Tag: FOCAC

Building a Community With a Shared Future: A Liberal view of Sino-Uganda Relations

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By Balongoofu Daniel

To understand Sino-Uganda relations and Sino-Africa relations in general, the role of China to the economic development of Uganda can be best understood by evoking liberalism as a profound theory in understanding mainstream international relations. Today, mutual benefit philosophy and common prosperity are central in when describing the relations between Kampala and Beijing and broadly, Sino-Africa cooperation. It should be noted that the two countries have enjoyed fruitful relations that have fostered economic development in Uganda. Sadly, and arguably due global politics, some Sino-Africa skepticist especially in Global north often view Sino-Uganda and broadly Sino-Africa relations in colonial motifs which definitely is wrong and miss presentation of historical facts since China has never colonized any country!

While it is true, that the end game of international relations is fostering selfish interests, it is now common knowledge that with China’s philosophy of common prosperity, China’s relations with other countries like Uganda is purely not selfish but a win-win cooperation which Beijing firmly believe is key in ensuring and building a community with shared prosperity for mankind.

China’s Belt and Road Initiative (BRI) is a vivid example show casing the win-win nature of relations Uganda and Africa in general are enjoying with China. It should be noted that BRI mothers lots of projects aiming at mutual benefit of the two sides. Through infrastructure development, BRI is connecting Asia with Africa, Middle East, Europe and the Americas. This in many ways will and in some countries is already facilitating transportation of goods and services. With expansion of Entebbe international airport near complete, Uganda is one of many countries already enjoying fruits of BRI. Also, a recent report by the Africa Policy Institute noted that since the BRI was initiated proposed in 2013, China has boasted African countries’ infrastructure by funding modern infrastructure projects such as railways, roads, ports, dams, industries, and digital connectivity, injecting vitality in the region. These projects also left thousands of Africans getting employment opportunities, sparking economic growth in the long run.

Giving example of Kenya, Africa Policy Institute report pointed at several multiplier effects of Kenya’s China funded and constructed 670-kilometer modern Standard Gauge Railway (SGR) connecting the port of Mombasa and the inland port of Naivasha. The Ethiopia-Djibouti’s standard gauge railway which connects landlocked Ethiopia to Djibouti port also constructed under BRI also improved transport in the region. The Chinese-built 752.7-km line recorded about 86.13 million U.S. dollars in revenue in 2021, which is up 37.5% compared to 2020 revenue collections.

In production and industry sector, Chinese investments in Uganda have greatly boasted Uganda’s capacity. For example, today Uganda boasts of a number of industrial parks that are contributing to the country’s economic growth and development. Industrial parks such as in Namanve, Kapeeka, and Mbale have liberated Uganda from losing foreign exchange in purchasing commodities that were not produced in Uganda. These parks have also contributed to skill enrichment of Ugandans who are employed there! The goods being products of high tech ensuring good quality, Uganda can also favorably compete at the regional market brining more foreign exchange to the country

Cooperation being at the core of China-Uganda relations, it has been evident in the construction of infra-structures for example the hospitals like the China-Uganda friendship hospital in Naguru.

Liberalism understood as cooperation in this case is evident in the education and cultural exchange program as part of relations. Education and culture being at the core of negotiations at the Beijing summit in 2020 it’s absolutely evident that the matter is centric of China-Uganda relations. Through the Confucius Institute at Makerere university, it should be noted that the institute has a memorandum of understanding between Xiangtan university, an institution in Hunan province in China which offers 30 scholarships annually to Ugandan students.

In terms of Trade, the good cooperation between China and Uganda has seen Uganda gain from trading with China. In his book: Introducing Liberalism in International Relations Theory, Jeffrey W Meiser emphasizes the role of good relations between countries if favorable trading conditions are to be realized. It is not a surprise that China has been working to increase trade quotas to Uganda and entire African continent as a way of ensuring both sides benefit from their cooperation. Also, for over a decade, China has always been one of not only Uganda’s but many of African countries’ foreign direct investments. A report by the United Nations COMTRADE database on international trade that analysed trade between the states with statistics in the year 2020 shows that Uganda exports quiet a number of products to the Chinese market that include oilseed, oleagic fruits, grain seed, fruits, plastic, wood products, gums and so many others that totally amounted to US$39.61million. Therefore, with this important aspect in economic growth, Uganda’s economic growth has been greatly fueled by diverse trade the two countries guided by China’s philosophy of win-win cooperation as Beijing works with other countries to build a community with shared prosperity for mankind as well as common development.

