World
Impact of African Policies on Development of Infrastructure Projects, Emergence of Debt-Trap and Neo-Colonialism
By Kester Kenn Klomegah
In this interview taken by Kester Kenn Klomegah for Eurasia Review, Dr. Frangton Chiyemura, a lecturer in International Development at the School of Social Sciences and Global Studies, The Open University in the United Kingdom, discusses the impact of African policies on development and realization of infrastructure projects, the possible of running into “debt-traps” and the emergence of “neo-colonialism” in Africa. Here are the interview excerpts:
Early December, you held discussions and shared your research on how African leaders influence the modality of engagement and negotiation process with China. What were the key points you discussed with the audience and participants who attended?
First of all, I was invited to share my research findings with Oxford University China-Africa Network (OUCAN). OUCAN engages with researchers, think tanks, policy makers involved in Africa-China relations. My talk was part of this initiative to share research and evidence-based findings and conclusions on Africa-China relations.
My talk was based on my completed PhD research project where I investigated how the Ethiopian government exercised agency – defined as the ability to shape, control and influence, when engaging with the Chinese in the context of wind energy infrastructure. The key point was that the Ethiopian government was able to broker, negotiate, structure, implement and manage Chinese involvement in Adama 1 and Adama 2 wind farms.
The audience was quite engaging and wondered how the Ethiopian government was able to exercise agency as compared to other African governments dealing with the Chinese. There are several factors which make Ethiopia to have such clout when dealing with the Chinese as compared to other African countries. Such factors are not only limited to the governance and leadership model of the government especially under Meles Zenawi and Hailermariam.
Secondly, it relates to the geographic location of Ethiopia, which makes it a stabilising force in volatile East African region. Ethiopia, has a unique advantage, as it is the diplomatic hub of Africa – hosting the African Union (AU) and other international organizations. This adds weight to Ethiopia when negotiating with external powers.
What are the general perceptions and attitudes toward this kind of relations? How do the political and business elites, interpret the benefits of determining concrete directions of investment in Africa?
Both Ethiopian and Chinese governments see the relations as win-win. This comes at the backdrop of strong relations at the political party to party level. In the case of my research I conducted, I can confirm that the Chinese Communist Party has very strong relations with the then Ethiopian People’s Revolutionary Democratic Front. In fact, during my research, I found out that the corporate deals are informally negotiated at the party to party level before they are transferred to the government level for formalization. There seems to be a seamless connection between the ruling party and the government, and any decisions reached at the party level are by extension seamlessly binding on the government.
How would you explain neo-colonialism by foreign players in Africa? What is it and what foreign (external) countries are referred to as neo-colonisers, in your view?
Neocolonialism argument is present in Africa-China relations especially proposed so by scholars who come from a neo-Marxian epistemological grounding. Neocolonialism can be seen as a new form of domination, plunder and exploitation using clandestine and economic statecraft. Of course, there could be some hints or pointers to suggest neocolonial tendencies, but I believe such claims should be levelled on case by case basis, and there has to be concrete evidence to suggest that way. That said, I think we have to be careful to scrutinize where such claims of neocolonialism are coming from, and potentially scrap beyond the surface to establish the motivations and interests for spreading or proposing such claims.
In my opinion, I believe there is no free lunch in the world, African countries should enter into partnerships based on their strategic interests and an understanding of what the partners can provide or deliver. Secondly, every African country should do a comprehensive evaluation of the structure and, the terms and conditions of their engagements with foreign powers. By so doing, this will eliminate the chances for the emergence of claims of neocolonialism. Instead of extending the blame to someone elsewhere, Africa needs to do its homework especially on the implementation and monitoring aspects of the deals. Africa has some of the best regulations and standards, but the problem lies in implementation and monitoring.
Without doubt, Africa needs investment in infrastructure, agriculture and industry, and in many other sectors. Despite negative criticisms, what admirable roles is China playing here, we are talking about working towards the Sustainable Development Goals (SDGs) in Africa?
China is playing a huge role in infrastructure financing and development. For example, available evidence suggests that between 2000 and 2017, China provided about US$143 billion worthy of loans to African governments. This has come quite handy especially given the shortage of finance to build the much-needed infrastructure targeting the SDGs.
In terms of trade, China became Africa’s trading partner in 2009, and two-way trade volume reached its peak in 2014 at the value of US$215 billion. Further, in 2017, it was estimated to have reached about US$148 billion. Of course, trade transactions still remain unbalanced in favour of China. In addition, between 2000 and 2017, transport (US$38.1 billion), power (US$30.1 billion) and mining (US$19.1 billion) ranked respectively as top three sectors that have received the lion’s share of Chinese loans in Africa.
