Five of the 24 heads of state who attended this week’s Belt and Road Forum in Beijing were from African countries, highlighting the prominent role the continent played at the event.
Many of the themes that emerged from the two-day forum align neatly with key African priorities related to new development finance and greater access to the Chinese market.
Join Geraud, Cobus, and Eric for a lively discussion on the key takeaways from this year’s forum and whether African countries really do stand to benefit from the next iteration of the Belt and Road Initiative.
Show Notes:
- Associated Press: Leaders from emerging economies are visiting China for the ‘Belt and Road’ forum
- Reuters: Ethiopia prime minister: Africa is becoming economic, political and social powerhouse
- Nation: In China, Ruto turns public optics on Beijing by Aggrey Mutambo
Transcript:
Eric Olander: Hello, and welcome to another edition of the China in Africa Podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander, and, as always, I’m joined by China Global South’s Managing Editor, Cobus van Staden, joining us as always from Berlin, Germany, and also with us today, our Africa editor, Geraud Neema, from the beautiful island of Mauritius. A very good morning to both of you.
Cobus van Staden: Good morning.
Geraud Neema: Good morning, guys.
Eric: Well, it’s great to have you both here. I’ve been looking forward to this discussion all week. What we’re going to do today is we’re going to break down what happened in Beijing this week at the Belt & Road Forum and look at the key African takeaways. But before we get into that, and we’re going to do a deep dive on it today, we’ve got some great soundbites, some great analysis from people who were there, and also, I can’t wait to hear what both Cobus and Geraud have to say about it. But before we get started, I also want to say a heartfelt thank you to our followers on YouTube who were extraordinarily generous to us this week. Geraud, Njenga, and myself — and Njenga’s our Africa Climate editor in Nairobi, we kicked off our brand-new video show, the CGSP Roundtable that began on Wednesday.
It’s now available on our YouTube channel @ChinaGlobalSouth. And you can just look for us there. And in the show notes, you’ll see a link to it. And this is the first time we’ve ever done video like this before so we were a little bit nervous. And Geraud, you were just so fantastic. And you remember, we asked our viewers to be nice to us, to not hate on us, and they did a great job, and they were so kind and they were so supportive, and that’s not something you really see in YouTube comments these days. So, it was a refreshing surprise. We’re going to do the show every Wednesday. We’re going to try do it every Wednesday. But maybe Geraud, just tell us a little bit about what the show is and what we’re trying to do with it.
Geraud: I’d like to thank the folks who commented the show, who watched the show. We really thank you for your support and your comment. And as we said, it was really our first experience as CGSP team to come on YouTube to make those show where we talk about everything related to China in the global south. So, as Eric said, we are going to do that every Wednesday where you’re going to have the whole CGSP team. Sometimes it’s going to be me with Eric, sometimes it’s going to be Eric with another person. Sometimes it’s not going to be Eric, it’s going to be someone else, Cobus with Antonia, with Njenga talking about different topic related to China in the global south.
We wanted to have those discussion. And we hope in the future we are going to get live where we are going to receive your question, your comments, where we are going to engage in a very dynamic and lively discussion around what China is doing in the global south. So that’s basically what this Roundtable is and what we expect you to really be connected to us, and give us feedback to allow us to move forward and to really improve our content.
Eric: Yeah, we’ll put a link to that first show in the show notes. It turned out really well — a few technical glitches, but it was a lot of fun. And again, thank you to our YouTube subscribers who, again, were very generous with their comments. Okay, let’s today dive into the Belt & Road forum. This was the third Belt & Road Forum that has taken place since 2017. It was a big deal, and it was a huge deal. And it’s interesting because you saw the coverage internationally and even in Africa. We were looking at the press coverage and it was overshadowed by the events that are unfolding in the Mideast and to some extent even Ukraine, and Biden going to the Mideast. So, there’s a lot of big news that was going on at this time. Nonetheless, 24 heads of state, five of them from Africa, so the prime minister of Egypt, the president of Congo, that’s Congo Brazzaville, by the way, the prime minister of Ethiopia, President Ruto from Kenya, and the Prime Minister from Mozambique.
Five out of the 24 heads of state were African. Nigeria was represented by its vice president. Now, that sounds like a lot, but that’s down considerably from the 37 heads of state who attended four years ago. So again, times have changed. It’s a very different space, but at the same time, it still is a very important event. And Cobus, we were all looking at the Belt & Road Forum for some indication as to what the next 10 years of the Belt & Road Initiative is going to look like. What was your takeaway from that?
Cobus: Yeah. It was very interesting to watch because it was also coming against several months of reporting saying that, “Well, the Belt & Road is over.” They clearly want to send the message that it’s not over and that it’s kind of moving into a new phase, which is essentially a combination of some of its old phases. So, it’s keeping one leg in some hard infrastructure building. So, there were announcements particularly around like Europe to China rail connections and so on. Some of them, I have to say, I’m still don’t 100% understand what they’re going to be, but we’ll see. But then there’s also a strong leg in the small is beautiful, what they now call small but smart, more developmental-focused smaller project kind of field.
So, it was very focused on connectivity, very focused on trade and policy integration, and very future-focused, so including a big focus on AI, for example. All of this is very interesting for me to see. It struck an interesting contrast to the rest of the reporting that was going on in the week, particularly around Israel.
Eric: And Geraud, the BBC and other media outlets reached out to you this week as well to ask you what you thought of the Belt & Road Forum. Let’s not get into too many of the details because I’m going to dive into those with some of the key stakeholders who were there, but when you were speaking to the media and doing those radio and TV appearances, what were you saying in terms of what to look for, especially from an African perspective?
Geraud: From the African perspective, those media, they were much looking into if the BRI had a positive impact or any kind of impact on Africa. So we spoke about different aspect, how the BRI impacted Africa and what Africa is expecting. We also covered the trip of, especially about president of Kenya, William Ruto, who went in Beijing expecting $1 billion for infrastructure. So, we spoke about all those issue and what to look forward in terms of what BRI would become and if Africa will be able to align itself to the small and beautiful. Now we are talking about small and smart. Smart yet and beautiful. So, we talked about all those issue.
And now from African perspective, we really wait to see how, personally for me, to see how African country are going really to align on Beijing agenda to be able to catch up with the financing that Xi Jinping announced the BRI is going to get from the China Development Bank.
Eric: Yeah. So, what we’re going to do today in the next hour, and this is going to be really a great hour, so I hope you’ll stay with us for the entire show, so we’re going to break it down into three parts. We’re going to look at what did they announce, specifically, what came out of Xi Jinping’s keynote address. Then we’re going to look at what some of the key African presidents and prime ministers like William Ruto, as Geraud referenced, what did they say? And then we’re going to focus on some railway news, which is super important. Again, it kind of points to which direction the BRI is going to go in the next 10 years. As we’ve heard, it could go either way right now in terms of the big-spending projects or into this small is beautiful, small is smart, whatever you want to kind of describe it as.