By Balongoofu Daniel is a Junior Research Fellow with Development Watch Centre, a Foreign Policy Think Tank.

China-Africa Relations: What to expect in 2022 and beyond.

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By Allawi Ssemanda.

The year 2021 ended on a very good note for African countries in context of Sino-Africa relations with Beijing showing readiness and commitment to double down its development support and cooperation to African countries.

Looking at Action Plan for the year 2022-2024 produced from November 2021 Forum on China-Africa Co-operation (FOCAC) ministerial conference held Senegal, it is clear that China is ready to increase its development support to African countries. One can also confidently argue that this Action Plan which details how China and African countries will co-operate in the next three years will highly succeed considering the fact that it was generated through consensus which reflects China’s relationship with African countries – mutual respect and the partnership of equals!

The nine areas identified in this action plan namely; peace and security, digital innovation, promotion of trade, people-to-people relations, promotion of investments in African countries, supporting medical and health programs, poverty reduction, supporting agricultural programs, green development, and capacity building are all key to African countries economic and sustainable development.

Despite striking similarities in some sections of 2018-2021 action plan, the 2022-24 action plan has packages that if well implemented will spur economic, social and sustainable development.

For example, the 2022-2024 action plan has a package of $40 billion financial commitments of which $10 billion will be invested in specific sectors, namely; manufacturing industries, agriculture and digital economy. Aware that the 2018-2021 action plan did not specify which sectors would benefit, this time workplan singles out sectors to benefit from China’s partnership.

Also, in this workplan, Beijing earmarked $10 of her International Monterey Fund (IMF) drawing rights share to assist development in African countries, $10 billion will go to supporting trade with aim of boosting African countries exports to China a development expected to increase volume of China’s imports from African countries to a whopping $300 billion while $10 billion has been set aside to facilitate credit lines to African financial institutions to be accessed by several African countries.

Considering effects of covid-19 pandemic on global economy which saw major economies growth reduce with China’s growing at 2.3% in 2020 which is the lowest since 1976, China committing $40bn to African countries is evidence of China’s commitment to support her allies.

Fighting Covid-19 Pandemic Together.

The 2021 FOCAC ministerial came at a time when the world is battling Covid-19 – the worst pandemic of our times which has devastated the world for two years and its defeat remains elusive, with over 326-million people infected, and claimed lives of over 5.54 million people.

In all this uncertainty, using their financial muscle, Western Countries chose vaccine nationalism-buying almost all produced vaccines on markets, and leaving poor and developing countries especially in Africa with less no vaccines, putting the continent far from the needed 60% vaccination for its population needed for herd immunity. Even with Covax facility, today, only 14% of African countries have vaccinated their citizens, 76% in Canada and the U.S.A, 66% in Europe, 72% Asian Pacific, 72% Latin America and 51% in Middle East.

However, as developed countries hoarded vaccines, working with African countries, China organized a novel extraordinary China-Africa summit to devise means of containing the pandemic. Consequently, China and African countries have been working together in fighting the pandemic by donating thousands of tonnes of materials required in fighting covid-19 which include facemasks, ventilators, testing kits, ventilators, financial assistance and sending experts to work with African counterparts among others. China has also worked with some African countries like Morocco and Egypt to locally produce Covid-19 vaccines.

Addressing the 2021 FOCAC ministerial conference, President Xi Jinping announced China will supply one billion vaccines to African countries of which 600 million will come as donations while 400 million doses will be produced locally through joint vaccine production arrangement between China and African countries. It is important to note that Morocco have already started producing vaccines with support from a Chinse pharmaceutical firm Sinopharm. President Xi’s promised 1 billion vaccines to Africa is enough to vaccinate 40% of continent’s population which will be a big boost. If fully implemented, this will be the largest bilateral vaccine support to African countries if compared with U.S.A’s. 500million vaccine pledges promised to poor and developing countries world over.

