China is celebrating a decade of the Belt and Road Initiative. An ambitious project launched by President Xi Jinping in 2013 to boost connectivity and trade worldwide with Chinese investment and technical know-how in infrastructure development. Over the past decade, the BRI has significantly expanded trade between China and many countries, reaching $19.1 trillion in total trade volume. Since its launch, the Belt and Road Initiative (BRI) has poured hundreds of billions of dollars to power the construction of bridges, ports, highways, power plants, and telecom projects across Asia, Latin America, parts of Europe, and Africa.
China’s Belt and Road Initiative (BRI) stands as a defining force in global infrastructure development and economic cooperation, especially for Africa, which has emerged as a pivotal focal point for the BRI, and the impact of Chinese investments in the region has sparked substantial interest and debate.
Africa has undeniably assumed a critical role in China’s BRI vision, with a commitment to substantial investments. These investments encompass an array of infrastructure projects, primarily focusing on the transportation and energy sectors. Ride with me as I aim to dissect the impact of the BRI in Africa, providing verifiable data and examples to understand this ambitious initiative and its implications.
Key infrastructure projects in Africa
One of the primary objectives of the BRI in Africa is to enhance transportation connectivity and facilitate the efficient movement of goods and people within and between African nations. The Mombasa-Nairobi Standard Gauge Railway in Kenya is an example of an African BRI project. This 327-mile railway line, completed in 2017, has significantly enhanced transportation connectivity between Kenya’s two largest cities, Mombasa (Kenya’s primary coastal city and a major port) and Nairobi (the capital city).
The improved transportation link provided by the SGR has substantially impacted Kenya’s economy and boosted the efficiency of transporting goods, including imports and exports, through the Port of Mombasa. This has reduced the cost of transporting goods, facilitating trade, and reducing the cost of doing business along these routes in Kenya.
The project was funded with a significant loan from the Export-Import Bank of China, and it was built by China Road and Bridge Corporation (CRBC), a Chinese state-owned enterprise. It’s worth knowing that it’s a standard model for many BRI projects where Chinese financing is involved to have Chinese companies play a central role in project development.
Over the years, we have also witnessed significant investments in the energy sector. These encompass hydroelectric dams, solar farms, and other renewable energy sources like the Grand Ethiopian Renaissance Dam (GERD).
While the GERD is not officially part of the BRI, it has been linked to China’s Belt and Road Initiative because of the involvement of Chinese companies in the dam’s construction and financing. Chinese companies, notably the China Gezhouba Group Corporation (CGGC), have been involved in constructing the GERD, and loans from Chinese banks have partly financed it.
As Africa’s largest dam, when completed, this dam will generate 6.45 gigawatts of electricity, transforming the energy landscape of Ethiopia and potentially neighbouring countries. The GERD’s completion will have regional implications, as Ethiopia envisions exporting surplus electricity to neighbouring countries, which can transform the region’s energy access and economic development. Nevertheless, the dam has led to diplomatic tensions, and there are ongoing water rights and use negotiations.
Another infrastructure the BRI has invested in is Special Economic Zones (SEZs) established in multiple African countries. A prime example of a BRI-backed SEZ is Nigeria’s Lekki Free Trade Zone. This massive industrial complex near Lagos is designed to facilitate manufacturing, trade, and economic development. The LFTZ, which includes a deep-sea port (Lekki Deep Sea Port), has been linked to the Belt and Road Initiative due to the involvement of Chinese investors and companies.
While I believe the Lekki Free Trade Zone (LFTZ) and Lekki Deep Sea Port in Nigeria can bring significant benefits to the country’s supply chain network and overall economy through improved logistics and trade facilitation, leading to cost savings along the supply chain. These will not come without challenges and concerns.
The impact and challenges of BRI investment in Africa
As African nations embrace Chinese investments and infrastructure projects, there are several concerns and challenges. Still, on the flip side, some positives are evident enough. Let’s look at the bright side.
Although Africa’s infrastructure deficit is a significant challenge that hampers the continent’s economic development and the well-being of its people, one of the most immediate and observable impacts of the BRI in Africa has been the improvement of infrastructure. According to the African Development Bank (AfDB), Africa’s road network is inadequate, with only about 34% of the roads in good or fair condition. Given this fact, it is safe to see the roads, railways, and ports built through the BRI as making Africa more accessible for trade and investment. This can create jobs and, in turn, reduce poverty and inequality in African countries.
However, as of the end of 2020, the China Africa Research Initiative (CARI) said Chinese lending to Africa had reached over $150 billion, with the majority directed towards infrastructure projects. There’s no doubt that Chinese loans and investments have been a lifeline for many African nations with the BRI playing a significant role in filling the infrastructure funding gap. However, many believe African nations are also being set up for debt traps.
And truly, one of the most prominent concern of the BRI’s impact in Africa is the debt burden placed on African nations. Given the risk that countries may struggle to repay these loans, concerns about sovereignty and the risk of debt dependency have risen. Aside from that, some BRI projects, particularly large-scale infrastructure initiatives like dams, have raised concerns about their environmental impact which include disruptions to ecosystems, displacement of local communities, and threats to biodiversity.
There have also been allegations of poor labour practices and disregard for human rights in some African BRI projects, including concerns about the treatment of labourers, the lack of transparency, and limited community engagement.
As the saying goes, there’s a little good and bad in everyone. In this case, the BRI is a blend of mixed impact on the continent. While it has brought some good that is visible enough for all to see, it has put some African nations in a challenging position, navigating between economic benefits of BRI investments alongside the associated risks.
Also, looking at the handwriting on the wall, the funds may not keep flowing from China moving forward, so it is essential for these nations to exercise prudence in project selection, insist on transparent agreements, and establish effective governance structures. This approach is crucial in ensuring that BRI projects truly benefit African societies in a sustainable and equitable manner.
In conclusion, though, China’s Belt and Road Initiative has presented a monumental shift in Africa’s recent infrastructure development. We must stand firm and understand that Africa’s future, though in need of massive investment for development, should not be reliant on Chinese or American loans, we must look within and foster an open market that is good for investments and we will thrive in a matter of time.