30 April 2019

Africa: Insiders Insight - It's Belt and Road Season


It's Belt and Road season

The essentials: China held its annual Belt and Road forum at the end of last week. While perhaps not everyone on the continent was talking about the event, elites certainly were as African nations try to balance desire for additional Chinese investments with concerns about mounting debt.

The context: China has used its Belt and Road Initiative (BRI), a development strategy, to drive investments on the African continent. Beijing's promise of significant investments in infrastructure coupled with no human rights conditions has been appealing to some African leaders. But with payments mounting, those investments are no longer looking like such a good deal.

Leaders from Kenya, Ethiopia, Djibouti and Mozambique travelled to this year's forum both to discuss new projects and revisit payments on old ones.

The good: Though there is some scepticism about what exactly China is attempting to accomplish with the BRI, there is no doubt that it has deepened ties between Beijing and capitals across the African continent. The Chinese now wield significant influence, which may be useful in myriad scenarios - from securing access to minerals to shipping rights to favourable votes at the United Nations.

And for African nations, it has unlocked capital to fund major infrastructural projects that would otherwise not have been available.

The bad: At the same time, there are concerns that it has locked those countries into a debt trap that it will be difficult to escape.

The future: China has shown some willingness to renegotiate loans. The question will be how aggressive African countries are in trying to revisit the terms of their borrowing and how much more debt they are willing to take on to keep the continental construction boom going.

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