What is your interpretation of debt-trap most often discussed in various platforms and leveled accusations on China? But tangible infrastructure have been built with these loans in many African countries
Interestingly, I don’t believe in this debt-trap diplomacy. First of all, it does not make any business sense that the Chinese will design a project targeting ‘failure’ so that they can control or pull the strings of a particular country. Second, most of the so-called assets that the Chinese are poised to be targeting to run are very complicated, messy and at times quite straining for the Chinese to dirty their hands. Therefore, it doesn’t make any sense for me.
That said, I would not refer to it as ‘trap’ but as merely debt and the consequences associated with that. What that implies is that, for example, in the power sector, African requires on average more than 5 billion worth of investment per year for the next 10 years to address this challenge. Inevitably, part of the money will come from debt financing. For me, I am not really worried about ‘productive debt’ – defined as any money borrowed to invest in a project that has the ability to boost economic growth and at the same time, generate a revenue stream that will pay back the loan. I would be worried about countries that borrow to build, say, a presidential palace, a stadium, or to pay salaries. That type of borrowing for me is bad – its destructive and unproductive borrowing, and that must necessarily stop.
I have to disagree with the assertion that China is debt-trapping Africa. Of course, there are some African countries that are in debt distress situation, others have high risk of being in distress, but the contributions of Chinese finances towards that leave much to be desired. For example, countries such as Chad, Sao Tome and Principle, South Sudan are in high debt distress but the contributions of the Chinese towards that is very insignificant.
We also have some countries like Ethiopia, Cameroon and Ghana where the Chinese hold a substantial share of the debt, but those countries are not in debt distress, although they are high risk of debt distress. You will be surprised that according to World Bank, Africa’s debt to China is less than 23%, compared to what Africa owes to private lenders (32%), and multilateral institutions such as World Bank, IMF etc. (35%). Sometimes, I see the hypocrisy of the West – with whom Africa has substantial debt, demonizing the Chinese on debt-trap diplomacy.
In your expert view, what are the key challenges and problems facing Chinese investors in Africa, what are your suggestions how some aspects of the relations be improved between Africa and China?
Of course, like any other relations, Africa-China engagements have their own challenges which need to be worked on to ensure there is mutual benefit and win-win situation. Some of the challenges relate implementation of regulations and standards by African governments when dealing with the Chinese. The issues lie not in regulations, but for me in the implementation and enforcement. This is the first aspect that needs to be addressed by African governments, especially in the infrastructure sector.
The second challenge relates to peace and security. Some of the African countries are in conflict situation or are, at least, under terrorist threat. This threatens some of the Chinese businesses and enterprises.
Third, the unbalanced nature of trade between China and Africa create room for emergence of neo-colonial arguments and such needs to be addressed immediately. Some of the challenges are minor, these include language barriers, differences in culture and work ethics. These can easily be resolved.
The fourth and final is about in some African countries lack policy certainty and stability which negatively impact on Chinese long-term business planning. Such countries include Zimbabwe where there has been of note currency uncertainty, policy uncertainty and even regulatory uncertainty. This impacts on long-term Chinese business interest.
By Kestér Kenn Klomegâh
Never underestimate the power of the Economic Community of West Africa States (ECOWAS), also known as CEDEAO in French and Portuguese, created on 28th May 1975 as a regional political and economic union bringing together fifteen (15) countries of West Africa. Per the date of its establishment, this so-called regional bloc marks its 50th year in 2025, a significant historical celebration.
Considered one of the pillar regional blocs of the continent-wide African Economic Community (AEC), ECOWAS generally has its primary common goal of working consistently towards achieving, what is first referred to, as “collective self-sufficiency” for its member states by creating a single large trade bloc by building a full economic and trading union. Additionally, ECOWAS aims to raise the living standards of an estimated population of over 425 million people and to promote economic development based on the principles of interdependence, solidarity, and cooperation.
Until writing this article, ECOWAS has frequently been discussing and reviewing the Abidjan-Lagos Corridor Highway Development Project, one single regional infrastructure project these several years. It has shown its total commitment to looking for funding while billions have been siphoned by leaders into foreign banks. African leaders are quick negotiating and paying for foreign military weapons but are grossly unsuccessful in soliciting similar assistance from these external partners to invest in infrastructure development such as the Abidjan-Lagos Corridor Highway Development Project.
West African Highway Launched in 2017
The construction of this proposed grandiose West African highway has its chequered history. The proposed project was successfully launched in 2017, and since then it has had a series of high-powered meetings and conferences, technical studies have been conducted, and the construction to its feasibility and practical operationalization. The Abidjan-Lagos highway, the six-lane dual carriage highway, is estimated at $15.1 billion.
On resource mobilization, it was explicitly noted that ECOWAS had adopted a new regulatory framework on the Public Private Partnership (PPP) – an incentive for the entry of the private sector in large investments like the nature of this project. The African Development Bank (AfDB) on behalf of the development partners offered its assurance for unwavering commitment to the realization of the highway.