While China’s critics accuse Beijing of the so-called Vaccine Diplomacy, arguably, to compare China’s assistance to African countries in building a functioning health system with politics is an insult to Africans and ignorance of facts like African countries’ need in building a robust public health system that will be able to withstand any future pandemics. This is what China is doing. The construction of the Headquarters Building Phase I Project of the Africa Centers for Disease Control and Prevention (Africa CDC) funded by China is ongoing in Addis Ababa, Ethiopia.

Revolutionizing digital economy and green development

The 2022-2024 action plan for China-Africa cooperation also points at digital and green economy. To show emphasis, digital economy is presented as an independent subsection under economic cooperation and green development is presented in its section signifying China’s commitment to support African countries in the two sectors.

Aware that digital revolution is the way to go, China and African countries have come up an initiative to work together and jointly build a China-Africa Community with a shared future in Cyberspace, a development that will see both sides working together in areas like artificial intelligence, big data internet, mobile internet, cloud computing, among others. In Uganda for example, Huawei is already implementing this program and hence, supporting African countries technological transfer, digital infrastructure and digital innovation.

In green development, focus is given to ecological and climate change mitigation which can be achieved through clean energy which China is supporting in Africa. This initiative is spot-on for one can argue that it directly responds to China’s critics who often claim that China does not consider environmental issues when supporting developmental projects in Africa.

All in all, China-Africa cooperation if measured from the success of FOCAC, in its 21 years, the cooperation has achieved a lot for the African countries and much more is in pipeline! Going by commitments released by Chinese government in its FOCAC whitepaper of November 26th 2021, China is ready to double down her support to African countries to realise a China-Africa Community with a shared future. From 2022-2024, FOCAC’s focus will be on cooperation like digital economy, health, poverty reduction, green development, capacity building, peace and security, promotion of trade, among others. One can therefore confidently argue that China is and continue to be Africa’s desired development partner.

However, African countries should not just sit and wait to be spoon-fed, they must be pro-active and use the opportunity of China’s willingness to work with them as “equal partners” so as to further gain from Beijing. As of today, despite having FOCAC in place, there seems not to be a coordinated engagement with China with no single African country having a clear “China strategy.”  As of today, China has released comprehensive three Africa policy papers since 2006 yet, despite having many experts on China including thousands with highest education thanks to Chinese government scholarships, there no single policy paper on China has been developed by Africa as a continent either under the African Union or even FOCAC.

 

Allawi Ssemanda is Executive Director Development Watch Centre; a Foreign Policy think

tank.

Ambassador Zhang Lizhong Remarks at the FOCAC and CPC Briefing in Kampala.

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The Eighth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) will be held on November 29 and 30 in Dakar, the capital of Senegal, the current African co-chair of FOCAC. With the theme of “Deepen China-Africa Partnership and Promote Sustainable Development to Build a China-Africa Community with a Shared Future in the New Era”, the Conference will review and assess the follow-up implementation of the outcomes of the 2018 FOCAC Beijing Summit as well as the joint China-Africa response to COVID-19, and chart the course for China-Africa relations for the next three years and more to come.

The Conference is scheduled to adopt four documents: Dakar Declaration of the Eighth Ministerial Conference of FOCAC, FOCAC Dakar Action Plan (2022-2024), 2035 Vision for China-Africa Cooperation and China-Africa Declaration on Climate Change. Furthermore, the Seventh China-Africa Business Conference will take place in parallel with the Ministerial Conference.

Since its establishment in 2000, FOCAC has upheld the principle of extensive consultations, joint contributions and shared benefits, and become a forum featuring equality, practicality and efficiency. China-Africa cooperation under the framework of FOCAC has achieved remarkable and striking results, winning widespread welcome from the African people and high appraisal from the international community. FOCAC is an important platform for collective dialogue and effective mechanism for practical cooperation between China and Africa. FOCAC has spearheaded international cooperation with Africa and become a golden brand for South-South cooperation.