But let’s start with the keynote address. The highlight of the event came on Thursday morning when Chinese President Xi Jinping did deliver the main speech. And he went through in very typical Xi style — a 30-minute address that was bullet pointed and had eight points on it. Eight, of course, being a lucky number in Chinese. A lot of these key points focused specifically on developing countries and their needs. So he talked about expanded access for investment. He talked about ensuring that the Chinese currency is going to stay strong, and he’s not going to do what he called beggar thy neighbor exchange rate policies, which the Chinese, by the way, used to do, where they intentionally manipulated their currency in order to maximize their exports, but that has an adverse effect on poor developing countries.
So, let’s take a listen to some of the key points coming out of the speech from Xi Jinping, and then I’m going to get your guys’ reaction to it.
President Xi Jinping: We will increase the import of goods and services on an even larger scale. China is both a global factory and a global market. We’re world’s largest and fastest-growing middle-income population. China has a vast potential for increasing consumption to meet our people’s ever-growing material and cultural needs and give our consumers more choices and benefits. We will further lower tariffs and remove various non-tariff barriers. We will steadily open Chinese market wider to quality products from across the world.
Eric: So that’s one of those points that, again, doesn’t capture the headlines in the New York Times, but is critically important for developing countries here in Asia, and especially in Africa, that are looking to boost their exports. Cobus, the reduction of tariffs, the greater market access, the emphasis on agricultural imports, that’s all music to the ears of the trade ministers and the export promotion agencies that are sitting in the audience of the Belt & Road Forum. But the main, main takeaway, and this is what I want to get both of your takes on while we talk about the Xi speech, is that he announced a major expansion of development financing into the country’s two largest policy banks — The China Development Bank and the Export-Import Bank of China, known as China Exim.
Each will be getting $47.9 billion of what they called “Financing Windows.” That’s something we have to find out, what does that mean? Because that’s a very particular word. So I’m not sure what a financing window is, but nonetheless, an injection of $47.9 billion to each of the policy banks and another $11 billion will be available to Beijing’s Silk Road Fund. Again, more capital coming into the system that has been increasingly starved. Cobus, that was a pretty big surprise for me.
Cobus: Yes, I was also surprised. That was quite notable. And then there were also, the kind of old school, like the announcement of big logistics corridors that was reminiscent of the mid-2010s, particularly this what they call a multidimensional, I’m not sure exactly what the term is, but like a multidimensional logistics like route between China and Europe, like across Eurasia. What I was also, again, not sure what exactly we’re talking about there, but it sounds very impressive.
Eric: Yeah. And that’s a lot of what we heard are these big grandiose promises. But Geraud, I think we’ve been trained to become a little bit cynical about big-number promises. You remember at the U.S.-Africa Summit in December, they said $55 billion. Well, very little of that money was new money, it’s recycled money, and we don’t quite understand what this $100 billion of new financing is and what the words “Financing Windows” mean, their technicalities. Because the big problem in Africa today is that more money coming into the system is a good thing in one sense, but it’s also a bad thing in another sense because of the debt sustainability problems.
Geraud: Yes. You are really raising a good point there. That’s why I was mentioning at the beginning that my question will be how much Africa will be able to capture that fund that have been made available right now? Because let’s face it, as AidData reported last year that the last two years, Africa received only less than $2.2 billion from Chinese loan. So, it’s kind of now we are going to have to see how much we’re going to be able to capture from that fund because that’s the big question. Because I believe that so far, a continent like Southeast Asia or Latin America are going to get the bulk of it. Africa is facing a very difficult situation right now where you have massive loan that needs to be reimbursed. You have very difficult economic situation. So, my worry is about, are we really in that place where we’re going to be able to get something from it? Are we just going to get some peanuts? I mean, some very small project, targeted project with not really massive influx of financing coming from China. So, this is, as I was saying before, the question will be, how much Africa will be able to align itself to China’s priority and to get a bulk of that financing?
Eric: Well, Let’s get a perspective from somebody who was there inside the halls listening to the conversations, not only in the main venue with Xi Jinping but also over the coffee and tea sessions on the side there. And that’s really important where a lot of the discussion was going on. Our old friend, Kevin Gallagher, who’s the Director of the Global Development Policy Center at Boston University, he’s one of the top economists in the world focusing on these issues of Chinese development, finance, and debt. He also was one of the very few Westerners that was participating in this year’s Belt & Road Forum. That was noted by a lot of people, how few people from U.S. and Europe were there compared to previous years.
And I had a chance to speak with Kevin for just a few minutes in between his various sessions and just to get a take of what was it like, what were people saying? Let’s take a listen now to my discussion with Kevin Gallagher.
Kevin Gallagher, thank you so much for taking time out of your very busy schedule to join us from Beijing.
Kevin Gallagher: It’s great to talk to you again, Eric. How are you doing?
Eric: I’m doing great. The vent is wrapped up. It was a hectic past couple of days. Give us your big takeaway from the Forum.
Kevin: Well, it was quite an opportunity to be able to be there firsthand. I was actually in the Great Hall for President Xi’s unraveling of his or unveiling, I should say, of the new eight-point plan for the next decade, and saw the speeches of some of the big heads of state there at the Great Hall. And then I spent the second half of the day where there were thematic major events. I was part of the green development, which is one of the eight planks of the new plan, and a number of heads of state were there, as well as finance ministers and environment ministers. And what I was struck by the most, I guess, is beyond the headlines and beyond the big fanfare of the big four conversations or speeches from heads of state in the beginning at the Great Hall, is that all the conversation was much more practical and about infrastructure and connectivity.
You had heads of state and finance ministers and environment ministers thanking and praising the first decade of the BRI and wanting to get in on the next decade even more. They expressed that they need more infrastructure, they need more financing, not the way we often see it sometimes when we’re just looking at this stuff from the outside.
Eric: Yeah. You and your team at the Global Development Policy Center have been writing for much of the past year about this new small is beautiful era of Chinese development financing, and that is this smaller connectivity, green tech, and yet President Xi, he announced $100 billion pledge to the Belt & Road. So that seems a little bit incongruent to me. What was your reaction to that pledge?
Kevin: Yeah. I was struck especially given what’s going on in the Chinese economy and the relatively limited ability of developing countries to absorb new finance. But just as he did at the very first Belt & Road Forum, he has injected major capital infusions to the two, now three, I guess I would say, the three big sort of flagships of the BRI. He pledged new capital or new financing. We’re not quite sure right now for the China Development Bank and the Export-Import Bank of China, which is about $50 billion each, about 80 billion renminbi or about $10 billion of new capital for the Silk Road Fund. So that implies that leveraging that, we should see more of an uptick in new finance moving forward. And so that contrast with some of the conversations about small is beautiful. In conversations with friends here, we’ve been told that the small is beautiful is a little bit more the track for the GDI and some of those initiatives, and that the BRI may snap back to be bigger, and let’s hope it’s bigger and better.
Eric: Yeah. Well, that’s very interesting. That’s a level of nuance that I don’t think we’ve heard before. So, that’s very helpful to understand. Finally, very quickly, because I know you have to get going, we saw all the speeches and we read all the headlines and we saw the Putin handshakes and the big takeaways. And you mentioned that in your conversations with some of the folks from Central Asia and from some of the other regions that there was a very different narrative than what we saw in the media. And I’m curious just to hear about what was the buzz in the room when you were on your coffee breaks and in the hallways, what were people talking about?
