A fowler needs to tactfully mask their baits and ruses before advancing on its hunt. Accordingly, China has devised its Belt & Road Initiative (BRI) to mask its baits & ruses to economically entrap other economies, especially the underdeveloped ones. While BRI apparently aims at improving connectivity for enhancing trade and investment, underlying in the initiative is China’s strategic designs of an economic warfare to become a global power. There is a Chinese proverb “Bῑng zhě, guῑdào yě.” that means “all warfare is based on deception”. In the letter & spirit of the proverb, China feels no shame in deceiving the weaker economies to prey them over through its financial incursions. The underprivileged African economies proffer easy targets for China, given their desperate financial needs and China’s deep pocket.
China has been generously providing developmental finance to the African countries, which are in general unable to get foreign funds from other sources due to their poor credit ratings. Of the total 54 African countries, China has already signed MoUs with 49 nations for construction of the BRI projects and further making efforts to include the remaining five African countries (Eritrea, Benin, Mali, Sao Tome & Principe, and Swaziland) into its BRI umbrella. Sao Tome & Principe has already shown its inclination towards China, when it switched its allegiance from Taiwan to China by accepting the “one-China policy” in May 2017. China has also signed the MoU for BRI cooperation with African Union.
China provides hassle-free financing to the high credit-risk economies, as it sees country’s inability to repay as an opportunity to fortify its own dominance. China’s ‘easy money’ is its bait and its typically vague articulation of the financial accords is its ruse. Once the recipient country defaults on repayments, it uses the blurry terms of agreement for economic takeovers. China has so far provided an estimated $143 billion worth loan to the African countries since 2000, making it Africa’s largest bilateral creditor. Out of the total amount, more than half of the loans have been given post-2013 under the ambit of BRI. In 2018, China had offered $60 billion as development assistance to African nations until 2021, during the ‘Forum for China-Africa Cooperation’ held in Beijing. In July 2019, Beijing further announced a $1 billion Belt & Road Africa infrastructure development fund.
Although, China’s BRI projects have helped the beneficiary countries to develop their road-rail infrastructure, energy production & transmission, especially hydro and thermal power, it has also pushed them to the edge of falling into Chinese debt trap. Kenya owes 72 percent of its external debt to China, and around $60 billion is expected to be repaid over the next three years to China Exim Bank alone. This is indicative of vulnerability of the country as well as China’s prospective control over its financial situation and thereby capacity to influence its political ground as well. Ultimately, it would end-up with China challenging sovereignty of the debt-ridden African nation. In the past, China has used failure on repayments to acquire lands and production rights. Angola and Sri Lanka are the recent examples.
Similarly, Chinese financial assistance provided to Djibouti constitutes around 75 percent of its GDP. During the past two years, Djibouti’s debt to GDP ratio has skyrocketed from 50 percent to 85 percent, which is the highest for any low-income country. Most of the Chinese debt to the country consists of government-guaranteed public enterprise debt and is owed to the China Exim Bank. It has also provided funds for 14 infrastructure projects in Ivory Coast, besides several development projects in Nigeria, Uganda, Tanzania, Ghana and Madagascar.
China has also been continuing with its economic foray in non-BRI countries in the region. It has signed $11 billion worth financial agreements with Mali for two cross-country railway projects intended to link the landlocked country to the coast. Benin and Sao Tome & Principe have also received considerable amount of financial assistance from China.
China’s investments have particularly gone into construction of ports and port-related projects, accounting for around 45 percent of Chinese investments in Africa under the BRI. Some of the BRI-linked China-backed ports in the region include Doraleh Port (Djibouti), Port Sudan (Sudan), Port Said-Port Tewfik (Egypt), Port Ain Sokhna (Egypt), Zarzis Port (Tunisia) and El Hamdania Port (Algeria). China has also built its first overseas military base in Djibouti, operational since 2017. This indicates that China would be leveraging its influence over these ports for both economic (transport of raw materials, finished goods and labour) as well as military (surveillance and blockade of overseas and deep-sea maritime traffic) purposes in the future to serve its strategic interests.
China’s interest in African nations is obvious due to the rich natural resources available in the region, such as platinum, cobalt, manganese and uranium. China has also notably invested in energy related projects in the region, besides exploration of mineral reserves. Chinese investments in energy and mining projects in African countries cumulatively comprise of around 25 percent of its total investments in the region. In addition, abundance of fertile land in the region also provides China with opportunity to acquire agricultural plots to ensure its own food security, which recently came under stress. Africa not only presents an opening for Chinese companies in the agricultural sector to grow food in Africa and send them back to China, it would also facilitate Chinese authorities to accommodate the displaced Chinese farmers. China has already started to invest in farming and livestock breeding sector in various African countries such as Mozambique, Nigeria and Zimbabwe.
However, there have also been several instances of popular protests against the Chinese projects in various African nations. In Nigeria, China-backed Lagos-lbadan Railway Line project witnessed protests from the locals over lack of compensation for displacing them by demolishing their houses to undertake the project. In Uganda, local traders protested against setting up of small trade businesses by the Chinese people which resulted into loss of jobs for the local population. In Madagascar, locals started protesting after their land was affected, and demolition of a church and a school was proposed to accommodate mining activities by Chinese enterprise Jiuxing Mines. In Cameroon, local protests erupted over demolition of houses for constructing the Kribi Deep-sea Port and lack of due compensation for the displaced. In Chad, residents have protested against Chinese presence, which is accompanied by few jobs, low pay and harsh working conditions. Ghanaian fishing community has complained that 90 percent of its fleet is now owned by Chinese entities, which operate using these Ghanaian fronts to circumvent a local law that forbids foreign companies from operating in Ghana’s fishing industry.
Moreover, some of the BRI projects in African countries have also witnessed cancellation or postponement by the respective governments owing to various reasons. Tanzanian President cancelled construction of the Bagamoyo Port and an attached industrial zone project in April 2020 over corruption issues. Zambian government revoked operating licence of a Chinese company for coal mines in February 2018 due to poor safety and environmental compliance. In August 2018, Chad government shut down operations of China National Petroleum Corporation after discovering illegitimate excess crude oil dumping by the company. Ugandan government postponed construction of Kampala-Entebbe Expressway over concerns of debt trap. Sierra Leone government also cancelled the $318 million Mamamah International Airport Project in October 2018 over debt related concerns. Gabon government withdrew oil exploration permit from Addax, a subsidiary of China-owned Sinopec, citing environmental missteps and irregularities in paperwork.
These public resentments and especially cancellation of Chinese projects indicate that they have gradually started to decipher the nefarious designs of Chinese baits & ruses under the guise of BRI. It is time for all the African nations to stand together to pre-empt a prospective economic takeover by the Chinese. It is only in unity that the birds could break away from the baits & ruses of the fowler. In the mean time, the global bigwigs should also come forward to lend a helping hand to the feeble economies of these African countries, without which China would keep leveraging the financial void in these nations to further its twisted interests.
(The writer is Chairman of Delhi-based Law and Society Alliance, a think-tank, and editor of Defence Capital, a strategic affairs and military matters magazine)