For the 21 years since the establishment of the FOCAC, trade between China and Africa and China’s investment in Africa have expanded by 20-fold and 100-fold, respectively. China has built and is building in Africa more than 10,000 kilometers of railway lines, nearly 10,000 kilometers of roads, 120,000 megawatt of power-generating capacity, 150 kilometers of backbone network lines, over 400 medical facilities, 1200-plus educational institution, and 400,000 tons of annual clean water treatment capacity, creating over 4.5 million employment opportunities in Africa.

In Uganda, while maintaining a good job in pandemic control and encouraged by the Ugandan government, Chinese companies have contributed to local social-economic transformation and development by carrying forward a number of major projects, such as the construction of the Karuma Hydropower Plant and the expansion of the Entebbe International Airport, which, combined other recently completed infrastructure projects such as KE Expressway and Isimba Hydropower Plant, will lay a solid foundation for Uganda’s future economic and social development.

Despite the COVID-19 pandemic, China has remained Africa’s largest trading partner for 12 consecutive years. In the first nine months of 2021, the bilateral trade volume between China and Africa reached a record of $185.2 billion, up by 38.2% year on year. In the first eight months of 2021, the bilateral trade volume between China and Uganda reached $619 million, up by 26.2%. China welcomes the exports of Uganda’s products into the Chinese market and hopes Uganda will fully utilize the 97% products tariff-free treatment granted by China to expand its exports. We also encouraged Uganda to take an active part in the China International Import Expo, the China-Africa Economic and Trade Expo and other Expos activities so as to promote Ugandan’s products.

In the first nine months of 2021, China’s direct investment to Africa across all sectors registered $2.59 billion, an increase of 9.9% year on year, which outpaced China’s overall outbound direct investment by 3% and exceeded the pre-pandemic level in 2019. By the end of 2020, the stock of non-financial direct investment in Uganda has reached $1.07 billion. A number of industrial parks in Uganda invested and built by Chinese enterprises have become highlights of the economic and trade cooperation between our two countries. Earlier this year, CNOOC has made the final investment decision (FID) in Uganda’s oil industry, which will be another big boost to Uganda’s economic development.

Solidarity and cooperation are the most powerful weapon to defeat COVID-19, and the sunshine of cooperation will surely dispel the haze of the pandemic. Since the outbreak of the pandemic, in response to African needs, China has urgently provided various kinds of assistance including materials, vaccines and expert teams to 53 African countries and the African Union. China-Africa economic and trade cooperation and our solidarity provide strong support to economic reopening and recovery in Africa.

China firmly supports Uganda to fight against the COVID-19 pandemic. The Chinese government has donated 1 million doses of Sinovac vaccines and over 50,000 units of testing kits to Uganda, and is working with Uganda on delivering the third batch of 600,000 doses. Chinese medical team stationing in China-Uganda Hospital has been making its contributions by sharing anti-pandemic experiences with its Ugandan colleagues.

The upcoming Eighth Ministerial Conference of FOCAC will stand on the new developments, new imperatives and new opportunities and upgrade our cooperation. The Conference will focus on cooperation areas such as health, industrial capacity, regional connectivity, agricultural, digital sector, environmental, military and security, personnel and skills training. It will announce corresponding pragmatic cooperation actions in this regard.

The world is now experiencing major changes unseen in a century. As COVID-19 accelerates these major changes, the world has entered a new period of turbulence and transformation. The fact that China and Africa will hold the Conference as scheduled under COVID-19 is of great significance itself. First, it reflects the mutual trust, solidarity and support between the world’s largest developing country and the continent with the biggest number of developing countries. Second, it demonstrates our determination, courage and commitment to jointly answer the questions of the times and respond to the changes in the world. Third, all 55 FOCAC members will overcome difficulties to gather together and discuss plans for friendly cooperation and draw a new blueprint for future cooperation. This will inject new impetus into the China-Africa comprehensive strategic and cooperative partnership and make new contributions to upholding the overall interests of developing countries and advancing world peace, stability, development and prosperity in a post-COVID era.

