Connectivity the key to growth

China’s infrastructure footprint on the African continent has awakened a new wave of Afro-realism among the local political elites, writes Funeka Yazini April.

#Focac: According to the African Union’s Agenda 2063 Chapter 3, the key challenge impacting continental development is infrastructure. The lack of infrastructure remains a primary constraint to interconnectedness, especially railways which are a common and cheap form of transportation elsewhere in the developing world.

In the decades since African countries achieved their independence, many governments sought to build on the meagre infrastructure left by the departing colonial powers. However, those efforts were hampered by weak planning and management capacity, inadequate financing, corruption and a lack of integrated regional and transcontinental planning and co-operation. Poor maintenance has left much existing infrastructure in disrepair, particularly in rural areas.

Based on assessments of Africa’s infrastructure done in 2012 by the African Development Bank, less than a third of sub-Saharan Africans have electricity, only 56 percent drink clean water, barely a third of rural Africans live near a road, there are less than a quarter of paved roads per kilometre than other developing regions, just four percent of Africa’s farmland is irrigated, and over 60 percent of the population lacks basic sanitation facilities.

According to the World Bank’s claim, Africa’s infrastructure funding gap is $93 billion per year until 2020, and 40 percent of this is for power needs. Of this total, about $66bn per year represents Sub-Saharan Africa’s funding gap until 2020. Basically, apart from a small lead on South Asia in mobile phone adoption and internet access, Africa trails the rest of the developing world in every infrastructure sector.

On January 2015, Nkosazana Dlamini-Zuma, Chairperson of the African Union (AU) Commission, and Zhang Ming, special envoy and Vice Foreign Minister of the People’s Republic of China, signed a memorandum of understanding (MOU) to co-operate on continental infrastructural development and industrialisation. Based on the Africa-China MOU, the key focus of infrastructural development is transport, high speed railway, aviation, and road highways.

China has also introduced the “One Belt One Road” (OBOR), which is centred on infrastructure development, especially regional transportation and connectivity projects. The OBOR is China’s national development strategy which encompasses two development plans: the New Silk Road Economic Belt, which will link China with Europe through Central and Western Asia, and the 21st Century Maritime Silk Road, which will connect China with Southeast Asia, the Middle East, Europe and Africa, through Kenya.

Justin Yifu Lin argues that through the OBOR infrastructure development strategy, China could both foster the growth of African countries, and transfer its labour-intensive industries to Africa.

The MOU between China and the African Union, along with the OBOR plan comes against the backdrop of China being by far the most promising source of funds for Africa’s infrastructure. China’s infrastructure development in Africa mushroomed after the establishment of the Forum for Co-operation between China and Africa (Focac) in 2000.

Focac is China’s most prominent development initiative, and has since 2000 organised high-level meetings every three years with African governments. Commitments were made to increase the China-Africa Development Fund, which then stood at $1bn, to $3bn; to assist in raising the value add of the energy and resource products of African countries, and promoting infrastructural development.

As of 2005 to 2011, China’s commitments to infrastructure in Africa rose from $1bn annually to $1.5bn respectively; these commitments spiralled to $7.5bn in 2008.

To date the continent has witnessed over 35 African countries being engaged with China in infrastructure financing arrangements; with Nigeria, Angola, Sudan and Ethiopia being the largest recipients of this arrangement. The coming of China to the continent is thus viewed as an opportune moment by some African elites to address infrastructure gaps.

However, in addressing the continents infrastructure gaps a lot of questions have been raised regarding Focac and the continent. One of the persistent concerns regarding Focac has been an existing theory that promulgates China as being neo-colonial, or promoting another form of dependency through its infrastructure development in Africa.

An example of neo-colonisation is premised on some of China’s infrastructural assistance which is mainly mineral based through Resource for Infrastructure (R41) deals. R41 allows African governments to invest in public works while paying for them with future export. These non-traditional financing R4I deals typically consist of Chinese loans to fund infrastructure construction in Africa, and are paid back with natural resources as extracted from the recipient African country.

When Kwame Nkrumah first coined the very term neo-colonialism, he was predominantly, though not exclusively, referring to a continuation of the West’s manipulation of the African continent, but simply in a more colluded fashion. Labelling China by any stretch as colonialist is misleading, as in the latter half of the 20th century China backed many anti-colonial liberation movements, in the form of weapons, training and funds.