Kevin: Yeah. It’s not surprising that, given what’s going on in the world, what the global, especially Western take has been on it. And China shouldn’t expect much more given the fact that that’s how they staged it. But it stands in stark contrast with the conversations in the room. Everyone’s talking about new connectivity. China unveiled just parades of new smaller initiatives. I think the one that is really being missed on the headlines, which really might do wonders combined with all this new capital infusion from the China Development Bank and the other big institutions, is that China unveiled something called a JETP, the Chinese answer or complement to the JETP. The GIFP stands for the Green Innovation Finance Platform, which is a platform so that they can help make green and bankable projects for developing countries under the BRI and then work with Chinese financial institutions to tailor each project with the right amount of debt and equity and grants and so forth to make sure it’s truly bankable, and it helps both the developing country and Chinese balance sheets.
And so this is, I guess in some level, a small as beautiful or maybe a big as beautiful approach where you see China knowing that they need to do a little bit more due diligence moving forward the next decade, especially under the new context of higher for normal interest rates. It can’t just be debt for countries, but the demand is there on the sidelines and in the copy, everyone’s talking about the new roads that they need, the new rail that they need, the new power plants that they need, but this time they want them to have more due diligence when it comes to debt and environmental impact and want clean energy rather than coal plants. And mechanisms like this are clearly China trying to treble the next decade to make sure that the host countries have that kind of due diligence in there so both the host country and China doesn’t take a bath on some of these projects.
And so that’s just one example of a lot of other concrete things that got rolled out, which, unfortunately, because of the way that they staged the whole thing, those stories are going to trickle out much more slowly. But at the coffee tables or tea tables, I should say, here at the convention, it’s amazing how different the conversation is. It was sort of appreciative that there’s actually real money out there that they don’t feel like they’re getting in other places in the international system and just wanting it to be better and more troubled and certainly not wanting it to stop.
Eric: Kevin Gallagher is the Director of Boston University’s Global Development Policy Center. Kevin, thank you so much for taking the time on a very, very busy day for you, and safe travels back to the U.S.
Kevin: Thanks so much, Eric. Talk to you soon.
Eric: Cobus, a whole lot to unpack there in what Kevin said. And again, lots of nuance that we didn’t pick up in any of the media coverage about what was actually going on. One of the key takeaways for me was the fact that this appreciation for capital into the system, which is in such short supply. What was your takeaway from Kevin’s comments?
Cobus: I was very struck by the general kind of shift towards green development, which, of course, we’ve seen for a long time coming in the BRI, has slowly been shifting in that direction for a long time, but it really is a centerpiece of it now. And these new funding mechanisms that he mentioned, specifically targeting green development also happening at the same time as the G7 and then is spearheading Just Energy Transition Partnerships with a lot of developing countries, it’s very interesting. It’s like renewable energy is becoming this field, field for competition. It’s almost a geopolitical field for competition. And that’s an interesting development for me.
Geraud: Yes, that was really interesting when I was hearing Kevin comments, and I was even going through Xi Jinping keynotes, I was really struck by the fact that when I just typed just to search keywords like green, it was really surprising that the word green came out like 11 times in keynote speech. Just highlight you how much the BRI is changing, shifting toward that green and that, as they call small yet smart project, where they want to show that the BRI… They want to move away from the criticism they’ve been receiving over the last 10 years — pollutions and debt issues and everything. Now they want to really show that they’re moving toward that partnership where they present themself as a reliable partnership for the future. And it was really interesting when you read the whole keynote, you have that sense of China really, when you take into account the BRICS Summit in August, you take to account the GDI, the different, the various initiative that China has been taking the last two, three years.
You now take the BRI 2.0 that it presented a few days ago. You really have that sense that China is shifting the discourse toward a new or a parallel, I would say, global order, which kind of put his term, where he really want to move forward his own agenda, where we even saw China talking about AI development and the norm of AI. You can really see that shift where the BRI, the GDI, all those initiatives are going at some point to become, I don’t know, maybe one single initiative where China is moving towards shaping the new international order.
Eric: Yeah, it’s interesting because you say that, Geraud, and all of that enthusiasm among the attendees and in global south countries for these initiatives that China is doing. And yet when you look at it from the Japanese, South Korean, European, and U.S. perspective, the G7 perspective, all it is, is very cynical. And so we’re still in this… We don’t know which way things are going. And I just want to end our discussion here on the kind of direction of the BRI before we get into this Africa specific themes with some comments from Richard McGregor, who is really one of the great China watchers of our time. He’s a Senior Non-Resident Fellow at the Lowy Institute. He’s also a longtime journalist in China.
He’s written one of the definitive books called The Party on the Communist Party in China. And he was speaking with the folks from CNBC and asked to reflect as well. And again, he talks about this transition between the old BRI and the new BRI.
Richard McGregor: Well, I guess it shows, first of all, the enormous convening power that China has to get such a bunch of people at a time of war in many places over to China. But in my view, generally, this meeting is sort of backward-looking and forward-looking. It’s backward-looking in this respect, the BRI, as we know, is basically over, and we are moving into a new era these days where we are getting, as Samantha said, it’s smaller quality over quantity — that’s talk about making a virtue out of a necessity. Most of the countries that China has lent to can’t borrow anymore, so they’re not going to do big projects. And China’s issue now with many BRI countries, you look at Uganda, Zambia, Sri Lanka, Laos, some islands in the Pacific, is how to pay the money back — not to borrow more money. So that big part of the BRI is over. And BRI lending has been going down since about 2018 actually. And we’re now moving to a new era where China is putting its ideas for an alternative world order on top of what it’s done with the BRI, Global Development Initiative, Global Security Initiative, and the like. And you see that in the meeting in Beijing at the moment.
Eric: Let’s keep that in mind now when we hear from a couple of the African leaders who participated in the event, first we’re going to hear from Kenyan President William Ruto. And again, for him, this question of the finance was absolutely essential. And President Ruto was really there, and he wore two hats this week. Number one, his hat was as President of Kenya. Number two, his other hat was as the chief salesman for Kenya. And he was just closing deals left and right. But let’s take a listen to his address to the Belt & Road Forum audience. And again, you’re going to hear what he focuses it on, and I’m sure he’s speaking on behalf of a lot of African countries.
President William Ruto: And let me say this that China has a special place, with no doubt, to enhance the competitiveness of Africa by doing two very important things to us in the global south and especially in Africa. Number one is for China to work with us in the reform of the international financial institutions so that we can leverage on these institutions and use China’s muscle to invest more in those institutions and to work with us in its reform so that countries in the developing world can access more concessional development financing to lift the huge burden on many African countries of liquidity that they experience at this point in time.
We want to thank China for China’s willingness to invest in our regional multilateral development banks — the Africa Development Bank, Africa Exim Bank, Trade Development Bank — to facilitate Africa’s growth and development initiatives. And I want to use this forum to thank the Government of China for that consideration. China’s immense knowledge and capabilities in renewable energy will go a long way in ensuring that we unlock the huge potential of renewable energy assets in our continent and investments in green manufacturing, green industrialization. And I, again, want to take this opportunity to thank the Government of China for its commitment to invest in industrialization in our continent, in modernizing agriculture in our continent, and in also working with us on the development of human capital and matters talent development in our continent.