Akinwunmi Adesina, President of the African Development Bank (AfDB) has several times highlighted the importance of the Abidjan-Lagos highway as an infrastructure project in West Africa that would ease the free movement of people, goods and services, generate social and economic activities, and ultimately promote cross-border trade within the region, its economic viability and enormous potentials especially now that African Union looks to implement the African Continental Free Trade Area (AfCFTA). Noticeably, Africa has long been considered a frontier for manufacturing, technology, for food production. Africa is getting ready for business, it is busily building the world’s largest single market of 1.4 billion people.
Special Meetings and Technical Consultations
Several meetings upon meetings and meetings have been held since the project was proposed in 2017. Since 2017, paid meetings have been held, and experts have been paid. The latest of such a paid meeting was held on November 10-11, 2024. This roundtable was initiated following the instructions given to the ECOWAS Commission. Late September 2024, such a roundtable meeting was held in Abidjan, the capital city of Côte d’Ivoire, under the auspices of the Commission of the Economic Community of West African States (ECOWAS), the African Development Bank (AfDB) and the ECOWAS Bank for Investment and Development (EBID).
The highway corridor is calculated to be approximately 1,080 km long. It will connect some of the largest and most economically dynamic cities Abidjan, Accra, Cotonou, Lomé and Lagos while covering a large proportion of West Africa’s population. It will also link very vibrant seaports in West Africa. In addition, it will serve all the landlocked ECOWAS member-states, for example, Burkina Faso, Mali and Niger in the region. Nearly 40 million people are estimated to be living along the Abidjan-Lagos corridor while 47 million people travel along the axis every year. These are expected to be direct beneficiaries of the development of the project touted to be a real backbone of trade in the region.
According to official documents, this highway project falls in line with the key objectives of the ECOWAS Vision 2050, including (i) facilitating the movement of people and goods, and (ii) accelerating trade and transport, regional and international, improving road infrastructure. It is eventually expected that the transport corridor will be transformed into a development corridor to stimulate investment, sustainable development and poverty reduction within the entire region.
West African Highway and AfCFTA
The focal point of controversy and debate, these several years, are centred on the mechanism of financing, and the state-of-the-art management of this new mega-highway – from planning through practical construction to its final commissioning, ready for cutting-edge usage by the transport industry. The idea of prioritizing highway innovation, signalling a bold leap in West Africa’s transportation infrastructure, is its recognizable potential transformative impact. Simply intended to improve and facilitate the movement of services, goods and people across the region. The Abidjan-Lagos Highway highlights its potential to enhance regional connectivity and drive economic growth, especially with the establishment of the African Continental Free Trade (AfCFTA), the ambitious flagship of the African Union (AU).
According to ECOWAS’ latest document issued after their two-day special meeting held on November 11 in Abidjan, Côte d’Ivoire, “experts have lauded findings of the study which has among others, unveiled a potential $6.8 billion investment prepared and ready to be implemented to unlock economic growth and enhance the viability of the proposed highway.” The overall objective is to identify and unlock the inherent and latent economic potential (short, medium and long-term) and commercial viability of economic and industrial value chain projects. These economic projects, once implemented, will also generate trade volumes and traffic to augment the viability of the highway.
The final draft reports were issued after groups revisited (that was not the first time) several tolled bridges and roads in Abidjan for knowledge and experience sharing strategy envisaged for the Abidjan-Lagos Highway. At the end of the exercise, the study report (re)validated commitment to unlock the inherent and latent economic potential of the highway construction and estimated $6.8 billion in potential investment in the region.
Final Construction Still Out of Sight
For the past few years, significant attention has been drawn by the widely publicized announcement of securing enough funds from African banks and external sources for the construction of this regional highway which could become a cornerstone, and the public narrative of achievement by ECOWAS, which marks its 50th year in 2025. However, transport industry analysts, researchers and experts have already cast serious doubts and skyline scepticism if ECOWAS could live up to this onerous task. Grandiose ceremony-infested ECOWAS future task of achieving its primary target of constructing a ‘speed-highway’ remains an eternal dream. Noticeably, ECOWAS has little to celebrate, except its existence by name, (the golden jubilee) at its 50th year in May 2025. At least, Africans will rather jubilate over the authenticity of reforming and transforming the Economic Community of West African States (ECOWAS).
By Adedapo Adesanya
After many delays and negotiations, richer countries agreed to take the lead on raising at least $300 billion per year by 2035 to support climate adaptation and emissions reduction projects in developing nations.
This came after two exhausting weeks of chaotic bargaining and sleepless nights at the Conference of Parties (COP29) held in Baku, Azerbaijan.
Other donors — including less wealthy countries, development banks, and private investors — were also invited to chip in. The agreement also called on all these parties to work, on a voluntary basis, toward the goal of $1.3 trillion.