What is most important relating to Chinese development aid, investment, trade deals and loans to Africa, is that they never come with any preconditions, the “no strings attached” approach.

China’s infrastructure foray into Africa can also be linked with the Beijing Consensus which Ramos coins as a theory of self-determination, one that stresses using leverage to move big, hegemonic powers that may be tempted to tread on your toes.

The Beijing Consensus is as much about social change as economic change. It is about using economics and governance to improve society, an original goal of development economics that somehow got lost in the Washington-consensus driven 1990s.

In essence, through its model of infrastructure development, China has restructured the global platform by providing a viable alternative for African countries.

African elites began mortgaging their mineral resources to the West decades ago with little to show for it. There is plenty of evidence that despite the mineral exchange between Africa and the West, African countries not only grew poorer but had to deal with prescribed structural adjustment policies (SAP) which meant that nations were lent money on condition that they cut social expenditure such as health and education.

Instead the continent became a dumping ground for finished products. The fact is, relations between the traditional great powers, be it France, Great Britain or the US and Africa have fundamentally failed to create prosperity. First in the form of explorative colonial relations, and later in the form of forced neo-liberal aid.

According to Campbell, the West has basically been caught in a losing battle where new rising forces such as China offer alternatives to structural adjustment and austerity.

This is not to say that there have been no challenges with the R41 model. During Focac V in 2012, African leaders openly tabled the contentious issues of trade imbalances in their trade relationship with China.

China responded in favour of infrastructure development in line with Africa’s own regional integration projects as well as promoting greater product beneficiation in the resource sector.

However, China has made it clear that based on its mutual beneficiation and “win-win” position, it is always open to fair trade and negotiations that would benefit both sides. There is a common understanding that reliance on the exploitation of minerals as an engine of growth or infrastructural development is not sustainable for long-term growth.

Chinese companies are now seeking to establish local manufacturing capabilities on the continent, in addition to establishing several special economic zones and other forms of skills transfer.

Particularly since China is now moving to services and willing to offer some of its manufacturing to the continent.

China’s infrastructure footprint on the continent has awakened a new wave of Afro-realism among the local political elites who envisage China as a means to counterbalance the US and EU and are keen to make the most of this newly acquired negotiating power.

The elimination of bottlenecks by providing new transport and port facilities and more power generation capacity are all contributing to laying the foundations for Africa’s economic take-off.

It is up to the Africans to negotiate during Focac as to how R41 can be inclusive of manufacturing capacity which promote self- reliance on the continent.

As we head towards Focac, it is important to note that President Xi Jinping’s administration, has emphasised African infrastructure development as a key strategy going forward. Also of significance is the fact that Chinese Premier Li Keqiang during his May 2014 visit of Africa, enthusiastically promoted major projects such as the “461 framework” on China-Africa economic co-operation and the “three networks” (the high-speed rail network, the highway network and the regional aviation network). Many of these plans will materialise or expand during the sixth Focac meeting.

Judging by the Chinese government’s leadership commitment, the infrastructure agreements – inclusive of the recent one with the AU – it is clear that China’s infrastructural footprint is here to stay. The following are suggested for Focac: it is important that infrastructural initiatives such as OBOR should be tied in with the AU’s Programme for Infrastructure Development (PIDA).

PIDA already has a continent-wide initiative, which aims to develop priority regional and continental-integrated infrastructure networks and services in four key sectors: transport, energy, Information and Communication Technology (ICT) and trans-boundary water.

Secondly, Focac in strategising continental infrastructure 2015 and beyond should ensure that long term maintenance of the infrastructural development is factored into the development plan.

This would mean promoting local skilled labour, and continued investment for maintenance to prevent the growth of dilapidated and crumbling buildings, roads or dams.

Thirdly, the only way of resolving the issue regarding continental minerals is to promote mineral beneficiation as part of partnership agreements, that China already seems open to. Finally, the infrastructural development process must be integrated into the AU’s industrial plan in order to promote manufacturing. Infrastructure and manufacturing linkages will prove strategic in promoting industrial development on the continent.

* Funeka Yazini April is a research specialist at the Human Sciences Research Council.

** The views expressed here do not necessarily reflect those of Independent Media.

CAPE TIMES