Africans deserve to know details of shady deals their leaders sign with China

| Published Tuesday, 11 September 2018 | 16:37 GMT

Africans deserve to know details of  shady deals their leaders sign with China

Chinese President in African economic invasion

China's footprints are all over the African continent, signing deals with many countries. However, the finer details of China-Africa loans are often kept secret. There are concerns that African countries are mortgaging their natural resources as collateral for the loans. The China-Africa deals ought to be transparent, and the public has the right to scrutinise the agreements.

The news of China taking over Sri Lanka’s port and 15000 hectares of land on a 99-year lease recently raised questions and debate on the African continent about the kind of agreements African presidents are signing with China. The deal which has raised eyebrows was signed between two state firms, Sri Lanka Ports Authority (SLPA) and China Merchants Port Holdings.

The South African parliament, led by the minority leader from the Democratic Alliance (DA) Mmusi Maimane, demanded to know from President Cyril Ramaphosa “the terms of Eskom’s $2,313,143,580 (R33 billion) loan with the Chinese Development Bank.” Maimane gave President Ramaphosa 14 days to table the terms in parliament “in the interest of openness and transparency.” Eskom is South Africa’s electricity public utility.

Many other African countries have made trade murky deals with China. Zambia’s President Edgar Lungu has signed off on at least $8 billion from the Chinese. According to Africa Confidential, talks are underway for a Chinese company to take over Zesco, a state-owned power company in Zambia. Africa Confidential, in a report titled Bonds, bills and even bigger debts revealed that Zambia National Broadcasting Corporation (ZNBC) is already being run by the Chinese. There are concerns that the Kenneth Kaunda Airport is likely to end up in the hands of the Chinese if Zambia doesn’t pay its debts.

The trade deals signed by African leaders have not been revealed to the public. The 2018 edition of the Forum for China- Africa Cooperation summit held in Beijing, China.  At the summit China pledged US$60 billion of financing to Africa. The question many have asked is: what is Africa offering China in return for the major loans? Trade and aid and loans come with clauses and conditions that are never revealed to the public. It is the citizens who end up paying for such trade deals. Grant Harris, a former Africa advisor to President Barack Obama said in a BBC interview that “China is a debt trap for Djibouti, Kenya and other African countries.”

Chinese corporations are all over Africa.  In June 2017 a McKinsey & Company report estimated that there are more than 10,000 Chinese-owned firms operating in Africa.

What are Chinese corporations doing in Africa? That's a highly controversial issue.

The reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth.

This is the view several African politicians have. The Zambian politician Michael Sata was one of them. At least he was before being elected President of Zambia in 2011. He wrote a paper presented to Harvard University in 2007 that said “European colonial exploitation in comparison to Chinese exploitation appears benign, because even though the commercial exploitation was just as bad, the colonial agents also invested in social and economic infrastructure services Chinese investment, on the other hand, is focused on taking out of Africa as much as can be taken out, without any regard to the welfare of the local people.” (quoted in Scott D. Taylor's "The Nature of Chinese Capital in Africa, Current History, May 2018, p. 197)

Sata's bold position got some support by a deadly blast at an explosives factory partly owned by the Chinese state killing 50 Zambian workers.

Africa’s Equities Have Underperformed Emerging Markets

Globalization managed to skip Africa by for years. There were several reasons for this. Africa was considered to have poor infrastructure, political instability, and low income. "The trade in oil, gas, gems, metals and rare earth minerals wreaks havoc in Africa. During the years when Brazil, India, China and the other “emerging markets” have transformed their economies, Africa's resource states remained tethered to the bottom of the industrial supply chain," writes Tom Burgis in The Looting of Africa (New York: Perseus Books Group, 2015). While Africa accounts for about 30 per cent of the world's reserves of hydrocarbons and minerals and 14 per cent of the world's population, its share of global manufacturing stood in 2011 exactly where it stood in 2000: at 1 percent.

Everything changed when China came along. The country was desperate for raw materials and energy to power their growing manufacturing capacity. They put Africa on the globalization map. The continent was placed right next to Shanghai in terms of Beijing’s business priorities.

Africa was at the top of the Beijing economic agenda. It was an easy and convenient target. Chinese leaders sent business delegations to every capital in Africa year after year. These delegates secured infrastructure projects and proposed trade deals, converting Africa into a “second continent” for China. Metaphorically, that is.

Howard W. French describes the situation in the book China’s Second Continent (New York: Alfred A. Knopf, 2015), explaining; ““Sensing that Africa had been cast aside by the West in the wake of the Cold War, Beijing saw the continent as the perfect proving ground for some Chinese companies to cut their teeth in international business. It certainly did not hurt that Africa was also the repository of an immense share of global resources—raw materials that were vital both for China’s extraordinary ongoing industrial expansion and for its across-the-board push for national reconstruction.”

The long arm of globalization had touched Africa. Trade between China and the “second continent” of Africa reached close to $300 billion in 2015.

Not everyone feels that China is attempting to turn Africa into a Chinese colony though. One such person is Ching Kwan Lee, a professor at the University of California. Lee argued in the Specter of Global China: Politics, Labor, and Foreign Investment in Africa (University of Chicago Press, 2017) that the investments the Chinese state made in Africa weren’t made as “imperialists” or “colonialists”. Nor were ones by private corporations. Chinese corporations aren’t being motivated by profits. They have a long-term horizon in mind, and they make for good local citizens. The Chinese people in Africa pay their fair share of taxes to the countries they do business with. Lee goes so far as to contend that Chinese corporations actually promote African independence and autonomy, rather than the usual dependence that is associated with colonialism. China is helping Africa to stand by themselves, rather than making Africa dependent on them.

Maybe it would be best to avoid sharing this opinion with the Pakistanis and Sri Lankans that are heavily indebted to China. These are the people that are most at-risk of becoming modern-day colonies for Beijing.

Source: Finance.yahoo.com 8/4/2018