Eric: Cobus, there you have it, the two points from President Ruto, that green theme came back very strong, but also was very interesting, if you listen to him very carefully, on his comment about the international financial system. And you pick up that grievance, that sense that this system is not fair. And what I have been surprised by is the fact that the Europeans, the Americans, and the Paris Club have been so adamant in refusing to make the concessions and the reforms to satisfy someone like President Ruto. And the fact that President Ruto now is looking to China to use, what he said, use their muscle to force these changes for developing countries, that really, to me, was a big standout.
Cobus: Yes, it’s very interesting. And it’s also an indication that, I think if you listen to European and U.S. stakeholders at the moment, in the first place, they’re not going to be mostly talking about development finance at all. But when they do, the general consensus is, “Well, these are very tough and constrained times. We are basically at the max of what can be achieved. So, hold on, basically.” And of course, in African countries and other parts of the global south, they can’t hold on because they’re facing a demographic bulge, which could have very big destabilizing effects if, if it’s not wielded well.
And also for them, it’s not three separate things. Climate, energy, and debt are not three separate things for African countries, despite the fact that in the global north, people tend to think of them in these siloed ways. They are a triangular nexus that all affect each other all the time and that play on the back of the demographics of these countries.
So, there’s no waiting in Africa for around these things because they’re so urgent. And the fact that everything is then couched around, “Well, they already have so much debt, how much more debt can they absorb?” Which, on the one hand, it’s understandable that it is couched that way, but it’s also extremely destructive that that is the only lens through which it could be seen. Because if one doesn’t deal with these problems now, they’re going to be much bigger problems in the future.
Eric: Yeah. Geraud, so he used the words Kenya and Africa almost interchangeably. And in many ways, because there were only five African leaders attending this forum, many of those leaders did speak on behalf of the continent. And I’m kind of curious if you thought that what Ruto comments were, they were certainly applicable for Kenya, but do you think that they were also relevant for other African countries as well?
Geraud: No, that’s really interesting because the first part of his speech, it’s close, word by word, to words Hakainde Hichilema, President of Zambia, said a few months back during the BRICS Summit, at the close of the BRICS Summit when he was saying that, “We call upon China to help reform the international financing system and all, and everything.” So, those grievances, I believe, are shared by many African countries, especially those who owe, I’d say a significant amount of money to China or they have a significant debt issue to resolve. It was really interesting for him to mention that when you see how China’s been behaving through the crisis in Zambia or in Ghana and everything, where you saw how, in this show, we’ve been speaking about how China was using those, the case of Zambia, to push for the reform for the international finance. That it was not fair to Zambia because Zambia was paying the price and everything.
But here, we see we William Ruto taking a taking a pathway where he really say, “We want to leverage China. We really want to leverage China to help us reform the internationally financial system.” So, when I see that, I was like, hmm, that’s really interesting because in the coming month or year, if Kenya finds itself in a same situation that Zambia find itself, will Kenya be ready to step aside and let China use its case to make a point to reform the international financing system? So, that’s really something to looking for in the future. So, I do believe, yes, he was sharing some grievances that can be shared across many African countries. And yes, I think it speak a lot about what many African country believe. For the rest, I do believe that other issues are much more pressing now that African country still need much more financing in terms of financing development in the green technology as well.
Eric: Well, on this issue of debt and Kenya and Ruto and what he was there, part of the talks that he had with President Xi Jinping were dedicated to whether China, and the China Exim Bank in particular, will restructure some of the estimated $6 billion of outstanding debt that the Chinese still have with Kenya. The Kenyans have been struggling to repay that debt in part because of the devaluation of their currency. That debt is priced in dollars. Also, at the same time, the Kenyan economy is facing higher inflation, unemployment is up, and debt levels are up. So, the Kenyan economy is facing a lot of stress. The Chinese have been, surprisingly, and I say this because they’ve been flexible in a lot of countries, but with the Kenyans, they’ve been hard asses.
And it’s really quite interesting to watch that after a six-month debt deferral in 2021, while we were still in the pandemic, the China Exim Bank refused multiple requests by the Kenyan government to reschedule some of that debt. Those conversations happened this week in Beijing. We do not know what happened, but that is something to look out for in the future. Let’s talk very quickly now about Ethiopia. And boy, it really looked like Prime Minister Abiy Ahmed had a great time in Beijing. And when you look at all the handshakes that President Xi did with all the various leaders that came forward, most of them were just kind of that formal diplomatic protocol, very serious. They kind of walk up, there’s a little bit of a smile, and then, okay, on you go, next one. And if you look at the videos of the Ethiopian Prime Minister, first of all, Chinese propaganda did this whole cool thing when the state media, he was walking into the room to meet Xi, and then they did a slow-mo version of it.
So, he just looked like a baller walking in. It was really quite, really remarkable. But then the picture of Abiy walking up to Xi was… He just was smiling. He put his hand on Xi’s back, and they were really kind of gunning the handshake a lot. And it just looked like they were really happy to see each other. It was quite remarkable. You got to go take a look at it online. It looked different than the others. And it really shows, in many respects, that the investments in time and resources, diplomatically, that the Chinese had been making in Ethiopia over the past five, six years are really paying dividends. And the relationship between the Chinese and Ethiopians is rock solid. And let’s take a listen now to some comments from Prime Minister Abiy in his address to the Belt & Road Forum.
Prime Minister Abiy: With a rapidly growing population, the African continent is in high demand of sustainable and dignified development. And through BRI investments, many jobs have been created and livelihoods improved. Road and railway projects are linking previously unconnected places. People-to-people relations are being enhanced, both within and across countries. The principle of connectivity inherent in BRI has also offered African countries with alternative source of capital, technology, and skills needed for our modernization agenda. In my country, Ethiopia, for example, one of the remarkable BRI accomplishments is the construction of Africa’s longest-electric transnational railway, which runs through Ethiopia all the way to Djibouti.
The line revitalized local and regional economies. It plays a critical role in connecting people and enhancing efficiency in the logistics value chain along the strategically significant Ethio-Djibouti Corridor. Excellencies, ladies and gentlemen, once a source of raw materials, Africa is now realizing its potential and capacity. A continent that has been sidelined until now is harnessing the demographic dividend, leveraging its natural endowments, and rapidly becoming a global economic, social, and political powerhouse.
Eric: I really liked that speech for a couple of different reasons. One is it’s very easy right now to be negative on Africa as a continent. The coups that have happened, the corruption scandals, the economies that are struggling, the sense of dislocation from the international system, the disengagement from the West in Africa in many respects that they’re isolated from it in many respects. And here we have this different point of view that says, “Contrary to all the crap that you hear out there, particularly in the Western media that looks at the negatives, there is this really positive story about Africa and its demographics.” At the same time, there was a phrase in there that just really stood out for me — “dignified development.”
That is powerful stuff because there is this sense that the charity and the aid of the past 50, 60 years has been demoralizing and it hasn’t worked. And we remember from a, I think it was two years ago that French president Emmanuel Macron in Montpellier, held a forum with young, well, French-speaking African youth leaders, and they just ripped him that they are fed up with the paternalism, they are fed up with the lectures, and they want that dignity. And I think the fact that he highlighted this idea of dignified development, to me, was very powerful.
Geraud: Yes, it was very powerful. It speaks a lot about how Africa has been feeling about development aid or development financing coming from the West, and especially when they’ve been attached to several conditions, structural conditions, reforms that many have deemed to be an intrusion to African sovereignty and asking them to reform so many issues. So, yeah, when he speaks about that, he really speaks to the core of the idea of the Chinese approach to Africa, where we come and say, “We’re going to help you. We’re not going to change everything. We are not going to tell you to change things before us giving you money and before us giving you aid, any loan or investing in your country.” So, I think that sentiment, it’s a very legitimate sentiment that many have been sharing. It’s even the same sentiment that you can kind of feel in the William Ruto speech when he was talking.
And the same theme also come in in Abiy speech when you really see that they’re presenting China as an alternative somehow to development finance. That the financing that China is providing to Africa is different. The approach that China is offering to Africa is different. And this is a common theme that you’ve been hearing from different head of state in Africa. I think this is where many people in the West, they just don’t listen, they don’t really pay attention to what Africa is expecting and what they want in the cooperation in their project they have with the West or with any kind of country. We want more respect, we want more dignity. We want to be heard. We want to s we want to be able to tell you that the way we do things are different from yours and we should have a different approach.
But on the other hand, on the other hand, and this is where I’m going to play the devil advocates, on the other hand, when you are a Western country, when you’re the IMF, the World Bank, you have the feeling to say, “Guys, you don’t want to reform, you don’t want to change things. But when we look at the consequences on how you manage your debt and your financing issue, especially when we see the consequences of the debt situation you find yourself in, we cannot just pretend that there is no need of a certain level of structural change or reform that necessary for you to have a much better development.” And this is why I think we should be more coherent in a way to approach that development issue and that debate with China or the way we want to leverage China with the rest of the international community.
Eric: Cobus, it’s so interesting to reflect on what Geraud is talking about in terms of the discourse and how different it is. And I’m not going to say one is better than the other because I think there are strengths to both and weaknesses to both. But the discourse that we heard this week among African stakeholders in Beijing at the Belt & Road Forum is so different than the conversations that the U.S. and Europe have about Africa. And again, they have this totally different historical context that they’re talking about this from. So we got to take that into account. But if you weren’t paying attention to this, you would never know that there’s this parallel more uplifting discourse that’s going on in China.
Cobus: Yeah, absolutely. Like, what was interesting for me was the general kind of like tone of futurism and optimism struck by China. And of course, a lot of more cynical observers of the Belt & Road will be like, “Ah, well, it’s just a lot of hot air,” which is sure. I mean…
Eric: Certainly, there’s legitimacy to that complaint too, by the way.
Cobus: There’s always a lot of hot air in these kind of discussions. China loves putting out a phrase and a big plan. But it is interesting in the sense that there is really very little kind of future-looking coming from Western countries at the moment. There’s very little overarching… an overarching vision of what some kind of future might look like. There was a little bit around Global Gateway, a little bit around PGII, and other infrastructure initiatives. Those have largely — not fallen by the wayside — that Global Gateway is certainly still running, but the energy around discussing them has diminished because they’re dealing with all of these very immediate issues at the moment.
Particularly in the context of the conflict in the Middle East and in Ukraine, there is a feeling that the field of attention in the West is very narrow at the moment. And it’s retreated back into very kind of core concerns for Western countries and core relationships for Western countries, and only really focusing on their own borders or on their own immediate issues. And that the rest of the world is there, but there isn’t a lot of oxygen to pay attention to, to the rest of the world, and particularly how all of these other countries around the world that are not in that particular crisis focus at the moment, how the rest of them are all going to get through and have an okay future. There’s zero attention to that at the moment in the Western imagination. So, in that context, suddenly China being like, “Hey, let’s all think about the future. The future’s great, a golden age.”
That plays so, almost jarringly compared to the mood in Washington and Europe at the moment. So, it’s quite striking.
Geraud: I think it’s really interesting what Cobus said. You have the feeling that the West has no dream of the future anymore. They don’t have the ability to sell the dream, to take the global south to say, “This is where we are going.” When you look at a different issue in the global north right now, you have immigration, you have that tendency now to close border, where China, in this… When Xi Jinping in the discourse was talking about opening more borders, integration, people coming in. Europe, they’re facing so different social and different issues than now, right now. And they don’t have the bandwidth of a new dream to sell to the global south. And China is still there to say, “I still have a long way to go. I still have many things to achieve. So in that, in my path to development, I think I can take you with me in that dream of the future.”
And I think, without even saying it, I think China is kind of instilling the idea, “With me, there is a different future, a future that’s possible because we still can move forward.” And Europe and the West, it’s reached that level of, say, after tomorrow, what they’re going to bring on the table — AI, new technology, yes, but it seems to be not enough. There is a lack of substance in terms of like what we want for the future of humanity tomorrow. And the West is on table, at least now in that crisis, of not being able to provide it.
Cobus: Sorry, Eric, to interrupt, I would go further and say they definitely don’t have any vision that they can really sell to the global south, but they don’t seem to really have even any vision that they can sell to their own people.
Geraud: Exactly.
Cobus: There seems to be such a lack of hope in a lot of global north countries about what the future’s going to be, particularly maybe in the U.S. because there is this big scary and contentious election coming, and the two leaders running for it are both old. So, there isn’t a strong, the kind of future orientation feeling at the moment in the global north. Sorry, Eric, I interrupted you.
Eric: Yeah, no worries. And just to be fair as well, and Cobus, you’ve mentioned this, that the Chinese do oftentimes put a lot of promises out there. Remember that they promised a billion dollars of vaccines to Africa that never came through. They promised $300 billion of trade between African countries and China. That, too, is not going to materialize. And so I think there’s a little bit of grain of salt that we need to throw to some of these numbers. That doesn’t take away from any of the optimism that you’re talking about. But again, put a skeptical eye to some of these promises. And by the way, that’s true in all governments, but in particular here, that there’ve been a lot of unfulfilled pledges made by the Chinese over the years. So, we’ll have to see if the details match up to the rhetoric specifically on that $100 billion.
And Cobus, one of the things that I was thinking about was the domestic politics of this, that $100 billion into the policy banks because if I’m a Chinese taxpayer sitting in Zhejiang or Gansu or Guizhou, where local governments are facing debt crises, youth unemployment is very high. $100 billion is a lot of money today, even for a country like China, that’s a lot of money. Not surprisingly, there was no mention, as far as we could see, of that $100 billion announcement anywhere in the Chinese press. And that is typical for these kinds of announcements where they don’t talk about these foreign pledges domestically. So, I think it is potentially a politically sensitive issue to be allocating so much money for international development when a lot of provincial stakeholders are like, “Hey, we could use that money at home.” So just also something to think about.
Let’s now look at two different case studies here of what happened with Nigeria and Kenya related specifically to railways. So, Nigeria was represented by Vice President Kashim Shettima, and the news that came out of the VIP’s visit was that there was a deal on railway funding. And if you recall from our discussion over the years, the Chinese have backed out of a lot of the pledges that they made to finance Nigerian infrastructure development, specifically about $14 billion of railways that they pledge to finance. Also the AKK pipeline, which is a billion dollar pipeline. And so there’s been a lot of uncertainty in the Sino-Nigerian space. Let’s take a listen now to news coverage of this announcement from TVC Nigeria.
Speaker 8: President of the People’s Republic of China, Xi Jinping, has pledged commitment to refinancing and completing of the Abuja-Kano and Port Harcourt-Maiduguri railway project in what the president describes as a major milestone for Nigeria at the ongoing Belt & Road Initiative Forum in Beijing. The Chinese leader said this while responding to requests made by President Bola Tinubu, who was represented by Vice President Kashim Shettima at a bilateral meeting with a Chinese leader in Beijing. Since the launch of the projects, China is yet to release funds for the two major railway projects in Nigeria, largely due to cutbacks and other commitments, after agreeing to provide 85% financing for the construction.
President Jinping promised that China will enhance political support and build cooperation in all fields. Vice President Shettima described the real projects as very vital to the president and people of Nigeria.
Eric: Let me give you a few details now on these two railway projects in particular. So, the Abuja-Kaduna Railway is a $604 million project. The China Exim Bank would provide $500 million of that. According to AidData, the loan is set for a 20-year term. There’s a seven-year grace period at 2.5% interest rate. That is a classic Chinese concessional loan there. So that one seems manageable. $500 million, not huge. Then we go to the Port Harcourt-Maiduguri line, which is a whole different project. This is a $3 billion railway. The China Exim Bank would provide $2.5 billion of this railway funding. So that is a big project. Now, let’s put that into context. We’re talking now about $3 billion of new debt that would be put onto the balance sheet of the Nigerian government. Right now, Nigeria has $113 billion of total public debt.
The Chinese account for just 4.7 billion of that debt, so about 3%. So, the Chinese are not a major creditor for the Nigerian government, contrary to what we see in the Nigerian press where the debt trap narrative is fertile ground there. Lots of discussions about the debt trap, ridiculous as it is. However, let me just give you a context, and I’d like to get your both of your reactions here. Nigeria, as a whole, has a debt to GDP ratio of just 37%. So, that’s well below the 50% threshold that the IMF likes to see. The problem is, and Cobus, this is the thing that we all have to keep our eyes on, and it’s not just in Nigeria, but it’s in other parts of the continent as well, 73 cents out of every dollar that the Nigerian government generates in revenue, goes to debt servicing costs mostly, by the way, to private creditor debt and Eurobonds — 73 cents.
And by the way, the Bretton Woods institutions also have a large share of that as well. So now we’re going to be talking about adding $3 billion more for these railways, which would put the debt up to $116 billion and force that amount of revenue to debt servicing even higher. I don’t understand how this math works. What’s your take, Cobus?
Cobus: Yeah, no, absolutely. I have a lot of questions, particularly, as you say, how this is going to fit into the Nigerian calculations, but also whether the Chinese are really willing to commit to these big contracts in Nigeria. Building big railways internationally is already a big ask. Building them in Nigeria is, additionally, not simple. That I also wonder about. But yeah, obviously for them, the amount of debt is one issue, but the other issue is issues like, for example, increasing local tax generation, and so on. There’s possible ways of increasing the amount of revenue that the government is pulling in, but they haven’t been increased yet. So, the question is literally, yeah, as you say, it’s like, how are they going to pay that debt and still have social services running?
Eric: I don’t get it. I really don’t get it. But now, in Kenya, it’s a slightly different story here. William Ruto went to Beijing with a very different agenda, and it’s also very important to note that there have been numerous instances in the past where the Nigerian press and many African media have misinterpreted conversations with the Chinese. And Geraud, we’ve talked about this on a number of occasions, where the Chinese will use language that says, “We support Nigeria’s development, we support Nigeria’s transportation initiatives.” And then the vice president goes, “Great, you’re going to sign up for this, this, this, this.” And the Chinese, they don’t say anything to publicly deny it.
And what ends up happening is there’s a misunderstanding that oftentimes comes out of these conversations that says, “They’ve committed to these projects when they actually haven’t.” I’m not saying that has happened here, but it has happened quite a few times in the past.
Geraud: It’s interesting that you mentioned that because, while you were speaking, I was like I want to read the official statement from the Chinese side because it’s not only Nigeria, though, many African country have been doing that when they go to China. They come back and they just use a portion or a certain wording of the initial statement of the statement that come after the meeting to really to spin off their own narrative internally, because you have to face it, those head of state, when they go to China, it always has a certain political agenda back home.
So, when they come back home, they cannot just say, “I went to China and I came back with nothing.” They have to go, “I went to China and I came back with something, a billion dollars or something.” So, since China is not into the business of contradicting it’s African partner or any of its partner publicly because of the statement they’ve made, it’s like, it just remains like this. But the problem of those kind of rhetoric is the fact that at home, people now start to build expectation toward China. And when those things are not met, it’s easy to blame China. Like, “China’s promised this, but we never saw that happen.” But when you look at the beginning, it’s like China never promised something like that to happen to begin with. So, I don’t know if this is the case in this situation right here, but we should really be careful into what African leaders are saying usually when they come back from China, and to read much more into the statement that have been issued out of those meetings to really know really what China is committing itself to.
Eric: Well, let me read you from the statement of the President of the Federal Republic of Nigeria on October 18th. So, they did not waste any time, on Wednesday, right after the meeting between Vice President Shettima and the Chinese, they went and published a statement. And a couple of things stand out. So, here’s the headline, okay? Here we have it. “At 3rd Belt & Road Initiative Forum, China commits to refinancing, completing Abuja Kano, Port Harcourt-Maiduguri railways.”
Geraud: That’s a large word — commits.
Eric: Commit. Okay, there you go. There’s some flexibility in there. And then they… Somebody’s got to talk to the presidency’s office about Chinese names, okay? They say, “As President Jinping pledges more investments in Nigeria’s power generation.” This is official presidential seal statement, okay?
Geraud: Those small things, I don’t know. Go ahead.
Eric: That is sketchy here. Okay? So, that’s like saying “President Joe,” Joe Biden.
Geraud: Exactly.
Eric: Okay. But so anyway, so here they are… “The President of the People’s Republic of China,” by the way, they didn’t spell that correct either, “Xi Jinping, made the pledge today while responding to requests made by President Bola Ahmed Tinubu, who was represented by Vice President Kashim Shettima at a bilateral meeting with the Chinese leader in Beijing.” That is unequivocal. So, to your point, Geraud, we should probably wait to see what the Chinese say on this, or more importantly, whether the financing actually does come through. What they did in Nigeria over the past several years was they just ghosted the Nigerians. That’s what they did. They didn’t say anything. I remember they just kept silent. So, remember the former Nigerian Transportation Minister, Rotimi Amaechi, he kept going before the House of Representatives and saying, “Yes, the Chinese money’s coming. Just wait, the Chinese money’s coming,” and it never came.
And it doesn’t sound like the Chinese actually ever said to Amaechi, “Guess what? It ain’t coming.” He just had to figure that out on his own. There is a very interesting domestic dynamic to this as well. And the president is under pressure from the House of Representatives. The Speaker of the House of Representatives, Abbas Tajudeen, just on Thursday, he sounded the alarm over how much Nigeria is spending to service his debt. So, there is domestic political pressure on the president, maybe not to add to that debt. So, even if the Chinese say, “Great, here’s your 4 billion bucks,” it’s not entirely assured that the House will buy into that because there are real concerns about debt servicing. Let’s now move to Kenya. President Ruto, he was super busy. He hit the ground running. Actually, Geraud, he hit the ground on a bus. And we talked about this on the Roundtable show.