The figures are far lower than what many in Baku had hoped for with delegates from countries like India, Kenya, and Vanuatu among others lamenting the agreed amount. Expectations were around $2.3 trillion.
“The amount that is proposed to be mobilised is abysmally poor. It’s a paltry sum,” said Indian delegate Chandni Raina.
“This document is little more than an optical illusion. This, in our opinion, will not address the enormity of the challenge we all face.”
“The commitments made in Baku — the Dollar amounts pledged and the emissions reductions promised — are not enough. They were never going to be enough,” said Ralph Regenvanu, climate envoy from the island nation Vanuatu. “And even then, based on our experience with such pledges in the past, we know they will not be fulfilled.”
“This COP has been a disaster for the developing world,” said Mohamed Adow, the Kenyan director of Power Shift Africa, a think tank.
“It’s a betrayal of both people and planet, by wealthy countries who claim to take climate change seriously.”
Nations struggled to reconcile long-standing divisions over how much rich nations most accountable for historic climate change should provide to poorer countries least responsible but most impacted by Earth’s rapid warming.
The climate envoy of the European Union, Wopke Hoekstra said COP29 would be remembered as “the start of a new era for climate finance”.
Despite repeating that no deal is better than a bad deal, this did not stand in the way of an agreement, despite it falling well short of what most of these delegates wanted.
The final deal commits developed nations to pay at least $300 billion a year by 2035 to help developed countries green their economies and prepare for worse disasters.
A group of 134 developing countries had pushed for at least $500 billion from rich governments to build resilience against climate change and cut emissions of planet-warming greenhouse gases.
UN climate chief, Mr Simon Stiell acknowledged the deal was imperfect.
“No country got everything they wanted, and we leave Baku with a mountain of work still to do. So this is no time for victory laps,” he said in a statement.
The United States and EU have wanted newly wealthy emerging economies like China — the world’s largest emitter — to chip in.
The final deal encourages developing countries to make contributions on a voluntary basis, reflecting no change for China which already provides climate finance on its own terms.
The deal posits a larger overall target of $1.3 trillion per year to cope with rising temperatures and disasters, but most would come from private sources.
Wealthy countries and small island nations were also concerned by efforts led by Saudi Arabia to water down calls from last year’s summit in Dubai to phase out fossil fuels.
A number of countries also accused Azerbaijan, an authoritarian oil and gas exporter, of lacking the experience and will to meet the moment, as the planet again sets temperature records and faces rising deadly disasters.
The next COP will hold in Brazil in 2025.
By Adedapo Adesanya
Stablecoin-based infrastructure provider, Yellow Card, has been issued a Crypto Asset Service Provider (CASP) licence by the Financial Sector Conduct Authority (FSCA) in South Africa.
This is coming after the company announced the closing of its Series C financing valued at $33 million led by Blockchain Capital, with participation from Polychain Capital, Third Prime Ventures, Castle Island Ventures, Block, Inc., Galaxy Ventures, Blockchain Coinvestors, Hutt Capital, and Winklevoss Capital in October.
Yellow Card, which launched in South Africa in 2020, has facilitated over $3 billion in transactions in the last several years and now operates in 20 countries across the continent.
Commenting on the FSCA’s decision to issue the licence to Yellow Card Financial South Africa, Mr Chris Maurice, Yellow Card’s co-founder and CEO, said, “The CASP licence underscores Yellow Card’s commitment to its customers in South Africa and regulatory compliance across the continent. This achievement reflects our dedication to providing secure, compliant and transformative solutions for our customers both in South Africa and across Africa.”
With the licensing and funding, the company plans to expand its B2B offerings by enhancing its stablecoin rails, upgrading infrastructure, and advancing its B2B API and Widget.
This will further help to drive stablecoin adoption, which is surging throughout Africa, with sub-Saharan Africa having the highest adoption rate in the world at 9.2 per cent.
In South Africa alone, where the number of total users of crypto assets is estimated to amount to 5.8 million people, stablecoins have experienced growth of 50 per cent month over month since October 2023, displacing bitcoin as the country’s most popular cryptocurrency. Stablecoins are cryptocurrencies pegged against the Dollar.
“As the stablecoin landscape continues to evolve, Yellow Card is committed to leading the charge in making digital assets accessible and secure for businesses across Africa,” Yellow Card said in a statement.
“These efforts will empower businesses with seamless solutions for liquidity management and their general operations,” the firm added.
-
Feature/OPED5 years agoDavos was Different this year
-
Travel/Tourism8 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz2 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking6 years agoSort Codes of GTBank Branches in Nigeria
-
Economy1 year agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking2 years agoFirst Bank Announces Planned Downtime
-
Sports2 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn
-
Technology4 years agoHow To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN