The ninth Forum on China-Africa Cooperation (FOCAC) Summit is underway in Beijing, marking a significant moment in the evolving relationship between China and African nations. This summit arrives at a time when China faces economic challenges and increasing scrutiny over its involvement in Africa. As China re-evaluates its approach, the FOCAC summit serves as a platform to reshape the future of Sino-African relations.
For over a decade, China has invested heavily in African infrastructure through its Belt and Road Initiative (BRI). This initiative has poured over $120 billion into projects like hydropower plants, railways, and roads across the continent, granting China unparalleled access to Africa’s energy and mineral resources while providing a market for its industrial surplus. However, these projects have been criticized for contributing to debt traps, exploitation, and corruption. Several African nations, including Zambia and Ghana, have defaulted on their loans, leading to complex debt restructuring negotiations.
Despite these challenges, China remains a dominant economic force in Africa. The FOCAC summit, the largest diplomatic event hosted by Chinese President Xi Jinping this year, sees leaders from across the continent, including Nigeria’s Bola Ahmed Tinubu, Rwanda’s Paul Kagame, and South Africa’s Cyril Ramaphosa, convening in Beijing.
In response to the economic slowdown and growing concerns, China is shifting its strategy towards public-private partnerships (PPPs). This new approach aims to generate better returns and mitigate the risks associated with state-backed loans. Examples of this shift include a $20 billion iron ore mine and railway in Guinea, a $5 billion oil pipeline in Uganda and Tanzania, and a $400 million cash-for-oil loan in Niger. Notably, Zambia’s President Hakainde Hichilema is expected to witness the signing of a $1 billion investment deal to revitalize the Tazara railway, a project likely to be implemented through the PPP model.
African nations initially sought financing from China due to the limited availability of alternatives, as Western institutions like the World Bank and IMF often imposed stringent conditions on loans. However, the mounting debt has strained national budgets, and many China-backed projects have failed to meet expectations. The COVID-19 pandemic further exacerbated the situation. Zambia’s default in 2020 brought increased scrutiny to China’s role in Africa, and other countries, including Ghana and Ethiopia, are at high risk of debt distress. Angola, with the largest single debt to China at $17 billion, faces particularly stark challenges.
While some projects like the Kafue Gorge Lower Hydropower Station in Zambia have proven successful, others, such as Nigeria’s $823 million Abuja Light Rail project, have faltered. The rail system is barely operational and costs Nigeria $50 million annually in loan repayments. Economists argue that China has learned from these experiences, recognizing that its previous lending practices were unsustainable. Huang Yufan, a fellow at the China-Africa Research Initiative at Johns Hopkins University, told Bloomberg, “They realise the way they lent before doesn’t work anymore. They realise these governments can default and that they’re quite risky.”
China is not retreating from Africa but rather recalibrating its approach. The new strategy, focusing on public-private partnerships, allows African governments to continue borrowing without adding to their officially-declared sovereign debt. However, this shift raises new concerns. Brad Parks, executive director of AidData, warned Bloomberg, “What they’re doing is a lot of creative accounting to still borrow but through much more opaque mechanisms.”
Despite these concerns, many African leaders continue to see China as a vital partner. South African President Cyril Ramaphosa expressed his desire to narrow South Africa’s trade deficit with China, emphasizing the need for favorable terms for African exports. Kenyan President William Ruto is also seeking funding for several infrastructure projects, including the completion of the Standard Gauge Railway (SGR).
The competition for influence in Africa is intensifying, with Western powers and Gulf states seeking to match China’s presence on the continent. The 2022 US-Africa Leaders Summit resulted in $15 billion in deals, but many African leaders still perceive China as a more viable partner for large-scale investments.
As the FOCAC summit unfolds, African leaders will be negotiating not only for immediate benefits but also for long-term stability in their economic relations with China. The summit’s outcome will shape the future trajectory of Sino-African relations, revealing whether China’s new approach will foster sustainable and mutually beneficial partnerships or perpetuate existing concerns.