The 19th CPC Central Committee convened its sixth plenary session in Beijing from Nov. 8 to 11, 2021. This was an important meeting as the Party celebrates its centenary this year and stands at a critical juncture where the time frames of its two centenary goals converge. The session has adopted one important resolution and one important decision.

The most important outcome of the session is its adoption of the Resolution of the CPC Central Committee on the Major Achievements and Historical Experience of the Party over the Past Century.

In the history of the CPC, the CPC has always attached great importance to reviewing historical experiences. The resolution adopted at the plenary session becomes the third relevant resolution on the party historical issues in the CPC one- hundred-year history.

The resolution adopted at the plenary session detailed the struggle, sacrifice, and creations made by the CPC as it stays committed to its mission of seeking happiness for the Chinese people and rejuvenation for the Chinese nation, and answers the question of “why we were successful in the past and how we can continue to succeed in the future.” Therefore, we believe this plenary session will have a significant and far-reaching impact on promoting the unity of thought, will, and action of the whole Party, uniting and leading the Chinese people of all ethnic groups to learn from history and create the future, and better adhere to and develop socialism with Chinese characteristics in the new era.

The resolution stressed that practice has proven that establishing Comrade Xi Jinping’s core position on the Party Central Committee and in the Party as a whole and defining the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era reflect the common will of the Party, the armed forces, and the Chinese people of all ethnic groups, and are of decisive significance for advancing the cause of the Party and the country in the new era and for driving forward the historic process of national rejuvenation.

At the plenary session, the CPC decided to convene its 20th National Congress in Beijing in the second half of 2022. The congress will be held at a critical time when the Party has embarked on a new journey to build a modern socialist country in all respects and to realize the second centenary goal. Therefore, it will be a crucial meeting and an event of great political significance for both the Party and the country.

China and Uganda are good comrades, good friends, good partners and good brother. Our two countries have a very long history of solidarity, friendship and cooperation. Since our two countries established diplomatic relations in 1962, and especially since our relations were elevated by President Xi Jinping and President Museveni to the level of Comprehensive Cooperative Partnership in 2019, we have overcome all sorts of challenges, including changes in international situation and the COVID-19 pandemic, to continuously consolidate and enhance our relations. Our political mutual trust has been ever growing, with our pragmatic cooperation in all fields developing substantially and continuously, our people-to-people exchange booming with colors, and our two countries maintaining close coordination and collaboration in international and regional affairs, bringing more and more tangible benefits to the two countries and peoples. One of the important reasons that our bilateral relations keep moving forward with momentum is that the ruling parties of our two countries, the CPC and the NRM, have been strengthening cooperation and mutual learning in state governance and party building.

At present, China-Uganda relations are at their best in history and lays a solid foundation for future development. China is pursuing New Development paradigm and high quality development. Under New Development paradigm, China gives more priority to expanding the domestic needs, and stresses common prosperity of the people, indicating the existing 400 million middle-income population will continue to expand and provide more market opportunities to other countries. Uganda is implementing import substitution strategy and industrialization. Recent development proves the two countries can achieve greater common development and mutual benefits through close cooperation and synergy of each others’ development strategies.

For future cooperation between the two countries, we need to strive for the transformation and upgrading of bilateral cooperation and improving the efficiency and quality. We need to identify key areas of cooperation and take join actions. These key areas could be poverty reduction, food security, COVID-19 response and vaccines, investment and trade, industrialization, connectivity, climate changes, digital innovation and human resources, to name a few. Not long ago, China has proposed China-Africa Digital Innovation Initiative and aims to promote cooperation in digital economy, digital infrastructure, digital education, digital inclusiveness and digital security. We are looking forward to implementing the initiative with the Uganda side. We need to encourage private companies to play bigger role through policy coordination and upgrade the cooperation on industrialization parks and other sectors. Private companies are big in numbers and the backbone of direct investment to Africa countries. The Dakar Conference will provide new opportunities for private companies to expand cooperation in Africa.

