As African leaders convene in Beijing, the focus is on securing funds for major infrastructure projects, but economic challenges and geopolitical tensions complicate the landscape.
This week, Beijing is hosting a major forum with African leaders as they aim to secure substantial loans and investments for critical infrastructure projects. The China-Africa forum, touted as China’s largest diplomatic event since the COVID-19 pandemic, will see prominent figures from South Africa, Nigeria, Kenya, and other nations seeking to bolster ties with the world’s No. 2 economy.
China’s engagement with Africa has expanded significantly over the past decade, with billions in loans fueling infrastructure projects across the continent. These projects, which include railways, ports, and hydroelectric plants, are part of China’s Belt and Road Initiative (BRI), a central element of President Xi Jinping’s strategy to extend China’s global influence.
While China remains Africa’s largest trading partner, with bilateral trade reaching $167.8 billion in the first half of 2024, there are signs that the economic landscape is shifting. Analysts highlight that China’s economic slowdown has made Beijing more cautious about extending large loans. This caution is compounded by Beijing’s reluctance to offer debt relief, even as some African nations struggle with significant debt burdens that have forced them to cut spending on essential services.
According to research from the Chinese Loans to Africa Database, China’s lending to African nations last year was the highest in five years, with Angola, Ethiopia, Egypt, Nigeria, and Kenya being the top borrowers. However, the “old model” of rapid industrialization through large loans is increasingly viewed as unsustainable amid changing global conditions, including the lingering effects of COVID-19 and rising geopolitical tensions.
One prominent example of the challenges facing African nations is Kenya’s $5 billion railway project funded by China’s Exim Bank, which was intended to connect Nairobi with Mombasa. A proposed extension to Uganda never materialized due to debt repayment issues, leaving Kenya with over $8 billion owed to China. Recent protests in Kenya have been partly driven by the government’s struggle to manage its debt burden.
African leaders at this week’s forum are expected to advocate not only for new investments but also for more favorable loan terms to address such debt-related challenges. The conversation is likely to focus on how to balance the benefits of Chinese investment with the risks of accumulating unsustainable debt.
In addition to infrastructure, African nations are crucial in the global race for rare minerals, with significant deposits of manganese, cobalt, nickel, and lithium essential for renewable energy technologies. Central Africa, particularly the Democratic Republic of Congo, dominates cobalt mining, while South Africa leads in manganese production. China’s dominance in processing these minerals further intensifies the competition for these resources.
The geopolitical tension between the U.S. and China is also impacting Africa. Washington has expressed concerns about Beijing’s influence, accusing China of pursuing its commercial and geopolitical interests at the expense of transparency. Despite China’s insistence on “win-win” cooperation, analysts worry that African countries might face pressure to align with one of the great powers.
The lack of leverage among African nations in negotiating with major powers like China and the U.S. poses a significant challenge. As Ovigwe Eguegu of Development Reimagined notes, the idea of balancing U.S. influence against China’s is not a feasible strategy for many African countries.
The outcomes of this week’s forum will be closely watched for signs of how Africa will navigate its partnerships with global powers amidst ongoing economic and geopolitical shifts.
