Can China’s Big Loans to Africa Continue?

Over the past decade, China has extended billions of dollars in loans to African countries, mostly for infrastructure. However, some experts say the global trade war may factor into how China uses its money.

Chinese and African leaders meet every three years to discuss ways China can fund Africa’s development aspirations. The next session, to begin Monday, will address the Belt and Road initiative, which aims to better connect China with the African continent.

But with China engaged in a trade disagreement with the U.S., the Chinese government may be less willing to expand its financial commitment to Africa, according to Cobus van Staden, senior researcher on Africa-China relations at the South African Institute of International Affairs.

At the 2015 gathering in South Africa, China pledged to loan Africa $60 billion. Chinese companies are currently building railway lines in Kenya, Nigeria and Angola, as well as roads and housing projects in South Africa.

However, some Africans worry that their governments have over-borrowed, leaving their countries with huge debt.

The head of the Africa Policy Institute, Peter Kagwanja, says the loans need to be directed at projects that have high economic returns.

“But of course, the question is how do African countries deal with that particular debt, and China’s answer, which Africa seems to be agreeing with, is that we need investments in activities that are going to produce maximally to get the investment to pay for themselves,” Kagwanja said.

China is accused by Western powers of supporting and funding undemocratic states and countries that do not have respect for human rights.

As China’s interests expand, Kagwanja says, it cannot ignore the security and political threats in Africa.

“That question is critical, and it was brought on the forefront the kind of uncertainty that surrounded Kenya’s political elections last year at a time when China was celebrating one year of SGR [standard gauge railway] in the country, and that uncertainty raises questions: What can China do to secure the political stability of African countries? What kind of governance systems does Africa need to adopt in order to secure a long-term basis not only investment, but long-term planning for socio-economic transformation?” Kagwanja said.

The two-day forum in Beijing ends Tuesday.

Source: Voice of America

Can China’s Big Loans to Africa Continue?

Over the past decade, China has extended billions of dollars in loans to African countries, mostly for infrastructure. However, some experts say the global trade war may factor into how China uses its money.

Chinese and African leaders meet every three years to discuss ways China can fund Africa’s development aspirations. The next session, to begin Monday, will address the Belt and Road initiative, which aims to better connect China with the African continent.

But with China engaged in a trade disagreement with the U.S., the Chinese government may be less willing to expand its financial commitment to Africa, according to Cobus van Staden, senior researcher on Africa-China relations at the South African Institute of International Affairs.

At the 2015 gathering in South Africa, China pledged to loan Africa $60 billion. Chinese companies are currently building railway lines in Kenya, Nigeria and Angola, as well as roads and housing projects in South Africa.

However, some Africans worry that their governments have over-borrowed, leaving their countries with huge debt.

The head of the Africa Policy Institute, Peter Kagwanja, says the loans need to be directed at projects that have high economic returns.

“But of course, the question is how do African countries deal with that particular debt, and China’s answer, which Africa seems to be agreeing with, is that we need investments in activities that are going to produce maximally to get the investment to pay for themselves,” Kagwanja said.

China is accused by Western powers of supporting and funding undemocratic states and countries that do not have respect for human rights.

As China’s interests expand, Kagwanja says, it cannot ignore the security and political threats in Africa.

“That question is critical, and it was brought on the forefront the kind of uncertainty that surrounded Kenya’s political elections last year at a time when China was celebrating one year of SGR [standard gauge railway] in the country, and that uncertainty raises questions: What can China do to secure the political stability of African countries? What kind of governance systems does Africa need to adopt in order to secure a long-term basis not only investment, but long-term planning for socio-economic transformation?” Kagwanja said.

The two-day forum in Beijing ends Tuesday.

Source: Voice of America