Next year in 2022, our two countries will celebrate the 60th anniversary of the establishment of our bilateral relations, the CPC will convene its 20th National Congress, the NRM and the Ugandan government will celebrate the 60th anniversary of the Republic of Uganda as they strive for national building in such a crucial year. On the new historical starting point, the CPC will work with the NRM and Ugandan people even harder as a whole in our joint efforts to achieve mutual development and prosperity, to leverage our respective strength in building an even closer China-Uganda community with a shared future, and to jointly promote China-Uganda Comprehensive Cooperative Partnership to new heights!

 

Thank you!

Africa’s friendship for China goes beyond economic and development cooperation.

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By Azhar Azam

The Africa-China cooperation is described as a relationship between two partners in which Africa wants to gain from China’s development model and circumvent western pressure, to make political and economic reforms such as infamous structural adjustment, through Chinese soft lending and unconditional access to expertise.

China is a most reliable African ally and perhaps the only major economy never intended to colonize the continent. South African President Cyril Ramaphosa at the Forum on China-Africa Cooperation (FOCAC) in September 2018 defended Chinese involvement and refuted the western view that a new colonialism was taking hold in Africa.

The pandemic was expected to threaten the 30-plus year tradition during which every Chinese foreign minister kicked off the New Year from his visit to Africa but the virus couldn’t affect the unshakable friendship as Wang Yi successfully completed his first overseas tour in 2021 to Nigeria, the Democratic Republic of Congo (DRC), Botswana, Tanzania and Seychelles.

Since the first triennial FOCAC summit, two sides have closely worked together and delivered more than 70 percent outcomes on all eight major initiatives including industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, healthcare, people-to-people exchange and peace and security.

In the throes of global pandemic, Chinese Belt and Road Initiative (BRI) is maintaining its momentum as more than 1,100 cooperation projects are going on seamlessly in Africa with about 100,000 Chinese technicians and engineers constantly giving their valuable contributions to improve the economic and social well-being of African communities.

The world’s second-largest economy hasn’t dithered to extend its steadfast support to help Africa mitigate a hard set of economic, infrastructure, poverty and security challenges. In addition to this, the association between the two ancient civilizations is so comprehensive and deep that every new concept only reinvigorates the already strengthened bilateral ties.

Besides opening a number of Confucius Institutes and establishing 150 pairs of sister cities in Africa to enhance the people-to-people ties, China has funded construction of soccer stadiums and government buildings in at least eight African countries to promote sporting and cultural activities and enrich African’s cultural life.

While progress on wide-reaching, public-oriented and eco-friendly projects will spread infrastructure networks, uplift trade, alleviate environmental risks and encourage more locally based industrial operations – Chinese efforts to engage African people in artistic and recreational events would buff up their hidden creative potential and add another dimension to reinvigorate an ever-growing relationship.

Between 2013 and 2018, the proportion of Chinese aid to Africa had increased to 47 percent from 36 percent in 2010-12. David Shinn, a professor at Elliot’s School of International Affairs at George Washington University, reckoned that Africa is now receiving $3.3 billion a year from China on account of foreign aid as compared to $2.5 billion previously.

The robust increase in foreign aid reflected China was regularly sharing the achievements of its economic growth and benefits of transition from low- to middle-income group with African people. It also reaffirmed that the long geographical distance could not restrict the intimate connection from transcending to the micro levels.

Aerial-photo-shows-the-Mazeras-Bridge-of-the-Mombasa-Nairobi-standard-gauge-railway-in-Kenya-May-12-2017.-Photo -Xinhua

Out of some 42 countries that have started rolling out coronavirus vaccines, no one is from low-income states. As rich nations have taken complete control of the entire vaccine supply chain, billions of high-risk people in the developing world, with almost the entire Africa comprising over 50 nations, could be left out until next year.

Amid selfish gestures of wealthy countries to hoard vaccines for their citizens, China is building a COVID-19 vaccine delivery conduit to immunize Africa with a cold-chain air bridge from Shenzhen to a logistical hub in Addis Ababa with manufacturing capabilities in Egypt and Morocco. The big courtesy will win over African hearts and further elevate China’s standing in the continent.

Western media casts doubts on a promise made by China to provide vaccines to Africa on priority basis. The biased approach would take a dive as Egypt has already obtained the first batch of China’s Sinopharm vaccine on December 10 and Morocco received it on January 27 after Moroccan authorities found the Chinese vaccine complied with “international standards of quality and health safety.”

The seven consensuses Abuja and Beijing reached seven consensuses during Wang’s visit to Africa will promote bilateral cooperation on green and digital economy apart from accelerating Nigerian industrialization and improving independent development capabilities under BRI framework. The adoption of technology and clean economic expansion will reduce unemployment and poverty – key drivers fueling cultism, farming conflicts, kidnapping, banditry and violent extremism in Nigeria.

Green environmental protection, Blue Ocean and tourism are the three key areas China is willing to enhance collaboration with Seychelles. Beijing’s support to cope with climate change, pledge to encourage Chinese tourists to visit the small African island and cooperation in the fields of seafood farming, maritime scientific research and shipping transportation will diversify the heavily tourism-reliant economy.

On debt relief, China has signed debt service suspension agreements with 12 African countries and waived off the matured interest-free loans for 15 continental nations through the G-20 Debt Service Suspension Initiative. While Beijing looks to widen the scope to other African countries to ease their debt crisis, the signing-up of the DRC and Botswana as 45th and 46th BRI partners will allow them to become part of a great clean-and-green development and modernization process.

The bottom line is that it’s not just Chinese financing, infrastructure development, trade boosting and industrialization efforts, which have charmed and fascinated the African governments and people to fall in love with China. Beijing has earned this honor through its understanding of Africa’s priorities, respect for African culture, care of the continent’s environment and people’s health and decades of untiring unwavering support for the continent.

Azhar Azam works in a private organization as market and business analyst and writes about geopolitical issues and regional conflicts. Views here represent author’s not necessarily DWC.

 

Covid-19 Challenges: Will China’s Debt Relief to Africa Work?

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By Allawi Ssemanda

As a result of restless calls for debt relief for African countries due to the inevitable economic meltdown brought about by Covid-19, China’s Debt relief plan for Africa is steadily emerging. It is believed that China is Africa’s Largest single – country creditor and therefore had to lead efforts in discussing debt relief for the continent.

Whereas key questions regarding implementation plans remain unclear, arguably, issues raised bellow present a fair overview of the Chinese plan.

Beijing’s Official Frameworks for Debt Relief.

Recently, officials in Chinese government have made two clear commitment regarding the debt relief debate. The first commitment came during the Group of 20 (G-20) where debt service suspension initiative for the heavily indebted or poorest countries was reached after discussion of finance ministers and Central bank governors. It was after this agreement that China’s Foreign Affairs Ministry observed how G-20 including China agreed to suspend repayment of both principal and interest effective May 1st 2020 until the end of the year, 2020. Under this arrangement, debt service payments owed by the 76 International Development Association (IDA) countries, plus Angola including 40 Sub-Saharan African Countries is suspended.

Beijing’s second commitment came from president Xi Jinping during a virtual event on 18th May 2020 at opening of the 73rd World Health Assembly where he promised $2 billion to help developing countries affected by Covid-19. During the event, president Xi committed that; “China will provide $2 billion over two years to help with Covid-19 response and with the economic and development in affected countries, especially developing countries.

A closer analysis of diction in Chinese version is categorical that such donation will be made from the category of International Assistance. Put differently, it will come from China’s Foreign Aid Budget.

It can be argued that because Beijing designated $2 billion to help developing countries respond to Covid-19 and address its effects on social and economic development in affected countries, China leaves an open door for such allocation to be earmarked toward debt relief. With China’s approach towards bilateral economic and social development, conclusion can be made that such assistance will take bilateral approach. This was evident as was affirmed by China’s Foreign Minister, Wang Yi, during a press conference on May 24th stressing that China will ensure debt relief for African countries in two ways: bilateral approach and the G-20 debt payment suspension Initiative. This was re-emphasized as on June 7th during the launching of the white paper entitled “Fighting Covid-19: China’s Action” with China’s Foreign Ministry emphasizing

that the $2 billion donation earmarked by China to support African countries will be dispensed through bilateral and multilateral means and will help address challenges such as poverty alleviation, public health and supporting economic recovery.

 

Does G-20 Initiative Cover Concessional Loans?

 

Discussing China’s debt relief for African countries without answering the question of concession loans leaves the discussion incomplete. Despite taking a lion’s share of China’s lending to African countries in the last two decades, as a result of their commercial nature commercial loans are not covered under this initiative.

A review of China-Africa Cooperation (FOCAC) financial commitments confirms this. According to Beijing’s 2006 FOCAC pledges, 50% of this funding is concessional in nature with concessional loans at $3 billion while concessional buyer’s credit was $2 billion. The 2009 FACOC pledges the $10 billion commitment China offered was concessional loan. This was actually 10 times bigger than special loans extended to Africa’s small and mid-sized enterprises. For 2012 FACOC financial pledges concessional loans totalled $20 billion which more than 50%. In 2015 concessional loans and exports buyers’ credit was $35 billion making it to about 60% of the total $60 billion committed. In 2018,there was a great shift with concessional loans dropping. Grants, zero interest loans and concessional loans all added to 25% of the $60 China committed to African countries.

With that background, the G-20 agreement as it is now is arguably inform of a pause or standstill not a cancellation of debts. However, this standstill is meant to help African countries time to be able to stand economically and meet their obligations. Further, observers agree that this kind of standstill will apply to concessional loans. Important to note is that the G-20 agreement again, to a pause or standstill, not a cancellation – as it is as of now is applicable for eight months starting from 1st May, 2020 till 31st December, 2020.

It can be argued that with the already devastating economic and health impact Covid-19 pandemic has caused, African countries still need a long debt relief beyond the one negotiated by G-20. This to happen means new negotiations which must look at factors such as resumption of African economies and addressing continued health and economic impact of this pandemic coupled with matching relief efforts by both multilateral creditors and private creditors so as to realise a holistic solution. In other words, the G-20 debt relief frame work which is equivalent to 8 Months suspension of debt repayment period is not long enough. Put differently, broader, bigger and long-term debt relief is not yet on table.

What does President Xi’s Speech mean for African Countries?

On 17th June, 2020, Africa and China held a much-needed China-Africa Extraordinary Summit. The summit was chaired by China and Senegal (in its capacity as co-host of the Forum on China-Africa Co-operation – FOCA), and South Africa (as the current chair of the African Union). Dr Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization (WHO) also attended.

In his address, president Xi pledged that China will stand shoulder to shoulder with African countries stressing that; “Let me reaffirm China’s commitment to its longstanding friendship with Africa. No matter how the international landscape may evolve, China shall never waver in its determination to pursue greater solidarity and cooperation with Africa.” 

During this summit, Chinese President Xi Jinping promised that China will continue helping African countries with equipments needed to contain the spread of Covid-19. Another great gesture was President Xi’s promise which re-emphasized the point that China will waive some debt from African countries due this year, and also restructure time frames for repayment from some countries. Such promises are not new, indeed, in 2015, 2018 and 2019, China wrote-off debts on a number of African countries

China’s promise to fund Africa’s Centre for Disease Control (CDC) in Ethiopia’s capital Addis Ababa as was announced by African Union Commission in many ways shades light of how Beijing is committed to strengthening China – Africa relationship.

Despite a few unresolved questions on the project; such as time frame of proposed CDC and the site, China’s pronouncement that Beijing is ready to fund the centre is enough to further describe Sino-Africa Relations as one of mutual benefit, respect and presents China as a true and reliable ally.

There is no doubt that the decision by Washington to withdraw financial support for World Health Organization at this critical time makes their work difficult, leaving negative consequences especially on regions like Africa which are arguably not fully self-reliant to singly deal with Covid-19.

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