a consulting firm formed and led by Africans, tells MUNDO NEGRO that “the last two decades have been very beneficial for African countries from the perspective of infrastructure,” and highlights that financing It served to make many of the projects pending for years, such as ports, airports or dams, a reality.
Among the most recent works that will soon be launched are a 2,000 km pipeline that will allow Niger to export oil through Benin, or the 600 km railway line that will transport iron from the mines in Guinea to the coast. Both will diversify the sources of income of these countries, although the remaining challenge is to go beyond the export of unprocessed raw materials.
An example illustrates how trade, as it stands, harms Africans. Ethiopia’s main export, coffee, generates hundreds of millions of dollars each year, although the country can barely exploit its potential. Meanwhile, Switzerland has bought unprocessed coffee since 2021 at between $4 and $6 per kilo, which it then sells, already processed, for more than $30.
This allowed Switzerland to earn five times more than Ethiopia in 2023 by selling coffee to the European Union despite moving fewer tons than the Ethiopians. Switzerland does not have any plantations on its territory; everything imports from countries in the global south like Ethiopia. With only 3% of global exports, the African nation barely influences prices in a market whose main buyers – and companies – are in the North. Most African countries are stuck in that type of trade relationship.
This generation of value on the continent constitutes the main challenge, as the professor of Political Science at Wake Forest University, Lina Benabdallah, recalled in a recent report: «Minerals by themselves do not create jobs. “From an African perspective, processing and transforming these minerals does offer significant opportunities.” Benabdallah points to one of the factors why the continent has become a battlefield for the great powers: the electric vehicle industry, whose batteries require lithium, cobalt or nickel, all of which are present on the African continent.
One Spaniard, 12 Nigerians
Data from Boston University shows that, in recent years, China’s loans to the continent have been declining as the Asian country’s economy has slowed. After peaking at $28.8 billion in 2016, injections declined to $1 billion in 2022. Last year they grew again to $4.6 billion. Benabdallah pointed out on her X social network account that, beyond money, China will train 2,000 African doctors, offer scholarships to 60,000 students and offer training courses to the military and officials of African political parties.
Thanks to Chinese loans, since 2008 Ethiopia has multiplied its annual electricity generation by four, which has focused on hydroelectric power. This is a trend that has allowed millions of Africans to increase access to supplies, although per capita consumption is still far from that of a country like ours. A Spaniard consumed, on average, 33,000 kWh of energy in 2023, a figure equivalent to the average of 11 Angolans, 12 Nigerians, 36 Ethiopians or 109 Burundians. Without energy, African countries will hardly be able to climb the value chain to develop their own industry.
“There is a widespread need for technology transfer and skills development,” says Eguegu, who projects that, for continental development, there must be a market that can absorb part of the goods that Africans produce: “Africans need to build tools to its own development and also have a market. If you manage to attract investment and develop skills, it is necessary to advance in the value chain and have export capacity. This is also what makes China so attractive. “We can see China as a destination for our exports.”
Africa’s role in the world
Many African countries are experiencing a delicate economic moment. China’s economic slowdown has caused some to lose export revenue. This, added to the rise in interest rates in Europe and the US and the arrival of debt maturities, has generated bankruptcies in some countries (Ethiopia, Ghana, Zambia) and uncertainty in others (Kenya, Egypt). The situation of vulnerability is highlighted by the fact that the IMF – omnipresent in the 80s – is once again a main actor in the daily lives of millions of Africans.
Many young Africans, who have demonstrated against the austerity measures that the Fund recommends to their governments, feel mistreated by an institution whose main contributions come from the richest countries. For this reason, many leaders see China as a lever in the opposite direction, comments Eguegu: “African countries are looking to China to fulfill their global ambitions, with a view to reforming the quotas of the IMF and the UN Security Council. “They are seeing China as an ally to drive these changes that they would like to see in terms of global governance.”
Time will tell if these changes will occur or if what Chidi Odinkalu, professor at the Fletcher School of Law and Diplomacy, at Tufts University, said when he recently declared to the Financial Times that he was worried that Africa, instead of benefiting from getting a seat at different tables, would end up finding that it is actually still on the menu, ready to be devoured by different diners.