Geraud: Yeah.
Eric: President Ruto, as far as we can tell, was the only visiting head of state who did not have a black limousine waiting for him. Not sure why it was. He took the COBUS bus. Cobus, not named after you, but you know, at the airport they have those buses and they say “COBUS” on them?
Geraud: Yes, the COBUS bus, yeah.
Eric: I always think of you, Cobus, when every time I see those buses. And so here we have, try to picture this, President Ruto pulling up on the same bus that you and I take when you don’t get a gate at the plane, you have to go take a bus to go out like somewhere on the tarmac. And he got off one of those to a military honor guard. And you got to think, they only had 24 heads of state there, Geraud. They didn’t have a spare Audi anywhere? I don’t know. I thought that was… I think that was weird.
Geraud: There was a two part of his arrival here. There was a part where he came out of the plane and took the bus and he had honorary guard and outside there, I think he got a car later on to-
Eric: He did get a Hongqi car after that. But still, they photographed him on the tarmac.
Geraud: So, the optics are just not good. I’m like, why they would do that? I mean, for me, it was the big question why they would do that.
Eric: I don’t know. But I thought the optics, though, of him flying Emirates was fantastic, okay?
Geraud: He could have taken Kenya Airways, though.
Eric: He should have taken Kenya Airways, but he flew Emirates. But the idea that he didn’t come in on some small private jet when his country is drowning in debt. I think the optics of that looked very, very good.
Geraud: True.
Eric: However, other people told me that that’s not a good way of looking at it because the entourage was so large, okay? That they filled up a A380, and that’s why they took the A380, that it was so bloated with people. And that is not a good optics. But okay, let’s take a look at what Kenya President William Ruto did. He signed $422 million of deals in the ICT, pharmaceutical, the agricultural sectors. He really was super busy on the business side of things. He called himself the salesman in chief. He went to Huawei, he gave a glowing endorsement of Huawei. And he had two main agenda items that we were following before his trip. Number one was that debt restructuring we talked about, and the other one was to secure a billion dollars in new loans from the Chinese for road construction projects.
And in order to understand this, you have to understand the domestic situation in Kenya where the country is apparently riddled with half-finished roads that are now causing a lot of problems because of accidents and deaths. And local politicians are saying, “Enough, Mr. President, you’ve got to finish these roads.” A lot of the roads are being built by Chinese contractors, but they’re just Chinese contractors who depend on the financing to come from the central government. And a lot of that came from the African Development Bank, it came from other lenders, not just the Chinese, but that lending and that money dried up. So they had to stop these projects halfway through. We do not know what happened about those talks for those loans.
However, he threw a surprise on us related to the Standard Gauge Railway, and he made this announcement at the Kenya China Investment Forum that happened on the sidelines of the Belt & Road Forum. And let’s take a listen to his new dream for the Standard Gauge Railway that China already built for close to $6 billion.
President William Ruto: The reason why we are discussing with China on extending the standard gauge railway beyond Naivasha into Uganda, into DRC Congo, all the way to Congo Brazzaville is because we want to connect the eastern coast of Africa to the western coast of Africa using the SGR. We’ve had conversations with the president of Uganda, with the president of DRC, with the President of Congo Brazzaville, and we’ve all agreed on the need to extend this piece of infrastructure as a means of facilitating trade across our continent, and making sure that companies like yourselves who set up in Kenya not only have access to the Kenyan market but have also access to the East African market and the continental market because we have made the decision that art is the way to go. As we look at the 1.4 billion people in China, we are equally looking at 1.4 billion people in Africa, and we want to connect.
Eric: So, if this dream sounds familiar, it is familiar. This is what, in the old days, was called phase 3 of the standard gauge railway. Now, phase 1 of the railway went from the port of Mombasa to the capital in Nairobi. That was built by the China Road and Bridge Corporation for $3.6 billion. Then there was phase 2a or phase 2 that went from Nairobi to Naivasha. Now, part of the original plan for the standard gauge railway was that it’s supposed to go from Naivasha in the Rift Valley, as the president said, all the way to the borders with Uganda, and eventually into Rwanda and to other points in East Africa. The Chinese said, “You know what? This isn’t working. It’s too much money.” The Kenyans, apparently, went back twice to ask the Chinese to finance phase 3 of the railway for $3.7 billion, and the Chinese balked at it, they said, “You guys have too much debt. We don’t think we’re going to get our money back.”
Insiders have told me that the conversation came down to whether or not the loan was going to be for a concessional loan or a market-based loan. The Chinese did not want to grant a concessional loan. Instead, they wanted to grant a market-based loan, which would force the cost up much higher. Back in 2019, I think it was, yes, 2019, President Uhuru Kenyatta, he went to China again to ask for this loan to be done on a concessional terms, and he came back empty-handed. So, now Ruto is trying a very different tack. He is not asking the China Exim Bank or the China Development Bank or any of the policy banks to finance this the way that Kenyatta was asking. Instead, what he wants to do is a public-private partnership, much the same way that the China Rodent Bridge Corporation built the 27-kilometer Nairobi Expressway.
That was it is a public-private partnership where the Chinese and CRBC run the road for, I think, it’s 20 years, they make their money back and then they hand it over. Gentlemen, this is going to be our closing thought here. This is the problem with railroads. There are very few in the world today that are profitable. I think Japan is profitable. Hong Kong subway is profitable, but pretty much most other railway systems around the world are not profitable. Now, that’s okay because railways are a foundational part of any economy, but if you are an investor in a particular railway, you want to make a profit from it. And we’ve talked about this, Geraud, in our show on critical minerals about all of the new transport supply routes that are coming up throughout Southern and eastern Africa in trucking, and also even in some railways as well, that there’s just not the density of people and the density of business and cargo to be transported to be able to generate the kinds of profits that the private sector demands.
So, with all of that, I’ve kind of laid it out for you, when you hear President Ruto vying for Chinese private investors or state-backed investors that are not the policy banks, what’s your take?
Geraud: I think President Ruto should design a much more comprehensive plan and approach to the situation. Because if you are a Chinese private investor, you look at where the railway is right now in Naivasha, you know that you have to extend it to Malaba, to the border with the Uganda. And from Uganda, connected to the Uganda SGR, you kind of wonder how much economic traction activities are on that path on that railway. So, when I heard President Ruto mentioning Uganda, DRC, and everything, I could see his plan, his strategy is like he’s trying to show the Chinese private investor how the railway is really profitable if you extend it to the whole East Africa, where you’re going to have access the whole market, he’s trying to incentivize them to come and invest. But also it should also do the same with those country, Uganda, DRC.
He said that he spoke with the head of state, but all of them should come with a plan and with a strategy, with a very comprehensive one that include infrastructure and economic activities and all to be able to show the Chinese private investor that investing in that railway is really profitable, not in the short term, but in the mid and the long term. But so far, him, presenting it himself only as an infrastructure project without integrating all the economic requirement and necessity for it to become really profitable, it’s not going to be enough to really incentivize the Chinese investor to come into that market right now because it’s really risky now.
