Comparing and Competing. Africans Weigh the EU and China’s Investment Strategies

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LOMÉ, Togo – While most of the world is glued to the dramatic images of war in Ukraine and Russia’s broader confrontation with the West, a different, even wider, kind of power conflict has been shaking a whole other continent

over the past few months. The competition between European and Chinese investments in Africa has become fiercer. Both foreign powers are trying to ameliorate their troubled economies and insatiable needs by hoping to strengthen their financial relationship with the African continent further than ever before.

The general sentiment among African authorities and citizens is that working with China is much faster and easier than dealing with an often divided Europe which attach too many and, frequently, hypocritical conditions to their investments. Democratic values, renewable energies, financial standards are almost never contingent on the launch of Chinese projects in Africa even though the quality of their work is often criticized. Europe, instead, has a very different approach that, if not respected, can lead to the termination of the economic relationship with a particular African state and possible sanctions like it happened before in Togo, Mali and Burundi, to quote a few. But with the pressure mounting from other investment powers like Canada, Russia, Turkey and India, the African continent feels that it has always more and more foreign countries to partner with for its development.

In early February the President of the European Commission, Ursula von der Leyen, announced a volume of investments towards the African continent of over 150 billion Euros (out of the 340 billion accorded for the ‘EU Global Gateway’ initiative valid until 2027) destined for the public and private sector. This commitment was made two months after the Forum on China-Africa Cooperation (FOCAC) where China took the opportunity to unveil a $40 billion plan that will add to previous investments spread throughout various African States. About 20 African countries, out of the 65 considered internationally, are in fact part of the Belt and Road Initiative, China’s way to promote a new engagement towards the global economy and increase its status around the world. Both the EU and China have chosen the Senegalese capital, Dakar, as the gateway to the African market.

The tension between von der Leyen and Macky Sall, President of Senegal and the current president of the African Union (AU), was palpable. During the last summit in Brussels, Sall stressed the importance of financing projects related to the exploration of gas fields. “About 600 million Africans – more than the entire population of Europe – still lack access to electricity”, likes to point out the Senegalese President who wants a renewed and modernized EU-Africa relationship directed towards action. “Cutting off funding for new gas exploration would amount to a fatal blow for emerging African countries”. The president of the EU Commission, instead, has been pushing Africa to change their sources of energy by becoming “greener” even though renewable energies like solar and wind power represent a really small fraction of the power that oil and gas can produce. Africans feel duped. “Europe has been using fossil energy for decades to grow her industry while damaging the world environment”, comment African authorities and citizens alike. “Now Brussels is asking us to use green energies for our people while their oil companies keep looking for and finding oil and gas on our territory”.

To open the FOCAC Sall, whose speech has been published on the Senegalese government website (while the one pronounced at the EU summit in Dakar wasn’t), talked about “moving forward hand in hand, in a pragmatic and efficient way, as evidenced by the intensification of our commercial exchanges, the investments and the numerous achievements under our various Action Plans “.

It is precisely in Senegal that most of the game is played between the two powers. Both Europe and China have financed numerous infrastructures in the country relating above all to the transport sector. Roads, bridges, railways, and ports have been built thanks to decades of funds from Beijing and several European states including France, Senegal’s former colonial power. While Senegalese lament the poor quality of the Chinese infrastructures, they protest against the high prices to access the highway built by the French company Eiffage.

“China with her low prices has helped the Senegalese middle class to grow,” explains Fatim Ba, an entrepreneur between Dakar and the coastal town of Toubab Dialaw. “Thanks to Chinese goods, even if they are of low quality, the poorest Senegalese can sell and buy, increasing their standard of living”. Dakar is also home to one of the most symbolic buildings on the African continent which, according to many Senegalese, could only be built thanks to China: the Museum of Black Civilizations, financed with 30 million dollars and inaugurated in the center of the capital in December 2018. “China understands what it’s like to see its culture threatened,” said to the press Hamady Bacoum, the museum’s director. “Europe denied African cultures at least until our independence in the 1960s, which is why it would have never financed such a work”.

In Kenya, where the European Investment Bank launched in January its East African hub based out of Kenya’s capital, Nairobi, agreements are ongoing. From a simple donor country, the EU wants to become a strategic partner in various sectors, including trade and investment, but also by fighting climate change and instability in the region. Kenyans don’t seem particularly enthusiastic about their relationship with the EU, especially after Great Britain, their former colonial power, exited the European bloc. Even the relationship between Beijing and Nairobi is growing uneasy. The Standard Gauge Railway (SGR) built by China to run a high-speed train from Mombasa to Naivasha passing through Nairobi (with plans to reach the Ugandan border), is causing a headache for the local authorities and experts. The Kenyan Parliament has already spoken about the impossibility to pay back their debt. “We are not saying the debt is not there”, commented Kimani Ichung’wa, chairman of the Parliamentary Budget and Appropriations Committee, while talking about the $4.5 billion loan Kenya received from China. “But we simply want to renegotiate what we owe because at the current rate we won’t be able to repay our Chinese creditors”. Every month the railway loses over $9 million while the Kenya Railways defaulted on $350 million payment to Africa Star, subsidiary of the China Road and Bridge Corporation that operates the SGR and seem less willing to see other loans approved for a possible railway expansion. The Chinese debt-trap is always more discussed in Kenya and other East African countries. That’s why Nairobi is looking towards other sources of investment like the Gulf States, India and the USA.

A greater conscience about the risks of European and Chinese investments is growing also in the Democratic republic of Congo (DRC). The authorities have been temporarily closing numerous mining companies that don’t respect the rules while the $6 billion “infrastructure-for-minerals” deal with Chinese investors is under review. Chinese companies have been accused of badly treating their Congolese employees and irreversibly damaging the environment. Laws about the mining sectors are changing in order to gain more profit and, apparently, force the investors to consider protecting the local people and nature. Regular fights erupt between Chinese and Congolese working for the same company while the use of explosives and chemicals to dig in a certain area for metals leave the land around unable to produce any sort of agricultural product.

In a difficult place like the Central African Republic (CAR), where a brutal civil war is still ongoing, most of the people seem indifferent to Chinese investments in a region where the EU decided to mainly provide humanitarian aid. Beijing is exploring for oil in the north-east of the country while looking for minerals in the north-west. Authorities are fine with that even when China is accused of allegedly financing local armed militias to protect their areas of interest. Small local communities, though, have rebelled before against the damages that Chinese investments are causing to their land and fragile social stability.

And of course tensions are high on the Covid-vaccine debate. The EU had once again declared its veto at African States producing their own generic vaccines against Covid-19, a logic that would be unthinkable coming from a Chinese perspective. Africa asked for “a temporary intellectual property waiver” but the EU – where most of the major companies behind the vaccines are based – has opposed the request arguing that “the first priority was to build up production capacity in poorer countries”. That’s why European pharmaceutical companies like Germany’s BioNTech decided to “unveil mobile vaccine production units housed in shipping containers aimed at bringing manufacturing to Africa”. While this could be seen as good news, many African authorities are questioning the real objectives of this project that continues to block the local health sector from thinking about developing their own solutions to a problem that in Africa was never as grave as it was in the West. In Sub-Saharan Africa BioNTech is looking at Senegal, Kenya, Nigeria and Rwanda to ship the so-called “BioNTainers”, but Nigeria, the most populated country on the continent with over 200 million inhabitants, has already announced that she will try to produce its own vaccine.

History is always evolving. With Great Britain out of the EU and France at odds with many of her former colonies, Europe’s old power and influence on the African continent is fading and gradually being replaced by China and many other investment powers that are certainly taking advantage of this particular discord. But while China investments were before accepted almost without conditions, now the African governments and people negotiate harder with Beijing to avoid being unfairly deprived of their precious resources. Ultimately, it is up to African citizens to ensure that their governments are accountable and capable of making the most of these foreign investments for a true development of the continent.

 Matteo Fraschini Koffi for RESETDOC.ORG - March 7th, 2022

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Matteo Fraschini Koffi - Giornalista Freelance