The Story
China is switching up on its assistance to African countries.
Meaning?
China is giving more money to Africa. This time, featuring more grants and interest-free loans.
Back up small
Last week, China hosted 53 African countries in Beijing at the Forum on China-Africa Cooperation. 49 out of 55 African heads of state or governments attended, including President Buhari. At the forum, China’s President Xi Jinping announced a pledge of $60 billion to Africa aimed at financing development initiatives over the next three years.
Alright, zoom in
Generally, a quarter of the $60billion pledge will be interest-free loans. $50 billion will come from the Chinese government, with private sector firms expected to put up the remainder through their investment projects. The $50 billion from the Chinese government includes $20 billion in new loans and $15 billion in foreign aid, plus an additional $15 billion in two special funds for development and import financing, respectively.
I’m listening…
China’s engagement with Africa has not exactly been welcome, sparking renewed debates about “debt trap diplomacy” and “neo-colonialism” as threats facing the continent. That said, what is pretty clear about China is that it is bent on fostering economic relationships, strengthening its state power and creating more sustainable economic opportunities for its people back home.
What’s in it for Africa?
China believes that increasing Africa’s industrial capacity and exports is important to sustain its partnership with the continent. Hence, Chinese firms have spent the better part of the last two decades in Africa developing roads, bridges, airports, factories, hospitals and other much needed hard infrastructure. But, at the same time, China is pretty tough on getting investment returns and debt repayments. See Zambia, for example.
And Nigeria?
A lot, actually. Read this. Nigeria is one of China’s largest investment partners on the continent. From the FOCAC, we stand to gain at least $328million in additional ICT investment alone.
Sounds too good to be true
Fair enough. But Chinese investment will go a long way in enabling us to meet the targets we’ve set out in the Economic Recovery and Growth Plan. Still, it’s really up to us to manage our borrowings (currently, debt management doesn’t seem as high as it should be on the agenda).
When we say Oil…
You say, America? With 11 million barrels produced in August, upstaging Russia and Saudi Arabia, the US is now the world’s largest producer of crude oil.
When we say Youth Service
You say, No exemptions. On Friday, Finance Minister, Kemi Adeosun, resigned amid claims of forging her NYSC certificate. In a statement, she explained, “I have today, become privy to the findings of the investigation into the allegation made in an online medium that the Certificate of Exemption from National Youth Service Corp (NYSC) that I had presented was not genuine… This has come as a shock to me and I believe that in line with this administration’s focus on integrity, I must do the honourable thing and resign.”
When we say …Truce?
You say, Deal. After five years of being in conflict and amassing up to 50,000 fatal casualties, things are looking promising in South Sudan. On Wednesday, South Sudan’s President Salva Kiir and main rebel leader, Riek Machar, signed a peace agreement.
When we say Colonial Violence…
You say, #NeverForget. This week, the French government will open archives to allow the public search for those who disappeared in French military custody during the brutal conflict that led to Algeria’s independence from France.
When we say Share this newsletter…
You say, Relax. Which is exactly what South Africa’s President Cyril Ramaphosa recommends for those worried about the South African government’s plans for land reform. Here’s why South Africa needs land reform. But, in the meantime, share just relax.
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