Eric: Cobus, it’s a tough sell, according to Geraud. What’s your take?
Cobus: Yes, I completely agree. I think presenting it jointly with these other leaders would really make a big difference, showing, as Geraud was saying… Railways, of course, are a big upfront investment, and that hits the profitability as you mentioned. But in the long run, they energize all other parts of the economy. So, there’s different ways of working out their profitability. And those ways need to be shown, I think, particularly in relation to the kinds of markets that would be accessed, the kinds of exports that would happen from those countries, of course, the DRC being a key one already, a major exporter of things that the world wants. But showing A, that all of these countries really are on board and I think casting the net wider and maybe taking a note from Nigeria’s Lekki Port development to pull in both Chinese and non-Chinese private investors. That might start making things feel a bit more concrete.
Eric: The Port of Lekki is really a case study, and I hope they’re teaching that in lots of universities, how successful it was. So, that was French, Singaporean, Chinese, and the Lagosian Government. That I think you’re right. And again, these big ambitious projects I think are difficult. It’s like the Inga Dam in the Congo where it’s this huge massive mega thing. And I think pulling off big projects is very difficult today. So, if they went piece by piece, smaller initiatives, I think they might have a better chance to do that. Geraud, Cobus, let’s wrap up our discussion. We’ve covered a lot of ground. I apologize to everybody that the show is going a little bit long today, but I wanted to bring you these longer soundbites so you really got a sense to feel what these leaders were saying. And so we did go a little bit longer than usual today.
But help everybody pull all of this together. Okay? What did you hear today and what is one or two takeaways that you think listeners should walk away from this show feeling about? Geraud, you’ll get that and then Cobus, you’ll get the last word.
Geraud: For me, the few takeaways, it’ll be that China engagement in the global south is changing. We are going to see a different approach to China. We’re going to see China coming up with much more, I think much more assertive in its role it wants to play in the global south. And beyond the win-win rhetoric, China will always push for its own agenda. Our problem, our own real challenge is going to be able to how to capitalize China engagement in the global south, how we align ourself in this new direction that China is creating. Beyond aligning ourself, how we are able to put our own agenda on the table. Because so far, the BRI and everything that China is doing, it’s putting its own agenda first, but we need to see now a much more strong, and I’m going to speak from an African perspective, a much more strong African agenda on the table. Because when I was reading the BRI statement, I saw Africa was coming only once in the whole speech.
I was like, okay, it’s just maybe detailed. But for me, it’s like how much Africa is African Union or Africa head of state can pull together a common agenda or a strong agenda, FOCAC is coming, to put on the table of the BRI to say, “This is Africa agenda into the BRI, and this is how we want to move forward with that.” And we saw without that agenda, President Ruto will be fighting himself trying to find funding for regional infrastructure. President Tinubu is going to do the same without really gaining what we really have or can gain from China’s engagement in the global south. And I think we should now focus on that much more than just waiting on China’s agenda on the table.
Eric: Okay. Cobus, this is the final thought to you today.
Cobus: The week’s events, they’re very complicated, but one of the big takeaways for me was that as they happen, while we are also going through this full nightmare in the Middle East, it does show that the global north countries, their attention seems to be pulled back to some of their traditional preoccupations. In lots of ways, the U.S. seems to be thrown back to the 1980s. They’re fighting Russia and they’re dealing with Israel. And in that context, China is getting a little bit more breathing space, I think in parts of the global south where only a few weeks ago, global north attention was very sharp, particularly in the South China Sea. The standup with the Philippines was front-page news only two weeks ago. Now it’s quite obscure.
And in all of this, I think China’s getting this kind of moment where it can just kind of expand its connections with the global south without particularly being directly challenged by the global north. And that really seemed to be at play here. This kind of space where China somehow managed to get a space to present an entire expansive vision of what it’s international relations should be like, and not really particularly having that challenge by anyone. That was very interesting for me. And I think it shows that as China faces more and more constraints, particularly from the U.S., it is leaning into its relationships with the global south more.
And as Geraud said, the global south can get stuff from that. There’s leverage for them there. But it depends very much, and particularly for Africa, it depends very much on them being proactive and actually putting their own agendas into the conversation. I think those conversations around next year’s FOCAC Summit probably have already started. So, it’ll be very interesting to see whether Africa is able to put its agenda front and center more than they were before. They were already better at it at the last FOCAC, so it’ll be interesting to see if there’s progress in that respect.
Eric: And just to give you a sense of how quickly things change in the Chinese foreign policy space, think about this. Three weeks ago, the Chinese and Israeli governments had advanced teams in Beijing. Both were working together for a visit later this month by Israeli Prime Minister Benjamin Netanyahu. And today, relations between Israel and China are in free fall. Hard to imagine that three weeks ago, they were talking about, even maybe that the Chinese would help to broker a Saudi-Israel normalization deal. So, the world can change incredibly fast right now. And I think, to both of your points, that it’s just very humbling to see what’s happening around the world. And so, again, this calls for just a lot of attention to detail.
So, let’s leave our conversation there. Again, a very thorough deep dive into the Belt & Road Forum with a look on how it impacted Africa. If this is the kind of thing that you like, and if you’re with us an hour and 20 minutes into this podcast, you certainly are, we would love for you to join our community of readers online. And your support really is what makes it possible for us to do this work. We are a small, independent, nonprofit news organization that is dedicated to covering the stories the way we covered it throughout this entire show. And we always joke that we would be much richer and much more famous if we got into the food fight. And if Geraud was a pro-China, kind of like YouTuber telling everybody that he hates the West and loves everything that the CPC does, and everybody’s evil who criticizes China, he’d be super famous.
And the algorithms would reward him handsomely. And if Cobus, God forbid, Cobus is a pro-American, kind of like MAGA-leaning, Trump-loving, China-hating kind of YouTuber, he would be much more famous, and significantly wealthier from the algorithms as well. We don’t do that. We try and be just as down the middle and as balanced as we possibly can be. And it’s a lonely space a lot of times, I’ll tell you, but it does really need your support. And we’re so grateful to our supporters on YouTube, our supporters on Patreon, our subscribers, and I want to welcome also a lot of new students who have signed up for us. They get half off. We do have an academic rate.
Email me, eric@chinaafricaproject.com and I’ll send you the links. And if you would like to sign up, go to chinaglobalsouth.com/subscribe. You’ll get a month free to try it out, and hopefully, you’ll stay on after that. We do appreciate all of our readers. So let’s leave it there, Geraud, Cobus, and I will be back again next week with another episode of the China in Africa Podcast. And be sure to look out for us on YouTube for the CGSP Roundtable, where we’ll be there as well. For Cobus van Staden in Berlin, for Geraud in Mauritius, I’m Eric Olander — thank you so much for listening.
Outro: The discussion continues online. Tag us on Twitter @ChinaGSProject and visit us at chinaglobalsouth.com. If you speak French, check out our full coverage at projetafriquechine.com and AfrikChine on Twitter. That’s Afrik with a K. And you’ll also find links to our sites and social media channels in Arabic.
