China is promising to uplift Africa even more dramatically and powerfully than it is currently doing. That is the strong message delivered by President Xi Jinping to fifty assembled African presidents at December’s fourth summit of the Forum on China-Africa Cooperation (FOCAC), held in Johannesburg. (The first FOCAC was in 2006). As Xi told the African presidents, together they would “open a new era of China-Africa win-win cooperation and common development.”
Xi offered to fund a $60 billion package that includes
- $5 billion of free aid and interest free loans
- $35 billion of preferential loans and export credits
- $5 billion for the China-Africa Development Fund
- $5 billion in special funds for the backing of small and medium enterprises
- $10 billion for a China-Africa production capacity boosting fund
These funds, more than half in the form of debt and a smaller but helpful amount in the form of gifted investment, are intended to assist African nations in continuing to strengthen their infrastructures, alleviate shortages of skills and human resource capacity more generally, accelerate industrialization, modernize agricultural practices, and achieve sustainable development. In 2012, China’s pledge was $20 billion, a significant sum now vastly overshadowed by this year’s FOCAC’s amount.
These sizable new assistance dollar billions come at a time when African economies, for a decade growing rapidly on the back of Chinese demand and Chinese-propelled robust commodity prices, are suffering because of China’s slumping annual GDP totals. That is why the ambitious amounts pledged in Johannesburg are so remarkable, so likely to be transformative, and so inherently beneficial to Africa. But it is also the sweep and scope of how Chinese aid is intended to be used that is so forward-looking. What is less clear is exactly how (and whether) the nations of Africa will be able to repay the new debts incurred by the Chinese lending and financing, however concessional and long-term.
To realize the important and lofty capacity building goals outlined at FOCAC, almost identical as they are to past and present Western and Japanese donor objectives, China intends to
- Establish regional vocational educational centers
- Organize and construct several capacity building educational institutions
- Train 200,000 Chinese citizens to become technicians of all kinds in Africa
- Provide places in Chinese technical establishments to train 40,000 Africans
- Offer 2000 diploma and degree opportunity places for Africans in Chinese universities
- Give 30,000 university scholarships to Africans
- Annually invite 200 African scholars to visit China
- Host 500 African young people for study tours in China each year
- Arrange training courses in China for 1000 African media professionals.
To battle poverty, another compelling African need, President Xi promised to launch 200 “Happy Life” projects focusing on the betterment of the lives of women and children. Again, to reduce budget constraints that would hinder growth in the poorest of the African countries, President Xi proposed to cancel outstanding debts owed to China from those nations. China will also virtually abolish tariffs for African exports to China.
In the agricultural field, China will help to modernize current practices by undertaking special projects in 100 African villages. It will send 30 teams of experts to the continent and establish a new, intense, level of cooperation between Chinese and African agricultural research institutes. Xi also said that, given the likelihood of poor food harvests in Africa in 2016, thanks to the impact of El Nino and widespread drought, China would provide $156 million in one-time emergency food aid.
Given that development is largely impossible where there is civil conflict, China offered $60 million to the African Union to support the operation of the new African Standby Force (in training in 2015). China also pledged to continue to participate in UN peacekeeping missions on the African continent, where it already contributes 8000 men and women, especially in South Sudan.
President Xi’s visit to Africa for FOCAC also included stopovers in Zimbabwe, where there were handshakes and photos but few announcements, and a bilateral parley in South Africa. There, in announcing major initiatives with its largest African trading partner, China promised to provide up to $500 million in loans to Eskom, South Africa’s struggling and badly managed state-owned electrical generating and distributing company. China’s state export credit agency also guaranteed $2.5 billion to enable Transnet, South Africa’s very weak holding corporation for railways, airways, ports, and pipelines to upgrade all of its staggering facilities. These new injections of capital in South Africa, only growing economically in 2015 at 0.08 percent, could make a major difference to the country’s delivery of services and to the prospects of President Jacob Zuma’s faltering government. China’s cash may well keep Zuma in power.
As for the other forty-nine African nations at the FOCAC summit, only when the actual projects agreed upon are chosen will experts be able to predict how well Chinese capital will be deployed, and how beneficially. But individual Africans, especially those who are invited to train in China and those who Chinese technicians will assist in Africa, are sure to have their lives uplifted and their prospects enhanced.
This post appeared under the same title in China-US Focus, Jan. 6, 2016